Page Range | 26089-26459 | |
FR Document |
Page and Subject | |
---|---|
81 FR 26230 - Sunshine Act Meeting | |
81 FR 26095 - Workers Memorial Day, 2016 | |
81 FR 26093 - Loyalty Day, 2016 | |
81 FR 26178 - Nondiscrimination on the Basis of Disability in Air Travel: Negotiated Rulemaking Committee Membership and First Meeting | |
81 FR 26091 - Law Day, U.S.A., 2016 | |
81 FR 26089 - National Physical Fitness and Sports Month, 2016 | |
81 FR 26281 - Order of Suspension of Trading; In the Matter of Pineapple Express, Inc. | |
81 FR 26265 - Sunshine Act Meeting | |
81 FR 26308 - Environmental Impact Statement (EIS) for the Hudson Tunnel Project in Hudson County, New Jersey and New York County, New York | |
81 FR 26157 - Fisheries Off West Coast States; West Coast Salmon Fisheries; 2016 Management Measures and a Temporary Rule | |
81 FR 26203 - Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Advance Notification of Sunset Reviews | |
81 FR 26203 - Initiation of Antidumping and Countervailing Duty Administrative Reviews | |
81 FR 26206 - Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review | |
81 FR 26200 - Foreign-Trade Zone (FTZ) 22-Chicago, Illinois; Notification of Proposed Production Activity; Omron Automotive Electronics, Inc.; (Automotive Electronic Components); St. Charles, Illinois | |
81 FR 26200 - Foreign-Trade Zone (FTZ) 133-Quad-Cities, Iowa/Illinois; Notification of Proposed Production Activity, Deere & Company, Subzone 133D (Construction and Forestry Equipment), Davenport, Iowa | |
81 FR 26211 - Pacific Fishery Management Council; Public Meeting | |
81 FR 26231 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company | |
81 FR 26230 - Formations of, Acquisitions by, and Mergers of Bank Holding Companies | |
81 FR 26210 - Mid-Atlantic Fishery Management Council (MAFMC); Public Hearings | |
81 FR 26209 - Initiation of Five-Year (“Sunset”) Review | |
81 FR 26135 - Carfentrazone-ethyl; Pesticide Tolerances | |
81 FR 26236 - Compliance Policy Guide Sec. 690.150 Labeling and Marketing of Dog and Cat Food Diets Intended To Diagnose, Cure, Mitigate, Treat, or Prevent Diseases; Availability | |
81 FR 26235 - Agency Information Collection Activities: Proposed Collection; Comment Request | |
81 FR 26234 - Agency Information Collection Activities: Submission for OMB Review; Comment Request | |
81 FR 26147 - Abamectin; Pesticide Tolerances | |
81 FR 26224 - Certain New Chemicals; Receipt and Status Information for March 2016 | |
81 FR 26141 - Propanamide, 2-hydroxy-N, N-dimethyl- ; Exemption from the Requirement of a Tolerance | |
81 FR 26301 - Presidential Permits: Withdrawal of Request From Plains LPG Services, L.P. for Existing Pipeline Facilities on the Border of the United States and Canada Under the St. Clair River | |
81 FR 26180 - Approval and Promulgation of Implementation Plans; Texas; Revisions to the General Definitions for Texas New Source Review and the Minor NSR Qualified Facilities Program | |
81 FR 26301 - Overseas Security Advisory Council (OSAC) Meeting Notice: Closed Meeting | |
81 FR 26301 - Renewal of Cultural Property Advisory Committee Charter | |
81 FR 26188 - Approval and Promulgation of Air Quality Implementation Plans; Maryland; Reasonable Further Progress Plan, Contingency Measures, Motor Vehicle Emissions Budgets for the Baltimore 1997 8-Hour Ozone Serious Nonattainment Area | |
81 FR 26302 - Notice of Renewal of the Advisory Committee on International Law Charter | |
81 FR 26185 - Limited Disapproval of Air Plan Revisions; Arizona; New Source Review; PM2.5 | |
81 FR 26305 - Buy America Waiver Notification | |
81 FR 26214 - Agency Information Collection Activities; Submission for OMB Review; Comment Request-Standards for Full-Size Baby Cribs and Non-Full Size Baby Cribs; Compliance Form | |
81 FR 26213 - Agency Information Collection Activities; Submission for OMB Review; Comment Request-Safety Standard for Cigarette Lighters | |
81 FR 26243 - Intent To Request Renewal From OMB of One Current Public Collection of Information: Pipeline Corporate Security Review Program | |
81 FR 26198 - Notice of Request for Extension and Revision of a Currently Approved Information Collection | |
81 FR 26215 - Energy Conservation Program for Consumer Products: Decision and Order Granting a Waiver to Whirlpool From the Department of Energy Residential Clothes Washer Test Procedure | |
81 FR 26214 - President's Council of Advisors on Science and Technology | |
81 FR 26246 - Notice of Realty Action: Recreation and Public Purposes Act Classification (N-92525) for a Department of Motor Vehicles Facility, Clark County, NV | |
81 FR 26229 - Termination of Dormant Proceedings | |
81 FR 26238 - Solicitation of Nominations for Membership on the National Vaccine Advisory Committee | |
81 FR 26129 - Drawbridge Operation Regulation; Long Creek & Sloop Channel, Hempstead, NY | |
81 FR 26244 - Endangered and Threatened Species Permit Applications | |
81 FR 26312 - Reports, Forms and Record Keeping Requirements, Agency Information Collection Activity Under OMB Review | |
81 FR 26305 - Qualification of Drivers; Exemption Applications; Vision | |
81 FR 26237 - Agency Information Collection Activities; Proposed Collection; Public Comment Request | |
81 FR 26247 - Proposed Information Collection; Brown v. Board of Education National Historic Site Education Program Forms | |
81 FR 26211 - Availability of Seats for National Marine Sanctuary Advisory Councils | |
81 FR 26199 - Notice of Opportunity To Apply for Membership on the National Advisory Council on Innovation and Entrepreneurship (NACIE) | |
81 FR 26314 - Agency Information Collection Activity; Comment Request; Learner's Perceptions Survey (LPS) | |
81 FR 26313 - Community Development Advisory Board Meeting | |
81 FR 26304 - Notice and Request for Comments | |
81 FR 26303 - Notice and Request for Comments | |
81 FR 26302 - Notice and Request for Comments | |
81 FR 26262 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Requests To Approve Conformed Wage Classifications and Unconventional Fringe Benefit Plans Under the Davis-Bacon and Related Acts and Contract Work Hours and Safety Standards Act | |
81 FR 26263 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Worker Profiling and Reemployment Services Activities and Worker Profiling and Reemployment Outcomes | |
81 FR 26261 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; American Time Use Survey-Eating and Health Supplement | |
81 FR 26260 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Consumer Expenditure Surveys: Quarterly Interview and Diary | |
81 FR 26252 - Notice of Inventory Completion: Office of the State Archaeologist, University of Iowa, Iowa City, IA | |
81 FR 26249 - Notice of Inventory Completion: Office of the State Archaeologist, University of Iowa, Iowa City, IA | |
81 FR 26264 - Notice of Proposed Information Collection Request: Grants to States, State Program Report, Enhancements in Outcome-Based, Performance Measures and Evaluation | |
81 FR 26264 - Notice of Intent To Grant Partially Exclusive License | |
81 FR 26212 - Procurement List; Deletions | |
81 FR 26255 - Certain Windshield Wiper Devices and Components; Commission Final Determination of Violation of Section 337; Termination of Investigation; Issuance of Limited Exclusion Order | |
81 FR 26222 - Peak View Wind Energy LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
81 FR 26277 - Self-Regulatory Organizations; ISE Mercury, LLC; Notice of Filing of Proposed Rule Change Relating to Preferenced Volume | |
81 FR 26285 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change Relating to the Listing and Trading of the Shares of the PowerShares Variable Rate Investment Grade Portfolio, a Series of the PowerShares Actively Managed Exchange-Traded Fund Trust | |
81 FR 26281 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Granting Approval of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to the Listing and Trading of the Shares of the iSectors Post-MPT Growth ETF of ETFis Series Trust I | |
81 FR 26295 - Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Approving a Proposed Rule Change To Adopt and Amend Rules To Permit the Exchange To Initiate CHX SNAP Cycles | |
81 FR 26299 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule To Amend the Fees Schedule | |
81 FR 26272 - Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of a Proposed Rule Change To Remove From the DTCC Limit Monitoring Tool the 50% Early Warning Limit Alert and Make Technical Revisions to the Rules | |
81 FR 26269 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Amend NYSE Rule 98 To Provide That, When Designated Market Makers Enter Interest for the Purpose of Facilitating the Execution of Customer Orders, Those Orders Would Not Be Required To Be Designated as DMM Interest | |
81 FR 26296 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Update Public Disclosure of Exchange Usage of Market Data | |
81 FR 26275 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Require an Issuer of Securities Listed Under the Rule 5700 Series To Notify Nasdaq About the Replacement of the Index, Portfolio, or Reference Asset Underlying the Security and Pay a Fee in Connection With the Change | |
81 FR 26265 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To List and Trade Shares of the First Trust Municipal High Income ETF of First Trust Exchange-Traded Fund III | |
81 FR 26240 - National Institute on Alcohol Abuse and Alcoholism; Notice of Meeting | |
81 FR 26240 - National Cancer Institute; Notice of Closed Meetings | |
81 FR 26222 - Summit Hydropower, Inc.; Aspinook Hydro, LLC; Notice of Application for Transfer of License and Soliciting Comments, Motions To Intervene, and Protests | |
81 FR 26224 - Palmco Power RI LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
81 FR 26223 - Palmco Power VA LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
81 FR 26218 - Palmco Power NH LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
81 FR 26219 - Palmco Power ME, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
81 FR 26221 - Roswell Solar, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
81 FR 26219 - CNR Energy LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
81 FR 26241 - National Institute on Alcohol Abuse and Alcoholism Amended Notice of Meeting | |
81 FR 26242 - National Institute of Biomedical Imaging and Bioengineering; Notice of Closed Meeting | |
81 FR 26241 - National Center for Advancing Translational Sciences; Cancellation of Meetings | |
81 FR 26241 - Center for Scientific Review; Notice of Closed Meetings | |
81 FR 26241 - National Institute of General Medical Sciences; Notice of Closed Meeting | |
81 FR 26243 - National Institute of General Medical Sciences; Notice of Closed Meeting | |
81 FR 26113 - Airworthiness Directives; Airbus Airplanes | |
81 FR 26176 - Airworthiness Directives; Bombardier, Inc. Airplanes | |
81 FR 26259 - Notice of Lodging of Proposed Consent Decrees Under the Comprehensive Environmental Response, Compensation, and Liability Act | |
81 FR 26231 - Proposed Data Collection Submitted for Public Comment and Recommendations | |
81 FR 26130 - Technical Corrections-VA Vocational Rehabilitation and Employment Nomenclature Change for Position Title | |
81 FR 26274 - Proposed Collection; Comment Request | |
81 FR 26294 - Proposed Collection; Comment Request | |
81 FR 26279 - Terra Capital Partners, LLC, et al.; Notice of Application | |
81 FR 26298 - Proposed Collection; Comment Request | |
81 FR 26271 - Proposed Collection; Comment Request | |
81 FR 26231 - Formations of, Acquisitions by, and Mergers of Bank Holding Companies | |
81 FR 26219 - SunE B9 Holdings, LLC; Notice of Petition for Declaratory Order | |
81 FR 26223 - Kenai Hydro, LLC; Notice of Application Tendered for Filing With the Commission and Soliciting Additional Study Requests | |
81 FR 26220 - Eastern Shore Natural Gas Company; Notice of Availability of the Environmental Assessment for the Proposed White Oak Mainline Expansion Project and System Reliability Project | |
81 FR 26221 - Rugraw, LLC; Notice of Application Ready for Environmental Analysis and Soliciting Comments, Recommendations, Terms and Conditions, and Prescriptions | |
81 FR 26217 - Notice of Attendance at PJM Interconnection, L.L.C. Meetings | |
81 FR 26173 - Recruitment, Selection, and Placement (General) and Suitability | |
81 FR 26452 - Magnuson-Stevens Fishery Conservation and Management Act Provisions; Fisheries of the Northeastern United States; Northeast Groundfish Fishery; Fishing Year 2016; Recreational Management Measures | |
81 FR 26411 - Magnuson-Stevens Fishery Conservation and Management Act Provisions; Fisheries of the Northeastern United States; Northeast Groundfish Fishery; Framework Adjustment 55 | |
81 FR 26178 - Proposed Amendment of Class D Airspace and Revocation of Class E Airspace; Columbus, Ohio State University Airport, OH, and Amendment of Class E Airspace; Columbus, OH | |
81 FR 26127 - Civil Monetary Penalty Inflation Adjustment | |
81 FR 26256 - Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Russia; Institution of a Five-Year Review | |
81 FR 26099 - Airworthiness Directives; Dassault Aviation Airplanes | |
81 FR 26102 - Airworthiness Directives; Bombardier, Inc. Airplanes | |
81 FR 26315 - Determination of Royalty Rates and Terms for Ephemeral Recording and Webcasting Digital Performance of Sound Recordings (Web IV) | |
81 FR 26109 - Airworthiness Directives; The Boeing Company Airplanes | |
81 FR 26196 - Approval and Promulgation of Air Quality Implementation Plans; Maryland; State Board Requirements | |
81 FR 26133 - Approval and Promulgation of Air Quality Implementation Plans; Maryland; State Board Requirements | |
81 FR 26097 - Airworthiness Directives; Mitsubishi Heavy Industries, Ltd. Airplanes | |
81 FR 26106 - Airworthiness Directives; Piper Aircraft, Inc. Airplanes | |
81 FR 26103 - Airworthiness Directives; Airbus Helicopters (Previously Eurocopter France) | |
81 FR 26115 - Airworthiness Directives; Airbus Airplanes | |
81 FR 26124 - Airworthiness Directives; DG Flugzeugbau GmbH Gliders | |
81 FR 26121 - Airworthiness Directives; Bombardier, Inc. Airplanes | |
81 FR 26259 - Meeting of the CJIS Advisory Policy Board |
Agricultural Marketing Service
Economic Development Administration
Foreign-Trade Zones Board
International Trade Administration
National Oceanic and Atmospheric Administration
Energy Efficiency and Renewable Energy Office
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Food and Drug Administration
National Institutes of Health
Coast Guard
Transportation Security Administration
Fish and Wildlife Service
Land Management Bureau
National Park Service
Federal Bureau of Investigation
Copyright Royalty Board
Institute of Museum and Library Services
Federal Aviation Administration
Federal Highway Administration
Federal Motor Carrier Safety Administration
Federal Railroad Administration
National Highway Traffic Safety Administration
Community Development Financial Institutions Fund
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.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for certain Mitsubishi Heavy Industries, Ltd. Models MU-2B-30, MU-2B-35, MU-2B-36, MU-2B-36A, and MU-2B-60 airplanes. This AD results from mandatory continuing airworthiness information (MCAI) issued by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as reports of cracks found in the attach fittings of the main landing gear oleo strut. We are issuing this AD to require actions to address the unsafe condition on these products.
This AD is effective June 6, 2016.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in the AD as of June 6, 2016.
You may examine the AD docket on the Internet at
For service information identified in this AD, contact Mitsubishi Heavy Industries America, Inc., c/o Turbine Aircraft Services, Inc., 4550 Jimmy Doolittle Drive, Addison, Texas 75001; telephone: (972) 248-3108, ext. 209; fax: (972) 248-3321; Internet:
Andrew McAnaul, Aerospace Engineer, FAA, ASW-143 (c/o San Antonio MIDO), 10100 Reunion Place, Suite 650, San Antonio, Texas 78216; phone: (210) 308-3365; fax: (210) 308-3370; email:
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Mitsubishi Heavy Industries, Ltd. Models MU-2B-30, MU-2B-35, MU-2B-36, MU-2B-36A, and MU-2B-60 airplanes. The NPRM was published in the
The Japan Civil Aviation Bureau (JCAB), which is the aviation authority for Japan, has issued AD No. TCD-8595-2015, dated July 1, 2015 (referred to after this as “the MCAI”), to correct an unsafe condition for certain Mitsubishi Heavy Industries, Ltd. (MHI) Models MU-2B-30, MU-2B-35, and MU-2B-36 airplanes. You may examine the MCAI on the Internet at
We have received reports of seven failures of the main landing gear oleo strut attach fitting on certain MHI Models MU-2B-30, MU-2B-35, MU-2B-36, MU-2B-36A, and MU-2B-60 airplanes. Investigation revealed that the failures resulted from improper lubrication and/or hard landings, which caused cracks to develop in the main landing gear oleo strut attach fitting.
Japan is the State of Design for MHI Models MU-2B-30, MU-2B-35, and MU-2B-36 airplanes, which the MCAI AD applies to, and the United States is the State of Design for MHI Models MU-2B-36A and MU-2B-60 airplanes.
We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (81 FR 4217, January 26, 2016) or on the determination of the cost to the public.
We reviewed the relevant data and determined that air safety and the public interest require adopting the AD as proposed except for minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM (81 FR 4217, January 26, 2016) for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM (81 FR 4217, January 26, 2016).
We reviewed Mitsubishi Heavy Industries, Ltd. MU-2 Service Bulletin No. 243, dated June 30, 2015, and MU-2 Service Bulletin No. 105/32-017, dated September 29, 2015. The service information describes procedures for visually inspecting the lugs of the oleo attach fittings on both sides for cracks, and if any visible cracks are found, replacing with a new fitting. We also reviewed Mitsubishi Heavy Industries, Ltd. MU-2 Service News JCAB T.C.: No. 171, FAA T.C.: No. 124/32-011, dated April 27, 2012, and MU-2 Service News JCAB T.C.: No. 176, FAA T.C.: No. 128/32-013, dated July 18, 2013. This service information specifies doing repetitive ultrasound inspections of the main landing gear oleo upper attach fittings for cracks and ensuring proper lubrication of the main landing gear oleo fitting. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We have determined that the repetitive visual inspections specified in the MCAI are not adequate for detecting cracks in the main landing gear oleo strut attach fitting. Repetitive ultrasonic inspections of the main landing gear oleo strut attach fitting have been added into the maintenance requirement manual for these airplanes, which is not considered mandatory in the FAA's airworthiness regulatory system. Therefore, we are incorporating that requirement through the rulemaking process.
We estimate that this AD will affect 95 products of U.S. registry. We also estimate that it will take about 5 work-hours per product to comply with the visual inspection requirement of this AD. The average labor rate is $85 per work-hour.
Based on these figures, we estimate the cost of the visual inspection requirements of this AD on U.S. operators to be $40,375, or $425 per product.
We also estimate that it will take about 3 work-hours per product to comply with the ultrasound inspection requirements of this AD. The average labor rate is $85 per work-hour.
Based on these figures, we estimate the cost of the ultrasound inspection requirements of this AD on U.S. operators to be $24,225, or $255 per product.
Owner/operators have the option to do an ultrasound inspection in lieu of the required visual inspection.
In addition, we estimate that any necessary follow-on actions will take about 24 work-hours and require parts costing $5,220, for a cost of $7,260 per product to replace the left-hand main landing gear oleo strut. We have no way of determining the number of products that may need this action.
In addition, we also estimate that any necessary follow-on actions will take about 45 work-hours and require parts costing $5,220, for a cost of $9,045 per product to replace the right-hand main landing gear oleo strut. We have no way of determining the number of products that may need this action.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
You may examine the AD docket on the Internet at
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) becomes effective June 6, 2016.
None.
This AD applies to Mitsubishi Heavy Industries, Ltd. Models MU-2B-30, MU-2B-35, and MU-2B-36 airplanes, serial numbers 502 through 696, except 652 and 661, and Models MU-2B-36A and MU-2B-60 airplanes, serial numbers 661SA, and 697SA through 1569SA, certificated in any category.
Air Transport Association of America (ATA) Code 32: Landing Gear.
This AD was prompted by mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as reports of cracks found in the upper attach fittings of the main landing gear oleo strut. We are issuing this AD to prevent failure of the main landing gear oleo strut attach fitting, which could cause the landing gear to fail and result in loss of control.
Unless already done, do the following actions:
(1) Within the next 100 hours time-in-service (TIS) after June 6, 2016 (the effective date of this AD) or within the next 6 months after June 6, 2016 (the effective date of this AD), whichever occurs first, do a visual inspection of the main landing gear oleo upper attach fittings for cracks. Do the inspection following the INSTRUCTIONS section in Mitsubishi Heavy Industries, Ltd. MU-2 Service Bulletin No. 243, dated June 30, 2015, and the INSTRUCTIONS section in Mitsubishi Heavy Industries, Ltd. MU-2 Service Bulletin No. 105/32-017, dated September 29, 2015, as applicable.
(2) Before further flight after the inspection required in paragraph (f)(1) of this AD, if no signs of cracks are found, lubricate the pin assembly attached to the main landing gear oleo attach fitting as specified in Mitsubishi Heavy Industries, Ltd. MU-2 Service News JCAB T.C.: No. 171, FAA T.C.: No. 124/32-011, dated April 27, 2012.
(3) Within the next 100 hours TIS after doing the initial visual inspection required in
(4) Before further flight after any inspection required in paragraph (f)(3) of this AD, if no signs of cracks are found, lubricate the pin assembly attached to the main landing gear oleo attach fitting as specified in Mitsubishi Heavy Industries, Ltd. MU-2 Service News JCAB T.C.: No. 171, FAA T.C.: No. 124/32-011, dated April 27, 2012, and Mitsubishi Heavy Industries, Ltd. MU-2 Service News JCAB T.C.: No. 176, FAA T.C.: No. 128/32-013, dated July 18, 2013.
(5) Before further flight after any inspection required in paragraph (f)(1) and (f)(3) of this AD where cracks are found, replace the main landing gear oleo upper attach fittings following the INSTRUCTIONS section in Mitsubishi Heavy Industries, Ltd. MU-2 Service Bulletin No. 243, dated June 30, 2015, and the INSTRUCTIONS sections in Mitsubishi Heavy Industries, Ltd. MU-2 Service Bulletin No. 105/32-017, dated September 29, 2015, as applicable. After replacement, continue with the repetitive ultrasound inspection requirements of paragraph (f)(3) and lubrication requirements of paragraph (f)(4) of this AD.
The following provisions also apply to this AD:
(1)
(2)
Refer to MCAI Japan Civil Aviation Bureau (JCAB) AD No. TCD-8585-2015, dated July 1, 2015, for related information. You may examine the MCAI on the Internet at
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Mitsubishi Heavy Industries, Ltd. MU-2 Service Bulletin No. 105/32-017, dated September 29, 2015.
(ii) Mitsubishi Heavy Industries, Ltd. MU-2 Service Bulletin No. 243, dated June 30, 2015.
(iii) Mitsubishi Heavy Industries, Ltd. MU-2 Service News JCAB T.C.: No. 176, FAA T.C.: No. 128/32-013, dated July 18, 2013.
(iv) Mitsubishi Heavy Industries, Ltd. MU-2 Service News JCAB T.C.: No. 171, FAA T.C.: No. 124/32-011, dated April 27, 2012.
(3) For Mitsubishi Heavy Industries, Ltd service information identified in this AD, contact Mitsubishi Heavy Industries America, Inc., c/o Turbine Aircraft Services, Inc., 4550 Jimmy Doolittle Drive, Addison, Texas 75001; telephone: (972) 248-3108, ext. 209; fax: (972) 248-3321; Internet:
(4) You may view this service information at the FAA, Small Airplane Directorate, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148. In addition, you can access this service information on the Internet at
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for certain Dassault Aviation Model FALCON 2000, FALCON 2000EX, MYSTERE-FALCON 900, and FALCON 900EX airplanes. This AD was prompted by reports of a co-pilot sliding aft on his seat during take-off at rotation. This AD requires replacement of certain springs installed on the pilot and co-pilot seats. We are issuing this AD to prevent fatigue wear, which, if not corrected, could cause the seat to slide and the pilot or co-pilot to lose contact with the controls, leading to an inadvertent input on the flight control commands during take-off or climb, possibly resulting in loss of control of the airplane.
This AD becomes effective June 6, 2016.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of June 6, 2016.
For service information identified in this final rule, contact Dassault Falcon Jet Corporation, Teterboro Airport, P.O. Box 2000, South Hackensack, NJ 07606; telephone 201-440-6700; Internet
You may examine the AD docket on the Internet at
Tom Rodriguez, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1137; fax 425-227-1149.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Dassault Aviation Model FALCON 2000, FALCON 2000EX, MYSTERE-FALCON 900, and FALCON 900EX airplanes. The NPRM published in the
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2014-0061, dated March 11, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Dassault Aviation Model FALCON 2000, FALCON 2000EX, MYSTERE-FALCON 900, and FALCON 900EX airplanes. The MCAI states:
During take-off at rotation, a co-pilot reported to slide aft on his seat.
The results of the investigations concluded that one spring of the seat locking system was broken and the other was weak. The root cause was determined to be fatigue wear. As springs accumulate cycles in service, they become increasingly exposed to the risk of unnoticed degradation or rupture.
This condition, if not corrected, could cause the pilot or the co-pilot to lose contact with the controls, leading to an inadvertent input on the flight control commands during take-off or climb, possibly resulting in loss of control of the aeroplane.
To address this unsafe condition, it was decided to require replacement of the affected seat springs for older aeroplanes and for newer aeroplanes; this task has been embodied in the aeroplane maintenance manual.
For the reasons described above, this [EASA] AD requires replacement of the springs installed on the pilot and co-pilot seats with serviceable springs.
You may examine the MCAI in the AD docket on the Internet at
We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM and the FAA's response to each comment.
Travis Reinhardt requested that if paragraph (g) of the proposed AD is revised to include other airplanes that we consider different replacement times. The commenter stated that the NPRM is applicable to certain Dassault Aviation airplanes equipped with SICMA 132-series or 142-series pilot and co-pilot seats. The commenter noted he has Embraer 120 airplanes equipped with SICMA 147-series seats, which include part number (P/N) 132100-19 and/or 147100-19 stop pin springs. The commenter stated the Embraer 120 heavy checks are due at 4,000 flight hours versus the stated 3,750 total flight cycles or 74 months for the listed Falcon airplanes. The commenter stated that he has only changed out one spring, approximately twelve years ago, and that currently, his installed springs, P/N 132100-19, have approximately 34,000 flight hours and 34,600 flight cycles.
While we appreciate the information Mr. Reinhardt has given, we are not revising this final rule to include other airplane models (or different replacement times) because the identified unsafe condition only affects the Dassault Aviation airplanes identified in the Applicability paragraph of this AD that are equipped with SICMA 132-series or 142-series pilot and co-pilot seats. However, if we determine that an unsafe condition exists on other airplane models, we might consider further rulemaking on this issue. We have made no changes to this final rule in this regard.
Mr. Reinhardt requested that if the NPRM is revised, we consider adding P/N 132100-19 to paragraph (h) of the proposed AD, as stated in EASA AD 2014-0061, dated March 11, 2014.
For the reasons stated by the commenter, we agree to add P/N 132100-19 to paragraph (h) of this AD.
We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
Dassault Aviation has issued the following service information:
• Dassault Service Bulletin F900-429, Revision 1, dated July 13, 2012.
• Dassault Service Bulletin F900EX-446, Revision 1, dated July 13, 2012.
• Dassault Service Bulletin F2000-401, Revision 1, dated July 13, 2012.
• Dassault Service Bulletin F2000EX-267, Revision 1, dated July 13, 2012.
The service information describes procedures for replacing certain springs installed on the pilot and co-pilot seats. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD affects 528 airplanes of U.S. registry.
We also estimate that it will take about 2 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Required parts will cost about $83 per product. Based on these figures, we estimate the cost of this AD on U.S. operators to be $133,584, or $253 per product.
According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD becomes effective June 6, 2016.
None.
This AD applies to the airplanes identified in paragraphs (c)(1), (c)(2), (c)(3), and (c)(4) of this AD, certificated in any category, equipped with SICMA 132-series or 142-series pilot and co-pilot seats.
(1) Dassault Aviation Model FALCON 2000 airplanes.
(2) Dassault Aviation Model FALCON 2000EX airplanes.
(3) Dassault Aviation Model MYSTERE-FALCON 900 airplanes.
(4) Dassault Aviation Model FALCON 900EX airplanes.
Air Transport Association (ATA) of America Code 25, Equipment/Furnishings.
This AD was prompted by reports of a co-pilot sliding aft on his seat during take-off at rotation. We are issuing this AD to prevent fatigue wear, which, if not corrected, could cause the seat to slide and the pilot or co-pilot to lose contact with the controls, leading to an inadvertent input on the flight control commands during take-off or climb, possibly resulting in loss of control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
For airplanes that have accumulated more than 3,750 total flight cycles or have exceeded 74 months since the airplane's first flight as of the effective date of this AD: Within 9 months after the effective date of this AD, replace each spring having part number (P/N) 132100-19 and P/N 147100-19 installed on the pilot and co-pilot seats with a spring as specified in, and in accordance with, the Accomplishment Instructions of the service information identified in paragraph (g)(1), (g)(2), (g)(3), or (g)(4) of this AD, as applicable. Repeat the replacement thereafter at intervals not to exceed 78 months or 3,750 flight cycles, whichever occurs first.
(1) Dassault Service Bulletin F900-429, Revision 1, dated July 13, 2012.
(2) Dassault Service Bulletin F900EX-446, Revision 1, dated July 13, 2012.
(3) Dassault Service Bulletin F2000-401, Revision 1, dated July 13, 2012.
(4) Dassault Service Bulletin F2000EX-267, Revision 1, dated July 13, 2012.
As of the effective date of this AD, installation of a spring having P/N 147100-19 or P/N 132100-19 on any airplane is allowed, provided that the spring is new.
The following provisions also apply to this AD:
(1)
(2)
Refer to Mandatory Continuing Airworthiness Information (MCAI) European Aviation Safety Agency Airworthiness Directive 2014-0061, dated March 11, 2014, for related information. This MCAI may be found in the AD docket on the Internet at
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) Dassault Service Bulletin F900-429, Revision 1, dated July 13, 2012.
(ii) Dassault Service Bulletin F900EX-446, Revision 1, dated July 13, 2012.
(iii) Dassault Service Bulletin F2000-401, Revision 1, dated July 13, 2012.
(iv) Dassault Service Bulletin F2000EX-267, Revision 1, dated July 13, 2012.
(3) For service information identified in this AD, contact Dassault Falcon Jet Corporation, Teterboro Airport, P.O. Box 2000, South Hackensack, NJ 07606; telephone 201-440-6700; Internet
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), DOT.
Final rule.
We are adopting a new airworthiness directive (AD) for certain Bombardier, Inc. Model CL-600-2B19 (Regional Jet Series 100 & 440) airplanes. This AD was prompted by the discovery of a number of incorrectly calibrated angle of attack (AOA) transducers installed in the stall protection system. This AD requires replacement of incorrectly calibrated AOA transducers. We are issuing this AD to detect and replace incorrectly calibrated AOA transducers; incorrect calibration of the transducers could result in late activation of the stick pusher.
This AD is effective June 6, 2016.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of June 6, 2016.
For service information identified in this final rule, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-5000; fax 514-855-7401; email
You may examine the AD docket on the Internet at
Cesar Gomez, Aerospace Engineer, Airframe and Mechanical Systems Branch, ANE-171, FAA, New York Aircraft Certification Office (ACO), 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7318; fax 516-794-5531.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc. Model CL-600-2B19 (Regional Jet Series 100&440) airplanes. The NPRM published in the
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian AD CF-2015-17, effective July 16, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc. Model CL-600-2B19 (Regional Jet Series 100 & 440) airplanes. The MCAI states:
It was discovered that a number of [angle of attack] AOA transducers installed on Bombardier CL-600-2B19 aeroplanes were incorrectly calibrated due to a quality control problem at both the production and repair facilities. Incorrect calibration of the AOA transducer could result in a late activation of the stick pusher.
This [Canadian] AD mandates the replacement of the incorrectly calibrated AOA transducer.
You may examine the MCAI in the AD docket on the Internet at
We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.
We reviewed the relevant data and determined that air safety and the public interest require adopting this AD as proposed, except for minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
We reviewed Bombardier Service Bulletin 601R-27-164, dated March 30, 2015. The service information describes procedures for replacement of incorrectly calibrated AOA transducers. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD affects 575 airplanes of U.S. registry.
We also estimate that it would take about 4 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Required parts would cost about $10,000 per product. Based on these figures, we estimate the cost of this AD on U.S. operators to be $5,945,500, or $10,340 per product.
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
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective June 6, 2016.
None.
This AD applies to Bombardier, Inc. Model CL-600-2B19 (Regional Jet Series 100 & 440) airplanes, certificated in any category, serial numbers 7003 through 7067 inclusive, 7069 through 7990 inclusive, and 8000 through 8999 inclusive.
Air Transport Association (ATA) of America Code 27, Flight Controls.
This AD was prompted by the discovery of a number of incorrectly calibrated angle of attack (AOA) transducers installed in the stall protection system. We are issuing this AD to detect and replace incorrectly calibrated AOA transducers; incorrect calibration of the transducers could result in late activation of the stick pusher.
Comply with this AD within the compliance times specified, unless already done.
For AOA transducers identified in paragraph 1.A., “Effectivity,” of Bombardier Service Bulletin 601R-27-164, dated March 30, 2015: Within 2,500 flight hours or 12 months, whichever occurs first after the effective date of this AD, replace the AOA transducers with correctly calibrated AOA transducers, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 601R-27-164, dated March 30, 2015.
As of the effective date of this AD, no person may install, on any airplane, an AOA transducer having a part number or serial number listed in paragraph 1.A., “Effectivity,” of Bombardier Service Bulletin 601R-27-164, dated March 30, 2015.
The following provisions also apply to this AD:
(1) Alternative Methods of Compliance (AMOCs): The Manager, New York Aircraft Certification Office (ACO), ANE-170, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the ACO, send it to ATTN: Program Manager, Continuing Operational Safety, FAA, New York ACO, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7300; fax 516-794-5531. Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office. The AMOC approval letter must specifically reference this AD.
(2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, New York ACO, ANE-170, FAA; or Transport Canada Civil Aviation (TCCA); or Bombardier, Inc.'s TCCA Design Approval Organization (DAO). If approved by the DAO, the approval must include the DAO-authorized signature.
For more information about this AD, contact Cesar Gomez, Aerospace Engineer, Airframe and Mechanical Systems Branch, ANE-171, FAA, New York ACO, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7318; fax 516-794-5531.
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Bombardier Service Bulletin 601R-27-164, dated March 30, 2015.
(ii) Reserved.
(3) For service information identified in this AD, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-5000; fax 514-855-7401; email
(4) You may view this service information at FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), DOT.
Final rule.
We are superseding airworthiness directive (AD) 2014-12-51 for Airbus Helicopters (previously Eurocopter France) Model EC130B4 and
This AD is effective June 6, 2016.
The Director of the Federal Register approved the incorporation by reference of a certain document listed in this AD as of June 6, 2016.
For service information identified in this final rule, contact Airbus Helicopters, Inc., 2701 N. Forum Drive, Grand Prairie, TX 75052; telephone (972) 641-0000 or (800) 232-0323; fax (972) 641-3775; or at
You may examine the AD docket on the Internet at
Robert Grant, Aviation Safety Engineer, Safety Management Group, FAA, Rotorcraft Directorate, FAA, 10101 Hillwood Pkwy, Fort Worth, TX 76177; email
On September 25, 2015, at 80 FR 57742, the
The NPRM was prompted by AD No. 2015-0033-E dated February 24, 2015 (AD 2015-0033-E), issued by EASA, which is the Technical Agent for the Member States of the European Union, to correct an unsafe condition on Airbus Helicopters EC130B4 and EC130T2 helicopters. The NPRM proposed to require retaining the dye penetrant and borescope inspections in AD 2014-12-51 but with revised compliance times. The NRPM also proposed to change the applicability to helicopters with 690 hours TIS accumulated on the junction frame instead of on the helicopter, and proposed including an inspection interval defined in sling cycles. These actions were intended to detect a crack and to prevent failure of the junction frame, which could result in loss of the Fenestron and subsequent loss of control of the helicopter.
After our NPRM (80 FR 57742, September 25, 2015) was published, we received a comment from one commenter.
One commenter requested the addition of a 10-hour or 250-sling cycle visual pilot check for helicopters with Modification 350A087421 or that have complied with Airbus Helicopters Service Bulletin No. EC130-53-029, Revision 0, dated February 20, 2015 (SB EC130-53-029). The commenter stated this pilot check would benefit operators and provide the same level of safety.
We disagree. While the EASA AD allows the check requested by the commenter as an alternative method, because the cause of the fatigue cracking is still under investigation, we cannot determine that this method would correct the unsafe condition.
These helicopters have been approved by the aviation authority of France and are approved for operation in the United States. Pursuant to our bilateral agreement with France, EASA, its technical representative, has notified us of the unsafe condition described in the EASA AD. We are issuing this AD because we evaluated all information provided by EASA, reviewed the relevant information, considered the comment received, and determined the unsafe condition exists and is likely to exist or develop on other helicopters of the same type designs and that air safety and the public interest require adopting the AD requirements as proposed.
We consider this AD to be an interim action. If final action is later identified, we might consider further rulemaking then.
The EASA AD includes alternate compliance instructions for helicopters modified with a cut-out in production by Airbus Helicopters Modification 350A087421 or in service by compliance with SB EC130-53-029. This AD does not.
We reviewed Airbus Helicopters Emergency Alert Service Bulletin No. 05A017, Revision 2, dated February 20, 2015 (EASB 05A017), for Model EC130B4 and EC130T2 helicopters. EASB 05A017 describes alternate procedures for inspecting outside the tailboom for a crack at reduced inspection intervals in combination with the internal inspections at extended intervals. EASB 05A017 also specifies adding sling cycles to the existing flight hour inspection interval for helicopters that perform external load-carrying operations. EASA issued AD No. 2015-0033-E mandating the requirements in EASB 05A017 to ensure the continued airworthiness of these helicopters.
This service information is reasonably available because the interested parties have access to it through their normal
Airbus Helicopters also issued SB EC130-53-029, which contains procedures to cut out the skin and splice at the junction frame to facilitate the external inspection specified in EASB 05A017.
We estimate that this AD affects 208 helicopters of U.S. Registry. We estimate that operators may incur the following costs in order to comply with this AD. At an average labor rate of $85 per work-hour, dye-penetrant inspecting the junction frame will require 1 work-hour, for a cost of $85 per helicopter and a total cost of $17,680 for the U.S. fleet, per inspection cycle. Borescope inspecting the junction frame will require 0.5 work-hour, for a cost of $43 per helicopter and a total cost of $8,944 for the U.S. fleet, per inspection cycle.
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 helicopters identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866;
(2) Is not a “significant rule” under 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 AD and placed it in the AD docket.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD applies to Airbus Helicopters Model EC130B4 and EC130T2 helicopters with a tailboom to fenestron junction frame (junction frame) that has 690 or more hours time-in-service (TIS), certificated in any category.
This AD defines the unsafe condition as a crack in the junction frame. This condition could result in failure of the junction frame, which could result in loss of the Fenestron and subsequent loss of control of the helicopter.
This AD supersedes AD 2014-12-51, Amendment 39-17921 (79 FR 45335, August 5, 2014).
This AD becomes effective June 6, 2016.
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.
(1) Before the junction frame reaches 700 hours TIS or within 10 hours TIS, whichever occurs later, remove the horizontal stabilizer, clean the junction frame, and dye-penetrant inspect around the circumference of the junction frame for a crack in the areas shown in Figure 1 of Airbus Helicopters EC130 Emergency Alert Service Bulletin No. 05A017, Revision 2, dated February 20, 2015 (EASB 05A017). Pay particular attention to the area around the 4 spars (item b) of Figure 1 of EASB 05A017. An example of a crack is shown in Figure 3 of EASB 05A017.
(2) Within 25 hours TIS or 390 sling cycles, whichever occurs first after the inspection required by paragraph (f)(1) of this AD, and thereafter at intervals not exceeding 25 hours TIS or 390 sling cycles, whichever occurs first, either perform the actions of paragraph (f)(1) of this AD or, if the area is clean, using a borescope, inspect around the circumference of the junction frame for a crack in the areas shown in Figure 2 of EASB 05A017. Pay particular attention to the area around the 4 spars (item b) of Figure 2 of EASB 05A017. An example of a crack is shown in Figure 3 of EASB 05A017. For purposes of this AD, a sling cycle is defined as one landing with or without stopping the rotor or one external load-carrying operation; an external load-carrying operation occurs each time a helicopter picks up an external load and drops it off.
(3) If there is a crack, before further flight, replace the junction frame.
Special flight permits are prohibited.
(1) The Manager, Safety Management Group, FAA, may approve AMOCs for this AD. Send your proposal to: Robert Grant, Aviation Safety Engineer, Safety Management Group, Rotorcraft Directorate, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-5110; email
(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.
(1) Airbus Helicopters Service Bulletin No. EC130-53-029, Revision 0, dated February 20, 2015, which is not incorporated by reference, contains additional information about the subject of this final rule. For service information identified in this final rule, contact Airbus Helicopters, Inc., 2701 N. Forum Drive, Grand Prairie, TX 75052; telephone (972) 641-0000 or (800) 232-0323; fax (972) 641-3775; or at
(2) The subject of this AD is addressed in European Aviation Safety Agency (EASA) AD No. 2015-0033-E, dated February 24, 2015. You may view the EASA AD on the Internet at
Joint Aircraft Service Component (JASC) Code: 5302: Rotorcraft Tailboom.
(1) The Director of the Federal Register approved the incorporation by reference of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Airbus Helicopters Emergency Alert Service Bulletin No. 05A017, Revision 2, dated February 20, 2015.
(ii) Reserved.
(3) For Airbus Helicopters service information identified in this final rule, contact Airbus Helicopters, Inc., 2701 N. Forum Drive, Grand Prairie, TX 75052; telephone (972) 641-0000 or (800) 232-0323; fax (972) 641-3775; or at
(4) You may view this service information at FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood Pkwy., Room 6N-321, Fort Worth, TX 76177. For information on the availability of this material at the FAA, call (817) 222-5110.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call (202) 741-6030, or go to:
Federal Aviation Administration (FAA), DOT.
Final rule.
We are adopting a new airworthiness directive (AD) for certain Piper Aircraft, Inc. Model PA-31-350 airplanes. This AD was prompted by a report of an engine fire caused by a leak in the fuel pump inlet hose. This AD requires inspecting the fuel hose assembly and the turbocharger support assembly for proper clearance between them, inspecting each assembly for any sign of damage, and making any necessary repairs or replacements. We are issuing this AD to correct the unsafe condition on these products.
This AD is effective June 6, 2016.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of June 6, 2016.
For service information identified in this final rule, contact Piper Aircraft, Inc., 2926 Piper Drive, Vero Beach, Florida 32960; telephone: (772) 567-4361; fax: (772) 978-6573; Internet:
You may examine the AD docket on the Internet at
Gary Wechsler, Aerospace Engineer, FAA, Atlanta Aircraft Certification Office, 1701 Columbia Avenue, College Park, Georgia 30337; telephone: (404) 474-5575; fax: (404) 474-5606; email:
We issued a supplemental notice of proposed rulemaking (SNPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Piper Aircraft, Inc. Model PA-31-350 airplanes. The SNPRM published in the
This condition, if not corrected, could result in damage to the fuel inlet hose assembly, which could cause the fuel pump inlet hose to fail and leak fuel in the engine compartment. This condition could also cause damage to the turbocharger support assembly, which could require the turbocharger support assembly to be repaired or replaced.
We gave the public the opportunity to participate in developing this AD. We received no comments on the SNPRM (81 FR 4214, January 26, 2016) or on the determination of the cost to the public.
We reviewed the relevant data and determined that air safety and the public interest require adopting this AD as proposed except for minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the SNPRM (81 FR 4214, January 26, 2016) for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the SNPRM (81 FR 4214, January 26, 2016).
We reviewed Piper Aircraft, Inc. Service Bulletin No. 1257A, dated August 4, 2015. The service information describes procedures for the following. This service information is reasonably
There are differences between the compliance times for the corrective actions in this AD and those in the related service information.
We based the compliance times in this AD on risk analysis and cost impact to operators. There has only been one event of the reported incident in the operational history of Piper Model PA-31-350 airplanes. Cost was also a strong consideration due to the age of the fleet and the number of airplanes still in service.
The one-time inspection required in this AD is very inexpensive and requires minimal time to accomplish. It is expected that almost all airplanes in service can be cleared with a single inspection, and no additional actions or costs would be incurred by the vast majority of the fleet.
We determined that a single inspection with any necessary corrective actions is an adequate terminating action for the unsafe condition. The risk related to future maintenance on the fuel line would be mitigated by the related service information and awareness from this AD.
We estimate that this AD affects 773 airplanes of U.S. registry.
We estimate the following costs to comply with this AD:
We estimate the following costs to do any necessary follow-on actions that will be required based on the results of the inspection. We have no way of determining the number of airplanes that might need these corrective actions.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective June 6, 2016.
None.
This AD applies to Piper Aircraft, Inc. Model PA-31-350 airplanes, serial numbers 31-5001 through 31-5004, 31-7305005 through 31-8452024, and 31-8253001 through 31-8553002, certificated in any category, that are equipped with the following engines and fuel pump hose assemblies:
Joint Aircraft System Component (JASC)/Air Transport Association (ATA) of America Code 73: Engine Fuel and Control.
This AD was prompted by a report of an engine fire caused by a leak in the fuel pump inlet hose. We are issuing this AD to correct the unsafe condition on these products.
Comply with this AD within the compliance times specified in paragraphs (g)(1) through (j)(2) of this AD, unless already done.
(1) Within the next 60 hours time-in-service (TIS) after June 6, 2016 (the effective date of this AD) or within the next 6 months after June 6, 2016 (the effective date of this AD), whichever occurs first, inspect to determine the clearance between the inlet and exit fuel hose assemblies listed in table 1 to paragraph (c) of this AD, and each turbocharger support assembly, Lycoming P/N LW-18302. There should be a minimum
(2) Before further flight after the inspection required in paragraph (g)(1) of this AD, if the measured clearance is less than
(1) Within the next 60 hours TIS after June 6, 2016 (the effective date of this AD) or within the next 6 months after June 6, 2016 (the effective date of this AD), whichever occurs first, visually inspect the inlet and exit fuel hose assemblies listed in table 1 to paragraph (c) of this AD for evidence of leaking, cracking, chafing, and any other sign of damage. Do the inspection following the INSTRUCTIONS section of Piper Aircraft, Inc. Service Bulletin No. 1257A, dated August 4, 2015.
(2) Before further flight after the inspection required in paragraph (h)(1) of this AD, if any evidence of leaking, cracking, chafing, or any other sign of damage is found in any inlet or exit fuel host assembly listed in table 1 to paragraph (c) of this AD, replace the fuel hose assembly with a serviceable part. Do the replacement following the INSTRUCTIONS section of Piper Aircraft, Inc. Service Bulletin No. 1257A, dated August 4, 2015.
(1) Within the next 60 hours TIS after June 6, 2016 (the effective date of this AD) or within the next 6 months after June 6, 2016 (the effective date of this AD), whichever occurs first, visually inspect each turbocharger support assembly, Lycoming P/N LW-18302, for evidence of chafing and any other signs of damage. Do the inspection following the INSTRUCTIONS section of Piper Aircraft, Inc. Service Bulletin No. 1257A, dated August 4, 2015.
(2) Before further flight after the inspection required in paragraph (i)(1) of this AD, if any evidence of chafing or any other sign of damage is found on any turbocharger support assembly, replace Lycoming P/N LW-18302 with a serviceable part. Do the replacement following the INSTRUCTIONS section of Piper Aircraft, Inc. Service Bulletin No. 1257A, dated August 4, 2015.
(1) If any fuel line component was adjusted or replaced during any actions required in paragraphs (g)(1) through (i)(2) of this AD, before further flight, perform an engine run-up on the ground to check for leaks. Do the engine run-up following the INSTRUCTIONS section of Piper Aircraft, Inc. Service Bulletin No. 1257A, dated August 4, 2015.
(2) If any leaks found during the engine run-up required in paragraph (j)(1) of this AD emanate from any fuel line component adjusted, repaired, or replaced during any actions required in paragraphs (g)(1) through (i)(2) of this AD, before further flight, take all necessary corrective actions following the INSTRUCTIONS section of Piper Aircraft, Inc. Service Bulletin No. 1257A, dated August 4, 2015.
(1) The Manager, Atlanta Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in the Related Information section of this AD.
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
For more information about this AD, contact Gary Wechsler, Aerospace Engineer, FAA, Atlanta ACO, 1701 Columbia Avenue, College Park, Georgia 30337; telephone: (404) 474-5575; fax: (404) 474-5606; email:
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Piper Aircraft, Inc. Service Bulletin No. 1257A, dated August 4, 2015.
(ii) Reserved.
(3) For Piper Aircraft, Inc. service information identified in this AD, contact Piper Aircraft, Inc., 926 Piper Drive, Vero Beach, Florida 32960; telephone: (772) 567-4361; fax: (772) 978-6573; Internet:
(4) You may view this service information at FAA, Small Airplane Directorate, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), DOT.
Final rule.
We are adopting a new airworthiness directive (AD) for certain The Boeing Company Model 777-200 and -300 series airplanes. This AD was prompted by reports of fatigue cracking of a certain chord of the pivot bulkhead. This AD requires repetitive inspections for cracking of the left side and right side forward outer chords of the pivot bulkhead, and related investigative and corrective actions if necessary. This AD also provides a modification of the pivot bulkhead, which would terminate the repetitive inspections. We are issuing this AD to detect and correct fatigue cracking of the outer flanges of the left and right side forward outer chords of the pivot bulkhead, which could result in a severed forward outer chord and consequent loss of horizontal stabilizer control.
This AD is effective June 6, 2016.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of June 6, 2016.
For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207;
You may examine the AD docket on the Internet at
Narinder Luthra, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057-3356;
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 777-200 and -300 series airplanes. The NPRM published in the
We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM and the FAA's response to each comment.
American Airlines (AA) requested that we revise the NPRM to exclude doing the work in accordance with paragraph 3.B.4., of the Work Instructions of Boeing Alert Service Bulletin 777-53A0075, dated January 14, 2015, which specifies “Put the airplane back into a serviceable condition.” AA stated that doing this action does not affect the condition that the AD seeks to address. AA added that most operators will accomplish these modifications as part of a maintenance visit, and returning the airplane to a serviceable condition will not be possible in the context of the statement, but rather will occur at a point in time well after the work is completed.
We agree that putting the airplane back into a serviceable condition is not directly related to addressing the unsafe condition identified in this AD. However, we do not agree to specifically exclude paragraph 3.B.4., of the Work Instructions of Boeing Alert Service Bulletin 777-53A0075, dated January 14, 2015, from this final rule because it is not required for compliance with the AD actions.
The FAA worked in conjunction with industry, under the Airworthiness Directives Implementation Aviation Rulemaking Committee (AD ARC), to enhance the AD system. One enhancement is a new process for annotating which steps in the service information are “required for compliance” (RC) with an AD. Differentiating these steps from other tasks in the service information is expected to improve an owner's/operator's understanding of AD requirements and help provide consistent judgment in AD compliance.
In response to the AD Implementation ARC, the FAA released AC 20-176A, dated June 16, 2014 (
Boeing Alert Service Bulletin 777-53A0075, dated January 14, 2015, includes the concept of RC. In paragraph 3.B. of the Work Instructions of Boeing Alert Service Bulletin 777-53A0075, dated January 14, 2015, certain steps are marked RC. The step that specifies “Put the airplane back into a serviceable condition” is not marked RC. Therefore, no change to this final rule is necessary in this regard.
Boeing and United Airlines (UA) asked that the language in paragraph (h) of the proposed AD be reworded for clarity. Boeing asked that we account for the small crack repair being performed on one side only. UA stated that as written, inspecting the left side and right side forward outer chords is incorrect since the small crack repair is performed on one side only. UA noted that the small crack repair may be accomplished on one side of the airplane only, depending on inspection findings. UA asked that paragraph (h) of the proposed AD be changed to specify “. . . do a surface high frequency eddy current (HFEC) inspection, an open-hole HFEC inspection, and a detailed inspection for cracking of the repaired side (left, right, or both) forward outer chords of the STA 2370 pivot bulkhead.” Boeing recommended that the language be reworded to specify an “. . . inspection for cracking of the repaired forward outer chords . . .”
We agree with the commenters' requests for the reasons provided. We have changed the language in paragraph (h) of this AD to specify “. . . do a surface HFEC inspection, an open-hole HFEC inspection, and a detailed inspection for cracking of the repaired side forward outer chords of the STA 2370 pivot bulkhead.”
Boeing and UA asked that the language in paragraph (i) of the proposed AD be reworded for clarity. Boeing asked that we account for the scenario where the small crack repair is performed on one side only. Boeing stated that the terminating actions for each side of the bulkhead are independent of each other. UA stated that using “and” is incorrect because the modification can only be accomplished on one side, not both the left and right sides, depending on inspection findings.
We agree with the commenters for the reasons provided. We have changed the language in paragraph (i) of this AD accordingly.
All Nippon Airways (ANA) stated that Boeing Alert Service Bulletin 777-53A0075, dated January 14, 2015; and Boeing Service Bulletin 777-53-0076, dated January 14, 2015; contain many inconsistencies. We infer that ANA is requesting that we include revised service information because there are errors in the original issues.
We agree with the commenter. Boeing has issued Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015; and Boeing Service Bulletin 777-53-0076, Revision 1, dated December 21, 2015; which include changes found during validation and clarify and correct issues identified by operators. We have included the revised service information as the appropriate source of service information for accomplishing the actions required by this AD and we have referred to Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015, in the applicability in paragraph (c) of this AD. We have also added a new credit paragraph (k) to this AD for using the original issues of the service information and reidentified subsequent paragraphs accordingly.
Boeing asked that we add a new paragraph (j)(3) to the proposed AD to specify the following:
If conducting the Part 2 Small Crack Repair of the Service Bulletin 777-53A0075 dated January 14, 2015, verify the fastener heads and nuts will not interfere with the fillet radius of the parts in the repair installation. If interference will occur, repair before further flight using a method approved in accordance with the procedures specified in paragraph (k) of this AD. . .
Boeing also asked that we add a reference to paragraph (j)(3) in paragraph (g) of the proposed AD by including it in the exception sentence. Boeing stated that during a recent validation it was discovered that, in some cases, radius fillers are required to prevent fasteners from riding the fillet radius of the extended splice chord used in the small crack repair specified in Part 2 of Boeing Alert Service Bulletin 777-53A0075, dated January 14, 2015.
We agree with the commenter that interference between the fastener and fillet case should be minimized; however, we do not agree to add a new paragraph (j)(3) to this AD. Boeing has issued Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015, which includes instructions for accomplishing the small crack repair. As stated previously, we have revised this AD to refer to Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015, for accomplishing certain actions required by this AD.
Boeing asked that we change the service information number identified in paragraph (j)(2) of the proposed AD from “777-530076” to “777-53-0076.”
We agree that the hyphen is missing from the service information number. We have included the hyphen in the service information number identified in paragraph (j)(2) of this AD accordingly.
We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.
We reviewed the following Boeing service information.
• Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015. This service information describes procedures for repetitive detailed and HFEC inspections for cracking of the outer flanges of the left and right side forward outer chords of the STA 2370 pivot bulkhead, repetitive post-repair inspections for certain airplanes, and related investigative and corrective actions.
• Boeing Service Bulletin 777-53-0076, Revision 1, dated December 21, 2015. This service information describes procedures for a modification of the STA 2370 pivot bulkhead by replacing the left and right side forward outer chords and upper splice angles, and
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD affects 60 airplanes of U.S. registry.
We estimate the following costs to comply with this AD:
We estimate the following costs to do any necessary repairs and modifications that would be required based on the results of the inspection. We have no way of determining the number of airplanes that might need these actions.
According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective June 6, 2016.
None.
This AD applies to The Boeing Company Model 777-200 and -300 series airplanes, certificated in any category, as identified in Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015.
Air Transport Association (ATA) of America Code 53, Fuselage.
This AD was prompted by reports of fatigue cracking of the forward outer chord of the station (STA) 2370 pivot bulkhead. We are issuing this AD to detect and correct fatigue cracking of the outer flanges of the left and right side forward outer chords of the STA 2370 pivot bulkhead, which could result in a severed forward outer chord and consequent loss of horizontal stabilizer control.
Comply with this AD within the compliance times specified, unless already done.
At the times specified in table 1 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015, except as provided in paragraph (j)(1) of this AD: Do a detailed inspection and high frequency eddy current (HFEC) inspections for cracking of the left and right side forward outer chords of the STA 2370 pivot bulkhead, and do all applicable related investigative and corrective actions, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015, except as provided in paragraph (j)(2) of this AD. Do all applicable related investigative and corrective actions before further flight. Repeat the inspections thereafter at the applicable intervals specified in table 1 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015, until the modification specified in paragraph (i) of this AD is done.
For airplanes on which any repair specified in Part 2 of the Accomplishment Instructions of Boeing Alert Service Bulletin 777-53A0075 has been done: At the times specified in table 2 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015, do a surface HFEC inspection, an open-hole HFEC inspection, and a detailed inspection for cracking of the repaired side forward outer chords of the STA 2370 pivot bulkhead, and do all applicable related investigative and corrective actions, in accordance with Part 3 of the Accomplishment Instructions of Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015, except as required by paragraph (j)(2) of this AD. Do all applicable related investigative and corrective actions before further flight. Repeat the inspections thereafter at the applicable times specified in table 2 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015, until the modification specified in paragraph (i) of this AD is done.
Modifying the STA 2370 pivot bulkhead by replacing the left or right side forward outer chords and upper splice angles, and doing all applicable related investigative and corrective actions, terminates the repetitive inspections required by paragraphs (g) and (h) of this AD, for the modified location only. The modification must be done in accordance with the Accomplishment Instructions of Boeing Service Bulletin 777-53-0076, Revision 1, dated December 21, 2015, except as required by paragraph (j)(2) of this AD.
(1) Where Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015, specifies a compliance time “after the Original Issue date of this Service Bulletin,” this AD requires compliance within the specified compliance time after the effective date of this AD.
(2) Although Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015; and Boeing Service Bulletin 777-53-0076, Revision 1, dated December 21, 2015; specify to contact Boeing for appropriate action, and Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015, specifies that action as “RC” (Required for Compliance), this AD requires repair before further flight using a method approved in accordance with the procedures specified in paragraph (l) of this AD.
(1) This paragraph provides credit for the actions required by paragraphs (g) and (h) of this AD, if those actions were performed before the effective date of this AD using Boeing Alert Service Bulletin 777-53A0075, dated January 14, 2015.
(2) This paragraph provides credit for the actions required by paragraph (i) of this AD, if those actions were performed before the effective date of this AD using Boeing Service Bulletin 777-53-0076, dated January 14, 2015.
(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (m)(1) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.
(4) Except as required by paragraph (j)(2) of this AD: For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (l)(4)(i) and (l)(4)(ii) apply.
(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. An AMOC is required for any deviations to RC steps, including substeps and identified figures.
(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.
(1) For more information about this AD, contact Narinder Luthra, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle ACO, 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6513; fax: 425-917-6590; email:
(2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (n)(3) and (n)(4) of this AD.
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Boeing Alert Service Bulletin 777-53A0075, Revision 1, dated December 14, 2015.
(ii) Boeing Service Bulletin 777-53-0076, Revision 1, dated December 21, 2015.
(3) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207;
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for all Airbus Model A318-111 and -112 airplanes; Model A319-111, -112, -113, -114, and -115 airplanes; Model A320-211, -212, and -214 airplanes; and Model A321-111, -112, -211, -212, and -213 airplanes. This AD was prompted by the results of an evaluation by the design approval holder (DAH). During a residual fatigue test, the forward engine mount failed prior to reaching the threshold/interval for the detailed inspections of the forward engine mounts specified in the airworthiness limitations. This AD requires repetitive detailed inspections of the right and left forward engine mounts, and corrective action if necessary. These inspections are required by AD 2015-05-02. This AD reduces the compliance times for those inspections. We are issuing this AD to detect and correct fatigue cracking in the forward engine mounts. Such cracking could result in reduced structural integrity of the airplane and could lead to in-flight loss of an engine, possibly resulting in reduced controllability of the airplane.
This AD is effective June 6, 2016.
For service information identified in this final rule, contact Airbus, Airworthiness Office—EIAS, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
You may examine the AD docket on the Internet at
Sanjay Ralhan, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1405; fax 425-227-1149.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus Model A318-111 and -112 airplanes; Model A319-111, -112, -113, -114, and -115 airplanes; Model A320-211, -212, and -214 airplanes; and Model A321-111, -112, -211, -212, and -213 airplanes. The NPRM published in the
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2015-0038, dated March 4, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A318-111 and -112 airplanes; Model A319-111, -112, -113, -114, and -115 airplanes; Model A320-211, -212, and -214 airplanes; and Model A321- 111, -112, -211, -212, and -213 airplanes. The MCAI states:
During a A320 Extended Service Goal (ESG) residual fatigue test, in which new loads were used, taking into account the results of the 2006 fleet survey, the CFM56-5A/5B forward engine mount experienced a failure before reaching the threshold/interval for the detailed inspection of that forward engine mount, as identified in Airbus A318/A319/A320/A321 Airworthiness Limitations Section (ALS) Part 2 (hereafter referred to in this [EASA] AD as `the ALS') task 712111-01. In case of total loss of the primary load path, the current maintenance requirements do not ensure the design integrity of the remaining structure.
This condition, if not corrected, could lead to in-flight loss of an engine, possibly resulting in reduced control of the aeroplane and injury to persons on the ground.
For the reasons described above, this [EASA] AD requires implementation of a reduced threshold and interval for the detailed inspections (DET) of the forward engine mount on both right hand (RH) and left hand (LH) sides, as specified in the ALS, task 712111-01.
Once further investigations and test are completed, the threshold and interval of the ALS task 712111-01 will likely be modified accordingly.
We gave the public the opportunity to participate in developing this AD. The following presents the comment received on the NPRM and the FAA's response.
Airbus requested that all references to WFD be removed from the NPRM. Airbus stated that the root cause of the unsafe condition was not associated with WFD. The unsafe condition was revealed during a residual fatigue test of the CFM56-5A/5B forward engine mount. The forward engine mount failed prior to reaching the threshold/interval for the detailed inspections specified in the Airbus A318/A319/A320/A321 Airworthiness Limitations Section Part 2—Damage-Tolerant Airworthiness Limitation Items.
Based on the information provided by the commenter we agree to remove all references to WFD from the preamble and regulatory text and include an explanation that this final rule was prompted by the results of an evaluation by the DAH.
We reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.
We estimate that this AD affects 940 airplanes of U.S. registry.
We also estimate that it will take about 1 work-hour per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD on U.S. operators to be $79,900, or $85 per product.
We have received no definitive data that will enable us to provide cost estimates for the on-condition parts cost specified in this AD.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective June 6, 2016.
This AD affects AD 2015-05-02, Amendment 39-18112 (80 FR 15152, March 23, 2015) (“AD 2015-05-02”).
This AD applies to all Airbus airplanes, certificated in any category, identified in paragraphs (c)(1), (c)(2), (c)(3), and (c)(4) of this AD.
(1) Model A318-111 and -112 airplanes.
(2) Model A319-111, -112, -113, -114, and -115 airplanes.
(3) Model A320-211, -212, and -214 airplanes.
(4) Model A321-111, -112, -211, -212, and -213 airplanes.
Air Transport Association (ATA) of America Code 05, Periodic Inspections.
This AD was prompted by the results of an evaluation by the design approval holder. During a residual fatigue test the forward engine mount failed prior to reaching the threshold/interval for the detailed inspections of the forward engine mounts specified in the airworthiness limitations. We are issuing this AD to detect and correct fatigue cracking in the forward engine mounts. Such cracking could result in reduced structural integrity of the airplane and could lead to in-flight loss of an engine, possibly resulting in reduced controllability of the airplane.
Comply with this AD within the compliance times specified, unless already done.
At the latest of the times specified in paragraphs (g)(1), (g)(2), and (g)(3) of this AD: Do a detailed inspection of the left and right forward engine mounts for discrepancies (cracking), using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA. Repeat the inspection thereafter at intervals not to exceed 800 flight cycles.
Guidance for the inspection and engine mount replacement can be found in Task 712111-210-040 of the Airbus A318/A319/A320/A321 Maintenance Manual.
(1) Within 800 flight cycles since the first flight of the airplane.
(2) Within 800 flight cycles since the most recent detailed inspection specified in Airbus Airworthiness Limitation Tasks 712111-01-1, 712111-01-2, 712111-01-3, or 712111-01-4, “Detailed Inspection of Forward Engine Mount Installation,” as applicable.
(3) Within 800 flight cycles after the effective date of this AD.
If any discrepancy (cracking) is found during any inspection required by paragraph (g) of this AD: Before further flight, replace the affected forward engine mount with a serviceable part, using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA).
Replacement of a forward engine mount does not constitute terminating action for the repetitive inspections required by paragraph (g) of this AD.
Accomplishment of the inspections required by paragraph (g) of this AD terminates the initial and repetitive inspections specified in paragraph (n)(2) of AD 2015-05-02, for Airbus Airworthiness Limitation Tasks 712111-01-1, 712111-01-2, 712111-01-3, and 712111-01-4, “Detailed Inspection of Forward Engine Mount Installation.”
The following provisions also apply to this AD:
(1)
(2)
Special flight permits, as described in Section 21.197 and Section 21.199 of the Federal Aviation Regulations (14 CFR 21.197 and 21.199), are not allowed.
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2015-0038, dated March 4, 2015, for related information. This MCAI may be found in the AD docket on the Internet at
(2) For service information identified in this AD, contact Airbus, Airworthiness Office—EIAS, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
None.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for all Airbus Model A318, A319, A320, and A321 series airplanes. This AD was prompted by reports of in-flight loss of fixed and hinged main landing gear (MLG) fairings, and reports of post-modification MLG fixed fairing assemblies that have wear and corrosion. This AD requires, for certain airplanes, repetitive replacements of the fixed fairing upper and lower attachment studs of both left-hand (LH) and the right-hand (RH) MLG; and repetitive inspections for corrosion, wear, fatigue cracking, and loose studs of each forward stud assembly of the fixed fairing door upper and lower forward attachment of both LH and RH MLG; and replacement if necessary. This AD also provides an optional terminating modification for the repetitive replacements of the fixed fairing upper and lower attachment studs. We are issuing this AD to prevent in-flight detachment of an MLG fixed fairing and consequent damage to the airplane.
This AD becomes effective June 6, 2016.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of June 6, 2016.
You may examine the AD docket on the Internet at
For service information identified in this final rule, contact Airbus, Airworthiness Office—EIAS, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
Sanjay Ralhan, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1405; fax 425-227-1149.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus Model A318, A319, A320, and A321 series airplanes. The NPRM published in the
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2015-0001R1, dated January 15, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A318, A319, A320, and A321 series airplanes. The MCAI states:
Several occurrences of in-flight loss of main landing gear (MLG) fixed and hinged fairings were reported. The majority of reported events occurred following scheduled maintenance activities. One result of the investigation was that a discrepancy between the drawing and the maintenance manuals was discovered. The maintenance documents were corrected to prevent mis-rigging of the MLG fixed and hinged fairings, which could induce fatigue cracking.
Airbus issued Service Bulletin (SB) A320-52-1083, providing instructions for a one-time inspection of the MLG fixed fairing composite insert and the surrounding area, replacement of the adjustment studs at the lower forward position and adjustment to the new clearance tolerances. That SB was replaced by Airbus SB A320-52-1100 (mod 27716) introducing a re-designed location stud, rod end and location plate at the forward upper and lower leg fixed-fairing
This condition, if not detected and corrected, could lead to further cases of in-flight detachment of a MLG fixed fairing, possibly resulting in injury to persons on the ground and/or damage to the aeroplane.
To address this potential unsafe condition, EASA issued AD 2014-0096 [
Since EASA AD 2014-0096 was issued, Airbus developed an alternative inspection programme to meet the AD requirements. In addition, a terminating action (mod 155648) was developed, which is to be made available for in service aeroplanes through Airbus SB A320-52-1165.
For the reasons described above, this [EASA] AD retains the requirements of EASA AD 2014-0096, which is superseded, and adds an optional terminating action for the repetitive inspections. For post-mod aeroplanes,
Prompted by these developments, EASA issued AD * * *, retaining the requirements of EASA AD 2014-0096, which was superseded, and adding an optional terminating action for the repetitive inspections. For post-mod aeroplanes,
Since that [EASA] AD was issued, it was discovered that a certain plate support, Part Number (P/N) D5285600620000 as listed in Table 3 of the [EASA] AD, remains part of the post SB A320-52-1165 configuration and is therefore not affected by any prohibition of installation—paragraph (11) of the [EASA] AD. In addition, an error was detected in Table 1 of the [EASA] AD (missing P/N plate support) and paragraph (9) was found to be incorrectly worded.
For the reasons described above, this [EASA] AD is revised to introduce the necessary corrections.
Required actions also include, for airplanes in Airbus pre-Airbus Modification 27716 and pre-Airbus Service Bulletin A320-52-1100 configuration on which certain components have been installed, repetitive replacements of the fixed fairing upper and lower attachment studs of both the LH and RH MLG. An optional terminating modification also is provided for the repetitive replacements of the fixed fairing upper and lower attachment studs.
The optional terminating modification includes a resonance frequency inspection for debonding of the composite insert and delamination of the honeycomb area around the insert, and applicable corrective actions if necessary; and installation of new studs, rod ends, and location plates at the forward upper and lower leg fixed-fairing positions.
An additional optional terminating modification, for airplanes in pre-Airbus Modification 27716 and pre-Airbus Service Bulletin A320-52-1100 configuration, includes installation of a locking device, new studs, rod ends, and location plates at the forward upper and lower leg fixed-fairing positions.
You may examine the MCAI in the AD docket on the Internet at
We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM and the FAA's response to each comment.
United Airlines (UAL) requested that we revise the
We agree with the commenter's request. The published version of the NPRM
UAL requested that we revise paragraphs (i), (k), and (m) of the proposed AD, by replacing the term “fatigue” with “deformation.” UAL stated that the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, dated February 4, 2014, do not provide any specific method for doing a detailed inspection for indications of fatigue.
We disagree with the commenter's Request to replace the term “fatigue” with “deformation.” The intent of the Airbus service information and the FAA AD is to inspect for “fatigue cracking.” For clarity, we have revised the
American Airlines (AAL) requested that we revise the proposed AD to reference Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015.
We agree with the commenter's request. No additional work is required by this revision of the service information. We have revised paragraphs (g), (i), (k), (l), and (m) of this AD to reference Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015. We have added credit for the actions required by paragraphs (g), (i), (k), (l), and (m) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320-52-1163, dated February 4, 2014.
AAL requested that we revise paragraphs (k), (l), (m), and (n) of the proposed AD to remove the re-identification of the fairing part number specified in Airbus Service Bulletin A320-52-1165, including Appendix 01, dated November 3, 2014, on airplanes that are pre-Airbus Modification 27716 and post-modification Airbus Service Bulletin A320-52-1100. AAL stated that a discrepancy in Airbus Service Bulletin A320-52-1165, including Appendix 01, dated November 3, 2014, makes it impossible to re-identify the fairing part number.
We agree with AAL that Airbus Service Bulletin A320-52-1165, including Appendix 01, dated November 3, 2014, has a discrepancy in the re-identification of the fairing part number. Airbus has revised the instructions for re-identification of the fairing part number for pre-Airbus Modification 27716 and post-modification Airbus Service Bulletin A320-52-1100 configuration airplanes in Airbus Service Bulletin A320-52-1165, Revision 01, dated October 23, 2015, excluding Appendix 01, dated November 3, 2014, and including Appendix 02, dated October 23, 2015. We have revised paragraphs (k), (l)(1), (m), and (n)(3) of this AD to reference Airbus Service Bulletin A320-52-1165, Revision 01, dated October 23, 2015, excluding Appendix 01, dated November 3, 2014, and including Appendix 02, dated October 23, 2015, as the appropriate source of service information for the applicable actions in those paragraphs.
AAL requested that we specify the allowable corrosion limits that would allow release of the airplane into service with corroded stud assemblies. AAL stated that paragraph (l)(2) of the proposed AD allows an operator to release an airplane into service with corrosion on the stud assembly, without accomplishing any corrective action at the time of the corrosion findings, provided that the stud assembly is not loose.
We disagree with the commenter's request to specify corrosion limits in the AD. The corrosion level(s) and subsequent action(s) in general are defined in the AAL corrosion prevention and corrosion control maintenance program (CPCP). For this AD, operators have an option to either replace the affected stud assemblies (that have corrosion but the corroded stud is not loose) before further flight as specified in paragraph (l)(1) of this AD or perform repetitive inspections as specified in paragraph (l)(2) of this AD until corrective actions are done as specified in paragraph (m) of this AD. We have not changed this AD in this regard.
UAL requested that we add a paragraph in the proposed AD, to remove the Airbus Service Bulletin A320-52-1163, dated February 4, 2014, requirement to report all inspection findings to Airbus.
We agree with the commenter's request. We have added new paragraph (q) to this AD, which states that although Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015, specifies to submit certain information to the manufacturer, and specifies that action as “RC” (Required for Compliance), this AD does not include that requirement. We have redesignated subsequent paragraphs accordingly. Although not required to do so by this AD, we recommend that operators submit such information based on the Airbus service information request. This information may be beneficial to Airbus for product improvements.
AAL requested clarification of the repetitive inspection interval in paragraph (l)(2) of the proposed AD. AAL stated that, if Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015, was referenced in this AD, this service information includes an option for a repetitive inspection interval of 750 flight cycles.
We agree to clarify the repetitive inspection interval in paragraph (l)(2) of this AD. The 4-month repetitive inspection interval specified in paragraph (l)(2) of this AD has precedence over the 750-flight-cycle interval specified in Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015. We have not changed this AD in this regard.
Delta Airlines (DAL) requested that we revise paragraph (k) of the proposed AD to require the replacement of only the affected assembly and not the upper and lower fixed fairing forward attachment assemblies of the LH and RH MLG because of one finding on an affected assembly. DAL stated that paragraph (k) of the proposed AD places an undue burden on operators by having to replace airworthy parts because one of the affected parts was found with a finding of corrosion, wear, fatigue cracking, or loose studs.
We agree with the commenter's request. We agree with DAL that only parts with indication of corrosion, wear, fatigue cracking, or loose studs should be replaced. We have revised paragraph (k) of this AD to require replacing discrepant upper and lower fixed fairing forward attachment stud assemblies of the LH and RH MLG.
DAL requested that we revise paragraph (o) of the proposed AD to indicate that paragraphs (g) through (n) of the proposed AD are not applicable to post-Airbus Modification 155648 configuration airplanes. DAL stated that paragraph (o) of the proposed AD provides relief from the requirements of paragraphs (g) and (i) of the proposed AD, but related paragraphs (h), (j), (k), (l), and (n) of the proposed AD are not included in the relief.
We agree with the commenter that the intent of this AD is to not require paragraphs (g) through (n) of this AD if conditions stated in paragraph (o) of this AD are met. The requirements of paragraphs (k), (l), and (m) of this AD are conditional and will not apply to operators that are not required to do paragraphs (g) and (i) of this AD. Paragraph (n) of this AD is an explanation of terminating actions. We have clarified paragraphs (h) and (j) of this AD to refer to the exempt airplanes.
DAL requested that we delete paragraph (p)(1) of the proposed AD. DAL stated that paragraph (p)(1) of the proposed AD applies to pre-Airbus Modification 27716 and pre-Airbus Service Bulletin A320-52-1100 configuration airplanes, but provides a requirement for post-Airbus Modification 27716 or post-Airbus Service Bulletin A320-52-1100 configuration airplanes, which is redundant with the requirements of paragraph (p)(2) of the proposed AD. Delta also requested that we replace the word “and” in paragraphs (p)(1) through (p)(4) of the proposed AD with “or” to clarify the requirement and be consistent with the wording used in paragraph (i) of the proposed AD.
We partially agree with the commenter's requests. We agree with DAL to revise paragraphs (p)(1) through (p)(4) of this AD to replace “and” with “or.” We do not agree with deleting paragraph (p)(1) of this AD. Paragraph (p)(1) of this AD is applicable for airplanes in pre-Airbus Modification 27716 or pre-Airbus Service Bulletin A320-52-1100 configuration, and the parts prohibition is effective after doing the actions provided in paragraph (n)(2) of this AD. Paragraph (p)(2) of this AD is applicable for airplanes in post-Airbus Modification 27716 or post-Airbus Service Bulletin A320-52-1100 configuration, and the parts prohibition is effective as of the effective date of this AD. Therefore, paragraphs (p)(1) and (p)(2) of this AD are not redundant. We have not changed this AD in this regard.
DAL requested that we delete paragraph (p)(3) of the proposed AD. DAL stated that paragraph (p)(3) of the proposed AD applies to pre-Airbus Modification 155648 and pre-Airbus Service Bulletin A320-52-1165 configuration airplanes, but provides a requirement for post-Airbus Modification 155648 or post-Airbus Service Bulletin A320-52-1165, which is redundant with the requirements of paragraph (p)(4) of the proposed AD.
We do not agree with the commenter's request. Paragraph (p)(3) of this AD is applicable for airplanes which have not been modified to post-Airbus Modification 155648 or post-Airbus Service Bulletin A320-52-1165 configuration. Paragraph (p)(4) of this AD is applicable for airplanes that are in post-Airbus Modification 155648 or
We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.
We reviewed the following service information:
• Airbus Service Bulletin A320-52-1100, Revision 01, dated March 12, 1999. This service information describes procedures for modification of the airplane to post-Airbus Modification 27716 configuration (by replacing the location stud, rod end, and location plate at the forward upper and lower leg fixed-fairing positions of the MLG door assemblies). The modification includes a resonance frequency inspection for debonding of the composite insert and delamination of the honeycomb area around the insert, and applicable corrective actions. Corrective actions include repairing the insert. The actions in this service information are an optional terminating modification.
• Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015. This service information describes procedures for inspection of the fixed fairing forward attachments of the MLG door assemblies, and replacement of the fixed fairing upper and lower attachment studs of the LH and RH MLG door assemblies.
• Airbus Service Bulletin A320-52-1165, Revision 01, dated October 23, 2015, excluding Appendix 01, dated November 3, 2014, and including Appendix 02, dated October 23, 2015. This service information describes procedures for replacing the fairing attachment stud assemblies of the MLG door assembly with new assemblies. The actions in this service information are an optional terminating modification.
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
The FAA worked in conjunction with industry, under the Airworthiness Directive Implementation Aviation Rulemaking Committee (ARC), to enhance the AD system. One enhancement was a new process for annotating which procedures and tests in the service information are required for compliance with an AD. Differentiating these procedures and tests from other tasks in the service information is expected to improve an owner's/operator's understanding of crucial AD requirements and helps to provide consistent judgment in AD compliance. The procedures and tests identified as RC in any service information have a direct effect on detecting, preventing, resolving, or eliminating an identified unsafe condition.
As specified in a NOTE under the Accomplishment Instructions of the specified service information, procedures and tests that are identified as RC in any service information must be done to comply with the AD. However, procedures and tests that are not identified as RC are recommended. Those procedures and tests that are not identified as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an alternative method of compliance (AMOC), provided the procedures and tests identified as RC can be done and the airplane can be put back in an airworthy condition. Any substitutions or changes to procedures or tests identified as RC will require approval of an AMOC.
We estimate that this AD affects 851 airplanes of U.S. registry.
We also estimate that it will take about 18 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Required parts will cost about $4,110 per product. Based on these figures, we estimate the cost of this AD on U.S. operators to be $4,799,640, or $5,640 per product.
We estimate that the optional terminating modification would take about 18 work-hours and require parts costing $4,110, for a cost of $5,640 per product.
In addition, we estimate that any necessary follow-on actions would take about 18 work-hours and require parts costing $4,110, for a cost of $5,640 per product. We have no way of determining the number of aircraft that might need these actions.
According to the manufacturer, some of the costs of this AD might be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
You may examine the AD docket on the Internet at
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD becomes effective June 6, 2016.
None.
This AD applies to the Airbus airplanes identified in paragraphs (c)(1) through (c)(4) of this AD, certificated in any category, all manufacturer serial numbers.
(1) Airbus Model A318-111, -112, -121, and -122 airplanes.
(2) Airbus Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes.
(3) Airbus Model A320-211, -212, -214, -231, -232, and -233 airplanes.
(4) Airbus Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes.
Air Transport Association (ATA) of America Code 52, Doors.
This AD was prompted by reports of in-flight loss of fixed and hinged main landing gear (MLG) fairings, and reports of post-modification MLG fixed fairing assemblies that have wear and corrosion. We are issuing this AD to prevent in-flight detachment of an MLG fixed fairing and consequent damage to the airplane.
Comply with this AD within the compliance times specified, unless already done.
For airplanes in pre-Airbus Modification 27716 and pre-Airbus Service Bulletin A320-52-1100 configuration, with any of the components installed that are identified in paragraphs (g)(1) through (g)(5) of this AD: At the applicable compliance time specified in paragraph (h) of this AD, replace fixed fairing upper and lower attachment studs of both left-hand (LH) and right-hand (RH) MLG, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015. Repeat the replacements thereafter at intervals not to exceed 6,500 flight cycles.
(1) Plate—support having part number (P/N) D5284024820000.
(2) Plate—support P/N D5284024820200.
(3) Stud—adjustment having P/N D5284024420000.
(4) Rod end assembly (lower) having P/N D5284000500000.
(5) Rod end assembly (upper) having P/N D5284000600000.
For airplanes identified in paragraph (g) of this AD, except as provided by paragraph (o) of this AD: Do the initial replacement required by paragraph (g) of this AD at the latest of the times specified in paragraphs (h)(1) through (h)(4) of this AD.
(1) Before the accumulation of 6,500 total flight cycles since the airplane's first flight.
(2) Within 6,500 flight cycles since the last installation of a pre-Airbus Modification 27716 stud on the airplane.
(3) Within 1,500 flight cycles after the effective date of this AD.
(4) Within 8 months after the effective date of this AD.
For airplanes in post-Airbus Modification 27716 or post-Airbus Service Bulletin A320-52-1100 configuration, with any of the components installed that are identified in paragraphs (i)(1), (i)(2), and (i)(3) of this AD: At the applicable compliance time specified in paragraph (j) of this AD, do a detailed inspection of the LH and RH MLG forward stud assemblies of the fixed fairing door upper and lower forward attachments of both LH and RH MLG for indications of corrosion, wear, fatigue cracking, and loose studs, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015. Repeat the inspection thereafter at intervals not to exceed 12 months. Replacement of both LH and RH MLG forward stud assemblies on an airplane, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015, extends the interval for the next detailed inspection to 72 months; and the inspection must be repeated thereafter at intervals not to exceed 12 months.
(1) Stud—adjustment having P/N D5285600720000.
(2) Rod end assembly (lower) having P/N D5285600400000.
(3) Rod end assembly (upper) having P/N D5285600500000.
For airplanes identified in paragraph (i) of this AD, except as provided by paragraph (o) of this AD: Do the initial inspection required by paragraph (i) of this AD at the latest of the times specified in paragraphs (j)(1) through (j)(4) of this AD.
(1) Before the accumulation of 72 months since the airplane's first flight.
(2) Within 72 months since the last installation of a post-Airbus Modification 27716 assembly or since accomplishment of the actions specified in Airbus Service Bulletin A320-52-1100.
(3) Within 1,500 flight cycles after the effective date of this AD.
(4) Within 8 months after the effective date of this AD.
If any discrepancy (including any indication of corrosion, wear, fatigue cracking, or loose studs) of any MLG forward stud assembly is found during any inspection required by paragraph (i) of this AD, except as specified in paragraph (l) of this AD: Before further flight, replace the discrepant upper and lower fixed fairing forward stud assemblies of the LH and RH MLG, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015; or Airbus Service Bulletin A320-52-1165, Revision 01, dated October 23, 2015, excluding Appendix 01, dated November 3, 2014, and including Appendix 02, dated October 23, 2015.
If any corrosion is found during any inspection required by paragraph (i) of this AD on any MLG fixed fairing forward stud assembly (upper, lower, LH or RH), but the corroded stud is not loose: Do the action specified in paragraph (l)(1) or (l)(2) of this AD.
(1) Before further flight, replace the affected assembly, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015; or Airbus Service Bulletin A320-52-1165, Revision 01, dated October 23, 2015, excluding Appendix 01, dated November 3, 2014, and including Appendix 02, dated October 23, 2015.
(2) Within 4 months after finding corrosion, and thereafter at intervals not to exceed 4 months, do a detailed inspection for indications of corrosion, wear, fatigue cracking, and loose studs of the forward stud assembly of the affected (LH or RH) MLG, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015.
If any indication of wear, fatigue cracking, or loose studs of any forward stud assembly is found during any inspection required by paragraph (l)(2) of this AD: Before further flight, replace the affected (LH or RH) MLG fixed fairing forward stud assembly, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015; or Airbus Service Bulletin A320-52-1165, Revision 01, dated October 23, 2015, excluding Appendix 01, dated November 3, 2014, and including Appendix 02, dated October 23, 2015.
(1) Replacement of parts on an airplane, as required by paragraph (g), (k), (l)(1), or (m) of this AD, does not constitute terminating action for the repetitive inspections required by paragraph (i) of this AD, except as specified in paragraph (n)(3) of this AD.
(2) The repetitive replacements required by paragraph (g) of this AD may be terminated by modification of the airplane to post-Airbus Modification 27716 configuration, including a resonance frequency inspection for debonding of the composite insert and delamination of the honeycomb area around the insert, and all applicable corrective actions, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1100, Revision 01, dated March 12, 1999, provided all applicable corrective actions are done before further flight. Thereafter, refer to paragraph (i) of this AD to determine the compliance time for the next detailed inspection required by this AD.
(3) Modification of an airplane, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1165, Revision 01, dated October 23, 2015, excluding Appendix 01, dated November 3, 2014, and including Appendix 02, dated October 23, 2015, constitutes terminating action for actions required by paragraphs (g) through (m) of this AD for the airplane on which the modification is done.
An airplane on which Airbus Modification 155648 has been embodied in production is not affected by the requirements of paragraphs (g) and (i) of this AD, provided that no affected component, identified by part number as listed paragraphs (g)(1) through (g)(5) and (i)(1) through (i)(3) of this AD, has been installed on that airplane since first flight of the airplane.
(1) For airplanes in pre-Airbus Modification 27716 or pre-Airbus Service Bulletin A320-52-1100 configuration: No person may install a component identified in paragraphs (g)(1) through (g)(5) of this AD on any airplane after doing the actions provided in paragraph (n)(2) of this AD.
(2) For airplanes in post-Airbus Modification 27716 or post Airbus Service Bulletin A320-52-1100 configuration: As of the effective date of this AD, no person may install a component identified in paragraphs (g)(1) through (g)(5) of this AD on any airplane.
(3) For airplanes in pre-Airbus Modification 155648 or pre-Airbus Service Bulletin A320-52-1165 configuration: No person may install a component identified in paragraphs (g)(1) through (g)(5) and (i)(1) through (i)(3) of this AD on any airplane after doing the actions provided in paragraph (n)(3) of this AD.
(4) For airplanes in post-Airbus Modification 155648 or post-Airbus Service Bulletin A320-52-1165 configuration: As of the effective date of this AD, no person may install a component identified in (g)(1) through (g)(5) and (i)(1) through (i)(3) of this AD on any airplane.
Although Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015, specifies to submit certain information to the manufacturer, and specifies that action as “RC” (Required for Compliance), this AD does not include that requirement.
(1) This paragraph provides credit for optional actions provided by paragraph (n)(2) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320-52-1100, dated December 7, 1998, which is not incorporated by reference in this AD.
(2) This paragraph provides credit for the actions required by paragraphs (g), (i), (k), (l), and (m) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320-52-1163, dated February 4, 2014, which is not incorporated by reference in this AD.
The following provisions also apply to this AD:
(1)
(2)
(3)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2015-0001R1, dated January 15, 2015, for related information. This MCAI may be found in the AD docket on the Internet at
(2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (u)(3) and (u)(4) of this AD.
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) Airbus Service Bulletin A320-52-1100, Revision 01, dated March 12, 1999.
(ii) Airbus Service Bulletin A320-52-1163, Revision 01, including Appendix 01, dated June 22, 2015.
(iii) Airbus Service Bulletin A320-52-1165, Revision 01, dated October 23, 2015, excluding Appendix 01, dated November 3, 2014, and including Appendix 02, dated October 23, 2015.
(3) For service information identified in this AD, contact Airbus, Airworthiness Office—EIAS, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are superseding Airworthiness Directive (AD) 2014-17-51 for certain Bombardier, Inc. Model CL-600-2B16 airplanes. AD 2014-17-51 required inspecting the inboard flap fasteners of the hinge-box forward fitting at Wing Station (WS) 76.50 and WS 127.25 to determine the orientation and condition of the fasteners, as applicable, and replacement or repetitive inspections of the fasteners if necessary. AD 2014-17-51 also provided for optional terminating action for the requirements of that AD. This new AD requires accomplishment of the previously optional terminating action. This AD was prompted by a determination that that additional action is necessary. We are issuing this AD to detect and correct incorrectly oriented or fractured fasteners, that could result in premature failure of the fasteners attaching the inboard flap hinge-box forward fitting; failure of the fasteners could lead to the detachment of the flap hinge box and the flap surface, and consequent loss of control of the airplane.
This AD is effective June 6, 2016.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of June 6, 2016.
The Director of the Federal Register approved the incorporation by reference of certain other publications listed in this AD as of November 12, 2014 (79 FR 64088, October 28, 2014).
The Director of the Federal Register approved the incorporation by reference of certain other publications listed in this AD as of March 6, 2014 (79 FR 9389, February 19, 2014).
For service information identified in this final rule, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-5000; fax 514-855-7401; email
You may examine the AD docket on the Internet at
Aziz Ahmed, Aerospace Engineer, Propulsion and Services Branch, ANE-173, FAA, New York Aircraft Certification Office (ACO), 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7329; fax 516-794-5531.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2014-17-51, Amendment 39-17999 (79 FR 64088, October 28, 2014) (“AD 2014-17-51”). AD 2014-17-51 applied to certain Bombardier, Inc. Model CL-600-2B16 airplanes. The NPRM published in the
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2014-27R1, dated August 29, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc. Model CL-600-2B16 airplanes. The MCAI states:
There have been three in-service reports on 604 Variant aeroplanes of a fractured fastener head on the inboard flap hinge-box forward fitting at Wing Station (WS) 76.50, found during a routine maintenance inspection. Investigation revealed that the installation of these fasteners on the inboard flap hinge-box forward fittings at WS 76.50 and WS 127.25, on both wings, does not conform to the engineering drawings. Incorrect installation may result in premature failure of the fasteners attaching the inboard flap hinge-box forward fitting. Failure of the fasteners could lead to the detachment of the flap hinge box and consequently the detachment of the flap surface. The loss of a flap surface could adversely affect the continued safe operation of the aeroplane.
The original issue of [Canadian] AD CF-2013-39 [
After the issuance of [Canadian] AD CF-2013-39, there has been one reported incident on a 604 Variant aeroplane where four fasteners were found fractured on the same flap hinge-box forward fitting. The investigation determined that the fasteners were incorrectly installed.
The original issue of this [Canadian] AD was issued to reduce the initial and repetitive inspection intervals previously mandated in [Canadian] AD CF-2013-39, and to impose replacement of the incorrectly oriented fasteners within 24 months. The CL-600-1A11, -2A12 and -2B16 (601-3A/-3R Variant) aeroplanes are addressed through [Canadian] AD CF-2013-39R1.
Revision 1 of this [Canadian] AD is issued to clarify the requirements for the initial and repetitive inspections.
You may examine the MCAI in the AD docket on the Internet at
We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.
Paragraph (k) of the NPRM specified to do the replacement on “both” wings. However, the replacement only needs to be done on the affected wing on which incorrectly oriented fasteners were found but none were found to be fractured. We have revised paragraph (k) of this AD to specify accomplishing the replacement on the affected wings. We
We reviewed the relevant data and determined that air safety and the public interest require adopting this AD with the change described previously and minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.
Bombardier has issued Alert Service Bulletins:
• A604-57-006, Revision 04, dated November 12, 2014, including Appendices 1 and 2, dated September 26, 2013; and
• A605-57-004, Revision 04, dated November 12, 2014, including Appendices 1 and 2, dated September 26, 2013.
The service information describes repetitive detailed visual inspections of each inboard flap fastener of the hinge-box forward fitting at WS 76.50 and WS 127.25, on both wings, and, if necessary, replacement of the fasteners. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD affects 285 airplanes of U.S. registry.
The actions required by AD 2014-17-51, and retained in this AD take about 1 work-hour per product, at an average labor rate of $85 per work-hour. Required parts cost about $0 per product. Based on these figures, the estimated cost of the actions that are required by AD 2014-17-51 is $85 per product.
We also estimate that it will take about 58 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Required parts cost about $753 per product. Based on these figures, we estimate the cost of this AD on U.S. operators to be $1,619,655, or $5,683 per product.
In addition, we estimate that any necessary follow-on actions will take about 58 work-hours and require parts costing $753, for a cost of $5,683 per product. We have no way of determining the number of aircraft that might need this action.
According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective June 6, 2016.
(1) This AD replaces AD 2014-17-51, Amendment 39-17999 (79 FR 64088, October 28, 2014) (“AD 2014-17-51”).
(2) This AD affects AD 2014-03-17, Amendment 39-17754 (79 FR 9389, February 19, 2014) (“AD 2014-03-17”), only for the airplanes identified in paragraph (c) of this AD.
This AD applies to Bombardier, Inc. Model CL-600-2B16 airplanes, certificated in any category, serial numbers 5301 through 5665 inclusive, and 5701 through 5920 inclusive.
Air Transport Association (ATA) of America Code 57, Wings.
This AD was prompted by reports of fractured fastener heads on the inboard flap hinge-box forward fitting at Wing Station (WS) 76.50 due to incorrect installation. We are issuing this AD to detect and correct incorrectly oriented or fractured fasteners, that could result in premature failure of the fasteners attaching the inboard flap hinge-box forward fitting; failure of the fasteners could lead to the detachment of the flap hinge box and the flap surface, and consequent loss of control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
This paragraph restates the requirements of paragraph (g) of AD 2014-17-51, with new service information. For airplanes on which the actions required by AD 2014-03-17 have not been done as of November 12, 2014 (the effective date of AD 2014-17-51): Within 10
(1) If all fasteners are found intact and correctly oriented, no further action is required by this AD.
(2) If any fastener is found fractured: Before further flight, remove and replace all forward and aft fasteners at WS 76.50 and WS 127.25, regardless of condition or orientation, on both wings, in accordance with the Accomplishment Instructions of the applicable service information identified in paragraph (g) of this AD. As of the effective date of this AD, only use Bombardier Alert Service Bulletin A604-57-006, Revision 04, dated November 12, 2014, including Appendices 1 and 2, dated September 26, 2013; or Bombardier Alert Service Bulletin A605-57-004, Revision 04, dated November 12, 2014, including Appendices 1 and 2, dated September 26, 2013; as applicable; for the actions required by this paragraph. After replacement of all fasteners as required by this paragraph of this AD, no further action is required by this AD.
(3) If any incorrectly oriented but intact fastener is found, and no fractured fastener is found, repeat the inspection required by paragraph (g) of this AD thereafter at intervals not to exceed 10 flight cycles, until the requirements of paragraph (i)(1) or (k) of this AD have been done.
This paragraph restates the requirements of paragraph (h) of AD 2014-17-51, with new service information. For airplanes on which an inspection required by paragraph (g) or (j) of AD 2014-03-17 has been done as of November 12, 2014 (the effective date of AD 2014-17-51), and on which any incorrectly oriented fastener, but no fractured fastener, was found: Except as provided by paragraph (i)(3) of this AD, do a detailed visual inspection of all inboard flap fasteners of the hinge-box forward fitting at WS 76.50 and WS 127.25, on both wings, to determine if the fasteners are intact (non-fractured, with intact fastener head). Inspect within 10 flight cycles after November 12, 2014, or within 100 flight cycles after the most recent inspection done as required by AD 2014-03-17, whichever occurs first. Inspect in accordance with the Accomplishment Instructions of the applicable service information identified in paragraph (g) of this AD. As of the effective date of this AD, only use Bombardier Alert Service Bulletin A604-57-006, Revision 04, dated November 12, 2014, including Appendices 1 and 2, dated September 26, 2013; or Bombardier Alert Service Bulletin A605-57-004, Revision 04, dated November 12, 2014, including Appendices 1 and 2, dated September 26, 2013; as applicable; for the actions required by this paragraph.
(1) If all fasteners are found intact, repeat the inspection thereafter at intervals not to exceed 10 flight cycles, until the requirements of paragraph (i)(1) or (k) of this AD have been done.
(2) If any fastener is found fractured: Before further flight, remove and replace all forward and aft fasteners at WS 76.50 and WS 127.25, regardless of condition or orientation, on both wings, in accordance with the Accomplishment Instructions of the applicable service information identified in paragraph (g) of this AD. As of the effective date of this AD, only use Bombardier Alert Service Bulletin A604-57-006, Revision 04, dated November 12, 2014, including Appendices 1 and 2, dated September 26, 2013; or Bombardier Alert Service Bulletin A605-57-004, Revision 04, dated November 12, 2014, including Appendices 1 and 2, dated September 26, 2013; as applicable; for the actions required by this paragraph. After replacement of all fasteners as required by this paragraph, no further action is required by this AD.
This paragraph restates the terminating action specified in paragraph (i) of AD 2014-17-51), with new service information.
(1) Replacement of all forward and aft fasteners at WS 76.50 and WS 127.25, on both wings, in accordance with the Accomplishment Instructions of the applicable service information identified in paragraph (g) of this AD, terminates the requirements of this AD. As of the effective date of this AD, only use Bombardier Alert Service Bulletin A604-57-006, Revision 04, dated November 12, 2014, including Appendices 1 and 2, dated September 26, 2013; or Bombardier Alert Service Bulletin A605-57-004, Revision 04, dated November 12, 2014, including Appendices 1 and 2, dated September 26, 2013; as applicable; for the actions specified in this paragraph.
(2) Accomplishment of the applicable requirements of this AD constitutes terminating action for the requirements of AD 2014-03-17 for that airplane only.
(3) Replacement of all fractured and incorrectly oriented fasteners before November 12, 2014 (the effective date of AD 2014-17-51), as provided by paragraph (i) or (k) of AD 2014-03-17, is acceptable for compliance with the requirements of this AD.
This paragraph restates the requirements of paragraph (j) of AD 2014-17-51. Special flight permits to operate the airplane to a location where the airplane can be repaired in accordance with 14 CFR 21.197 and 21.199 are not allowed.
For airplanes on which incorrectly oriented fasteners were found during any inspection required by paragraph (g), (g)(3), (h), or (h)(1) of this AD, but none were found to be fractured: Within 24 months after the effective date of this AD, remove and replace all forward and aft fasteners at WS 76.50 and WS 127.25, regardless of condition or orientation, on affected wings, in accordance with the Accomplishment Instructions of Bombardier Alert Service Bulletin A604-57-006, Revision 04, dated November 12, 2014, including Appendices 1 and 2, dated September 26, 2013 (for serial numbers 5301 through 5665 inclusive); or Bombardier Alert Service Bulletin A605-57-004, Revision 04, dated November 12, 2014, including Appendices 1 and 2, dated September 26, 2013 (for serial numbers 5701 through 5920 inclusive). Accomplishing the requirements of this paragraph terminates the requirements of this AD.
(1) This paragraph provides credit for actions required by paragraphs (g), (h), and (i)(1) of this AD, if those actions were performed before the effective date of this AD using the applicable service information identified in paragraphs (l)(1)(i) and (l)(1)(ii) of this AD, which are not incorporated by reference in this AD.
(i) Bombardier Alert Service Bulletin A604-57-006, Revision 03, dated August 19, 2014, including Appendices 1 and 2, dated September 26, 2013.
(ii) Bombardier Alert Service Bulletin A605-57-004, Revision 03, dated August 19, 2014, including Appendices 1 and 2, dated September 26, 2013.
(2) This paragraph provides credit for actions required by paragraph (k) of this AD, if those actions were done before the effective date of this AD using the applicable service information identified in paragraphs (l)(2)(i) through (l)(2)(iv) of this AD.
(i) Bombardier Alert Service Bulletin A604-57-006, Revision 01, dated September 26, 2013, including Appendices 1 and 2, dated September 26, 2013, which is incorporated by reference in AD 2014-03-17.
(ii) Bombardier Alert Service Bulletin A604-57-006, Revision 02, dated January 22, 2014, including Appendices 1 and 2, dated
(iii) Bombardier Alert Service Bulletin A605-57-004, Revision 01, dated September 26, 2013, including Appendices 1 and 2, dated September 26, 2013, which is incorporated by reference in AD 2014-03-17.
(iv) Bombardier Alert Service Bulletin A604-57-004, Revision 02, dated January 22, 2014, including Appendices 1 and 2, dated September 26, 2013, which was incorporated by reference in AD 2014-17-51.
The following provisions also apply to this AD:
(1)
(i) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office. The AMOC approval letter must specifically reference this AD.
(ii) AMOCs previously approved for AD 2014-17-51 are acceptable for the corresponding requirements of this AD.
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian Emergency Airworthiness Directive CF-2014-27R1, dated August 29, 2014, for related information. This MCAI may be found in the AD docket on the Internet at
(2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (o)(6) and (o)(7) of this AD.
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(3) The following service information was approved for IBR on June 6, 2016.
(i) Bombardier Alert Service Bulletin A604-57-006, Revision 04, dated November 12, 2014, including Appendices 1 and 2, dated September 26, 2013.
(ii) Bombardier Alert Service Bulletin A605-57-004, Revision 04, dated November 12, 2014, including Appendices 1 and 2, dated September 26, 2013.
(4) The following service information was approved for IBR on November 12, 2014 (79 FR 64088, October 28, 2014).
(i) Bombardier Alert Service Bulletin A604-57-006, Revision 02, dated January 22, 2014, including Appendices 1 and 2, dated September 26, 2013.
(ii) Bombardier Alert Service Bulletin A605-57-004, Revision 02, dated January 22, 2014, including Appendices 1 and 2, dated September 26, 2013.
(5) The following service information was approved for IBR on March 6, 2014 (79 FR 9389, February 19, 2014).
(i) Bombardier Alert Service Bulletin A604-57-006, Revision 01, dated September 26, 2013, including Appendices 1 and 2, dated September 26, 2013.
(ii) Bombardier Alert Service Bulletin A605-57-004, Revision 01, dated September 26, 2013, including Appendices 1 and 2, dated September 26, 2013.
(6) For service information identified in this AD, contact Bombardier, Inc., 400 Côte Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-5000; fax 514-855-7401; email
(7) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(8) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are revising Airworthiness Directive (AD) 2015-09-04 for DG Flugzeugbau GmbH Model DG-1000T gliders equipped with a Solo Kleinmotoren Model 2350 C engine. This AD results from mandatory continuing airworthiness information (MCAI) issued by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as engine shaft failure and consequent propeller detachment. We are issuing this AD to require actions to address the unsafe condition on these products.
This AD is effective June 6, 2016.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in the AD as of June 6, 2016.
The Director of the Federal Register approved the incorporation by reference of a certain other publication listed in this AD as of May 26, 2015 (80 FR 25591, May 5, 2015).
You may examine the AD docket on the Internet at
For service information identified in this AD, contact Solo Kleinmotoren GmbH, Postfach 600152, 71050 Sindelfingen, Germany; telephone: +49 7031 301-0; fax: +49 7031 301-136; email:
Jim Rutherford, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone: (816) 329-4165; fax: (816) 329-4090; email:
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to DG Flugzeugbau GmbH Model DG-1000T gliders equipped with a Solo Kleinmotoren Model 2350 C engine. The NPRM was published in the
Since we issued AD 2015-09-04, Amendment 39-18150 (80 FR 25591, May 5, 2015), new service information has been issued that includes procedures for replacement of the excenter axle-pulley assembly and installation of an elastomeric damper element between the propeller and upper pulley. This optional modification will allow resuming engine operation.
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued AD No.: 2015-0052R1, dated November 19, 2015 (referred to after this as “the MCAI”), to correct the above-referenced unsafe condition for the specified products. The MCAI states:
An occurrence of engine shaft failure and consequent propeller detachment was reported on a Solo 2350 C engine.
This condition, if not corrected, could lead to additional cases of release of the propeller from the engine, possibly resulting in damage to the sailplane, or injury to persons on the ground.
To address this unsafe condition, EASA issued Emergency AD 2013-0217-E to prohibit operation of the engine. That AD was later revised to introduce an optional modification, through Solo Kleinmotoren Service Bulletin (SB) 4603-14, to install a modified excenter axle-pulley assembly, allowing to resume operation of the engine.
Since EASA AD 2013-0217R1 was issued, another occurrence of engine shaft failure and propeller detachment was reported on a Solo 2350 C engine which had been modified in accordance with Solo Kleinmotoren SB 4603-14.
Consequently, EASA issued Emergency AD 2015-0052-E, which superseded AD 2013-0217R1, to prohibit operation of all Solo 2350 C engines, including those engines which had been modified in accordance with Solo Kleinmotoren SB 4603-14. That AD also required a one-time inspection of the propeller shaft to detect cracks and the reporting of findings.
Since that AD was issued, Solo Kleinmotoren GmbH developed modification drawing nb. 2031211-V2 available for in service application through Solo SB 4603-17 and DG Flugzeugbau GmbH developed modifications drawing nb. 10 M 067, available for in service application through DG Flugzeugbau Technical Note (TN) 1000/26 which include replacement of excenter axle-pulley assembly and installation of an elastomeric damper element between the propeller and upper pulley.
This AD is revised to introduce optional modifications to allow resuming operation of an engine.
You may examine the MCAI on the Internet at
We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (81 FR 5944, February 4, 2016) or on the determination of the cost to the public.
We reviewed the relevant data and determined that air safety and the public interest require adopting the AD as proposed except for minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM (81 FR 5944, February 4, 2016) for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM (81 FR 5944, February 4, 2016).
We reviewed Solo Kleinmotoren GmbH Anleitung zur Inspektion (English translation: Inspection Instruction), Nr. 4603-1, Ausgabe (English translation: Dated) March 26, 2015; Solo Kleinmotoren GmbH Technische Mitteilung (English translation: Service Bulletin) Nr. 4603-17, Ausgabe (English translation: Dated) July 15, 2015; and DG Flugzeugbau GmbH Technical note No. 1000/26, dated September 23, 2015, with 10M072 titled Propellermontage nach TM 1000-26 (English translation: Propeller assembly TN 1000-26), dated July 14, 2015. Solo Kleinmotoren GmbH Anleitung zur Inspektion (English translation: Inspection Instruction), Nr. 4603-1, Ausgabe (English translation: Dated) March 26, 2015, describes procedures for inspecting the propeller shaft for cracking and reporting the results to the manufacturer. Solo Kleinmotoren GmbH Techniseche Mitteilung (English translation: Service Bulletin) Nr. 4603-17, Ausgabe (English translation: Dated) July 15, 2015, describes procedures for replacement of the excenter axle-pulley assembly. DG Flugzeugbau GmbH Technical note No. 1000/26, dated September 23, 2015, describes procedures for removing the excenter axle-pulley assembly and sending it to Solo Kleinmotoren GmbH for modification with a new rear bearing, axle, and elastomeric damper element. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD will affect 2 products of U.S. registry. We also estimate that it will take about .5 work-hour per product to comply with the basic operational limitation requirement of this AD. The average labor rate is $85 per work-hour.
Based on these figures, we estimate the cost of this portion of this AD on U.S. operators to be $85, or $42.50 per product.
We also estimate that it will take about 1.5 work-hours per product to comply with the basic axle inspection (remove, inspect, and reinstall) requirement of this AD. The average labor rate is $85 per work-hour.
Based on these figures, we estimate the cost of this portion of this AD on U.S. operators to be $255, or $127.50 per product.
We also estimate that it will take about 2 work-hours per product to comply with the optional axle with drive belt pulley unit replacement and engine test run of this AD. The average labor rate is $85 per work-hour. Required parts will cost about $100 per product.
Based on these figures, we estimate the cost of this optional AD action on U.S. operators to be $540, or $270 per product.
We also estimate that it will take about .5 work-hour per product to comply with the removal of the operational limitation requirement after doing the optional replacement of this
Based on these figures, we estimate the cost of this AD action on U.S. operators to be $85, or $42.50 per product.
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW., Washington, DC 20591. ATTN: Information Collection Clearance Officer, AES-200.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
You may examine the AD docket on the Internet at
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) becomes effective June 6, 2016.
This AD replaces AD 2015-09-04, Amendment 39-18150 (80 FR 25591, May 5, 2015) (“AD 2015-09-04”).
This AD applies to DG Flugzeugbau GmbH Model DG-1000T gliders, all serial numbers, that are:
(1) Equipped with a Solo Kleinmotoren Model 2350 C engine; and
(2) Certificated in any category.
Air Transport Association of America (ATA) Code 72: Engine.
This AD was prompted by mandatory continuing airworthiness information (MCAI) issued by the aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as engine shaft failure with consequent propeller detachment. We are issuing this AD to prevent failure of the engine shaft with consequent propeller detachment, which could result in damage to the glider or injury of persons on the ground.
Unless already done, do the following actions:
(1) As of November 25, 2013 (the effective date retained from AD 2013-22-14, Amendment 39-17646 (78 FR 65869, November 4, 2013)), do not operate the engine unless the engine is modified following instructions that are FAA-approved specifically for this AD.
(2) Modification of an engine following the instructions in Solo Kleinmotoren Service Bulletin 4603-14, dated April 28, 2014, is not an acceptable modification to comply with paragraph (f)(1) of this AD.
(3) As of May 26, 2015 (the effective date retained from AD 2015-09-04), place a copy of this AD into the Limitations section of the aircraft flight manual (AFM).
(4) Within the next 30 days after May 26, 2015 (the effective date retained from AD 2015-09-04), do a one-time inspection (magnetic particle or dye penetrant) of the propeller shaft following Solo Kleinmotoren GmbH Anleitung zur Inspektion (English translation: Inspection Instruction), Nr. 4603-1, Ausgabe (English translation: dated) March 26, 2015.
This service information contains German to English translation. The EASA used the English translation in referencing the document. For enforceability purposes, we will refer to the Solo Kleinmotoren service information as it appears on the document.
(5) Within the next 30 days after May 26, 2015 (the effective date retained from AD 2015-09-04), report the results of the inspection required in paragraph (f)(4) of this AD to Solo Kleinmotoren GmbH. Include the serial number of the engine and the operational time since change of the axle in your report. You may find contact information for Solo Kleinmotoren GmbH in paragraph (i)(5) of this AD.
(6) At any time after June 6, 2016 (the effective date of this AD), you may modify the engine following Solo Kleinmotoren GmbH Techniseche Mitteilung (English translation: Service Bulletin) Nr. 4603-17,
This service information contains German to English translation. The EASA used the English translation in referencing the document. For enforceability purposes, we will refer to the Solo Kleinmotoren service information and the DG Flugzeugbau GmbH as it appears on the document.
(7) Before further flight after doing the modification allowed in (f)(6) of this AD, remove the AD placed into the Limitations section of the AFM as required in paragraph (f)(3) of this AD.
The following provisions also apply to this AD:
(1)
(2)
(3)
Refer to MCAI European Aviation Safety Agency (EASA) AD No.: 2015-0052R1, dated November 19, 2015, for related information. You may examine the MCAI on the Internet at
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(3) The following service information was approved for IBR on June 6, 2016.
(i) Solo Kleinmotoren GmbH Techniseche Mitteilung (English translation: Service Bulletin) Nr. 4603-17, Ausgabe (English translation: Dated) July 15, 2015.
This service information contains German to English translation. The EASA used the English translation in referencing the document. For enforceability purposes, we will refer to the Solo Kleinmotoren service information and the DG Flugzeugbau GmbH as it appears on the document.
(ii) DG Flugzeugbau GmbH Technical note No. 1000/26, dated September 23, 2015, with 10M072 titled Propellermontage nach TM 1000-26 (English translation: Propeller assembly TN 1000-26), dated July 14, 2015.
(4) The following service information was approved for IBR on May 26, 2015 (80 FR 25591, May 5, 2015).
(i) Solo Kleinmotoren GmbH Anleitung zur Inspektion (English translation: Inspection Instruction), Nr. 4603-1, Ausgabe (English translation: Dated) March 26, 2015.
This service information contains German to English translation. The EASA used the English translation in referencing the document. For enforceability purposes, we will refer to the Solo Kleinmotoren service information as it appears on the document.
(ii) Reserved.
(5) For service information identified in this AD, contact Solo Kleinmotoren GmbH, Postfach 600152, 71050 Sindelfingen, Germany; telephone: +49 7031 301-0; fax: +49 7031 301-136; email:
(6) You may view this service information at FAA, Small Airplane Directorate, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148. In addition, you can access this service information on the Internet at
(7) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Railroad Retirement Board.
Interim final rule.
As required by Section 701 of the Bipartisan Budget Act of 2015, entitled the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, the Railroad Retirement Board (Board) hereby amends its regulations to provide for adjustments in the minimum and maximum amounts of civil monetary penalties under the Board's jurisdiction. The amendment will increase the amount of penalties to adjust for inflation since the Board last adjusted its penalty amounts, and will provide the formula to be used for required annual adjustments in the penalty amounts.
Effective August 1, 2016. Comments must be received on or before July 1, 2016.
You may submit comments, identified by RIN 3220-AB68, by any of the following methods:
1.
2.
3.
Do not submit the same comments multiple times or by more than one method. Regardless of which method you choose, please state that your comments refer to RIN 3220-AB68.
Marguerite P. Dadabo, Assistant General Counsel, Railroad Retirement Board, 844 North Rush Street, Chicago, IL 60611-2092, (312) 751-4945, TTD (312) 751-4701.
Section 701 of the Bipartisan Budget Act of 2015, Public Law 114-74 (Nov. 2, 2015), entitled the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act), amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note) (Inflation Adjustment Act) to require agencies to publish regulations adjusting the amount of civil monetary penalties provided by law within the jurisdiction of the agency not later than July 1, 2016. The penalties authorized by the Program Fraud Civil Remedies Act, 31 U.S.C. 3801
This interim final rule is being issued without prior public notice or opportunity for public comments. The 2015 Act's amendments to the Inflation Adjustment Act require the agency to adjust penalties initially through an interim final rulemaking, which does not require the agency to complete a notice and comment process prior to promulgating the interim final rule. The amendments also explicitly require the agency to make subsequent annual adjustments notwithstanding 5 U.S.C. 553 (the section of the Administrative Procedure Act that normally requires agencies to engage in notice and comment). Additionally, the formula used for adjusting the amount of civil penalties is given by statute, with no discretion provided to the Board regarding the substance of the adjustments. The Board is charged only with performing ministerial computations to determine the amount of adjustment to the civil penalties due to increases in the Consumer Price Index for all Urban Consumers (CPI-U).
The Board last adjusted the civil penalties under its jurisdiction effective October 23, 1996, pursuant to the Inflation Adjustment Act, when the maximum penalty under the PFCRA was adjusted from $5,000 to $5,500 and the minimum and maximum penalties under 31 U.S.C. 3729 were adjusted from $5,000 to $5,500 and from $10,000 to $11,000, respectively. While the formula used to calculate these adjustments initially yielded higher final penalty amounts, the Debt Collection Improvement Act of 1996, Public Law 104-134, limited the amount of these previous adjustments to no more than 10 percent of the penalty amount or range, as appropriate. Therefore, the penalties were increased by the statutory maximum of 10 percent. Prior to the October 23, 1996 adjustment, the Board last set or adjusted these penalty levels in 1986.
For the first adjustment made in accordance with the 2015 Act, the amount of the adjustment is calculated based on the percent change between the CPI-U for October of the last year in which penalties were previously adjusted (not including any adjustment made pursuant to the Inflation Adjustment Act before November 2, 2015), and the CPI-U for October 2015. The 10 percent cap on adjustments imposed by the Debt Collection Improvement Act of 1996 has been eliminated by the 2015 Act. Instead, the 2015 Act imposes a cap on the amount of this initial adjustment, such that the amount of the increase may not exceed 150 percent of the pre-adjustment penalty amount or range. As a result, the total penalty amount or range after the initial adjustment under the 2015 Act may not exceed 250 percent of the pre-adjustment penalty amount or range.
For purposes of the initial adjustment under the 2015 Act, the Board last set or adjusted the amount of civil penalties in 1986. The 1996 adjustment must be disregarded for these calculations because that adjustment was made pursuant to the Inflation Adjustment Act and subject to the 10 percent cap imposed by the Debt Collection Improvement Act of 1996. Between October 1986 and October 2015, the CPI-U has increased by 215.628 percent. The post-adjustment penalty amount or range is obtained by multiplying the pre-adjustment penalty amount or range by the percent change in the CPI-U over the relevant time period, and rounding to the nearest dollar. Therefore, the new, post-adjustment maximum penalty under the PFCRA is $5,000 × 2.15628 = $10,781.40, which rounds to $10,781. The new, post-adjustment minimum penalty under 31 U.S.C. 3729 is $5,000 × 2.15628 = $10,781.40, which rounds to $10,781. The new, post-adjustment maximum penalty under 31 U.S.C. 3729 is $10,000 × 2.15628 = $21,562.80, which rounds to $21,563. The new, post-adjustment penalties are less than 250 percent of the pre-adjustment penalties, so the limitation on the amount of the adjustment is not implicated. Therefore, the maximum penalty under the PFRCA for claims or statements made after August 1, 2016 will be $10,781, and the minimum and maximum penalties for false claims under 31 U.S.C. 3729 will be $10,781 and $21,563 respectively.
The 2015 Act also requires agencies to make annual adjustments to civil penalty amounts no later than January 15 of each year following the initial adjustment described above. The 2015 Act requires that these subsequent annual adjustments shall be made “notwithstanding section 553 of title 5, United States Code.” As noted earlier, this provision in the 2015 Act eliminates the requirement for public notice or opportunity for public comment prior to the publication of the final adjustment.
For subsequent adjustments made in accordance with the 2015 Act, the amount of the adjustment is based on the percent increase between the CPI-U for the month of October preceding the date of the adjustment and the CPI-U for the October one year prior to the October immediately preceding the date of the adjustment. If there is no increase, there is no adjustment of civil penalties. Therefore, if the Board adjusts penalties in January 2017, the adjustment will be calculated based on the percent change between the CPI-U for October 2016 (the October immediately preceding the date of adjustment) and October 2015 (the October one year prior to October 2016). The Board will publish the amount of these annual inflation adjustments in the
The Board, with the concurrence of the Office of Management and Budget, has determined that this is not a significant regulatory action under Executive Order 12866, as supplemented by Executive Order 13563. Therefore, no regulatory impact analysis is required.
The Board certifies that this rule would not have a significant economic impact on a substantial number of small entities because it affects individuals only. Therefore, a regulatory flexibility analysis is not required under the Regulatory Flexibility Act, as amended.
This interim final rule imposes no reporting or recordkeeping requirements subject to OMB clearance.
Claims, Penalties.
For the reasons set out in the preamble, the Railroad Retirement Board revises title 20, chapter II, subchapter E, part 356 of the Code of Federal Regulations to read as follows:
28 U.S.C. 2461; 31 U.S.C. 3729, 3809.
(a) The Federal Civil Penalties Inflation Adjustment Act, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (28 U.S.C. 2461 note), requires that civil monetary penalties be adjusted on an annual basis by the percentage by which the Consumer Price Index for all Urban Consumers (CPI-U) for the month of October preceding the adjustment exceeds the CPI-U for the month of October of the calendar year prior to the October preceding the adjustment, with final amounts rounded to the nearest dollar. That Act also requires a one-time catch up adjustment in the amount of the percentage by which the CPI-U for October 2015 exceeds the CPI-U for the month of October of the calendar year during which the amount of civil monetary penalty was established or adjusted under a provision of law other than the Federal Civil Penalties Inflation Adjustment Act.
(b) Other than adjustments under the Federal Civil Penalties Inflation Adjustment Act, the Board last established or adjusted civil monetary penalties in 1986. The CPI-U increased by 215.628 percent between October 1986 and October 2015.
(c) Imposition of the increased civil monetary penalties are limited to actions occurring after the effective date of the increases.
(d) The amount of the one-time catch up adjustment may not exceed 150 percent of the penalty amount or range as of November 2, 2015. The ten percent cap on increases imposed by the Debt Collection Improvements Act of 1996 was eliminated in the 2015 amendments to the Federal Civil Penalties Inflation Adjustment Act, and is no longer applicable.
(a) For claims or statements made on or before October 23, 1996, the maximum penalty which may be assessed under part 355 of this chapter is $5,000.
(b) For claims or statements made after October 23, 1996, but before August 1, 2016, the maximum penalty which may be assessed under part 355 of this chapter is $5,500.
(c) For claims or statements made on or after August 1, 2016, but before January 1, 2017, the maximum penalty which may be assessed under part 355 of this chapter is $10,781.
(d) For claims or statements made on or after January 1, 2017, the maximum penalty which may be assessed under part 355 of this chapter is the larger of:
(1) The amount for the previous calendar year; or
(2) An amount adjusted for inflation, calculated by multiplying the amount for the previous calendar year by the percentage by which the CPI-U for the month of October preceding the current calendar year exceeds the CPI-U for the month of October of the calendar year two years prior to the current calendar year, adding that amount to the amount for the previous calendar year, and rounding the total to the nearest dollar.
(e) Notice of the maximum penalty which may be assessed under part 355 of this chapter for calendar years after 2016 will be published by the Board in the
(a) For claims or statements made on or before October 23, 1996, the minimum penalty which may be assessed under 31 U.S.C. 3729 is $5,000 and the maximum penalty is $10,000.
(b) For claims or statements made after October 23, 1996, but before August 1, 2016, the minimum penalty which may be assessed under 31 U.S.C. 3729 is $5,500 and the maximum penalty is $11,000.
(c) For claims or statements made on or after August 1, 2016, but before January 1, 2017, the minimum penalty which may be assessed under 31 U.S.C. 3729 is $10,781 and the maximum penalty is $21,563.
(d) For claims or statements made on or after January 1, 2017, the minimum and maximum penalty amounts which may be assessed under 31 U.S.C. 3729 is the larger of:
(1) The amount for the previous calendar year; or
(2) An amount adjusted for inflation, calculated by multiplying the amount for the previous calendar year by the percentage by which the CPI-U for the month of October preceding the current calendar year exceeds the CPI-U for the month of October of the calendar year two years prior to the current calendar year, adding that amount to the amount for the previous calendar year, and rounding the total to the nearest dollar.
(e) Notice of the minimum and maximum penalty which may be assessed under 31 U.S.C. 3729 for calendar years after 2016 will be published by the Board in the
By Authority of the Board.
Coast Guard, DHS.
Notice of deviation from drawbridge regulation; modification.
The Coast Guard has modified a temporary deviation from the operating schedule that governs the Loop Parkway Bridge, mile 0.7, across Long Creek, and the Meadowbrook State Parkway Bridge, mile 12.8, across Sloop Channel, both at Hempstead, New York. This modified deviation is necessary to facilitate the Dee Snider's Motorcycle Ride to Fight Hunger on Long Island.
This modified deviation is effective from 11 a.m. to 1 p.m. on October 2, 2016.
The docket for this modified deviation, [USCG-2016-0139] is available at
If you have questions on this temporary deviation, call or email Ms. Judy K. Leung-Yee, Project Officer, First Coast Guard District, telephone (212) 514-4330, email
On February 29, 2016, the Coast Guard published a temporary deviation entitled “Drawbridge Operation Regulation; Long Creek & Sloop Channel, Hempstead, NY” in the
Long Island Cares, Inc. requested and the bridge owner for both bridges, the State of New York Department of Transportation, concurred with this modified temporary deviation from the normal operating schedule to facilitate a public event, the Dee Snider's Motorcycle Ride to Fight Hunger.
The Loop Parkway Bridge, mile 0.7, across Long Creek has a vertical clearance in the closed position of 21 feet at mean high water and 25 feet at mean low water. The existing bridge operating regulations are found at 33 CFR 117.799(f).
The Meadowbrook State Parkway Bridge, mile 12.8, across Sloop Channel has a vertical clearance in the closed position of 22 feet at mean high water and 25 feet at mean low water. The existing bridge operating regulations are found at 33 CFR 117.799(h).
Long Creek and Sloop Channel are transited by commercial fishing and recreational vessel traffic.
Under this modified temporary deviation, the Loop Parkway and the Meadowbrook State Parkway Bridges may remain in the closed position between 11 a.m. and 1 p.m. on October 2, 2016.
Vessels able to pass under the bridge in the closed position may do so at anytime. The bridges will not be able to open for emergencies and there are no immediate alternate routes for vessels to pass.
The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessels can arrange their transits to minimize any impact caused by the temporary deviation.
In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.
Department of Veterans Affairs.
Final rule.
The Department of Veterans Affairs is amending its regulations by making nonsubstantive changes to ensure consistency within its regulations regarding a nomenclature change in the title of a Vocational Rehabilitation and Employment position.
C.J. Riley, Policy Analyst, Vocational Rehabilitation and Employment Service (28), Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 461-9600. (This is not a toll-free telephone number.)
In January 2000, the name of VA's program, Vocational Rehabilitation and Counseling (VR&C), responsible for assisting veterans with service-connected disabilities to obtain and maintain suitable employment and achieve maximum independence in daily living was changed to Vocational Rehabilitation and Employment (VR&E). This change reflects the major goal of the program by focusing on employment. As outlined by VA's Office of Field Operations (OFO) in OFO Letter 20F-11-09, a National Journey-Level Counseling Psychologist (CP)/Vocational Rehabilitation Counselor (VRC) Performance Plan was implemented on December 16, 2003. The performance plan described how the job duties and qualifications for a CP and VRC were the same. As a result, the position description for CP was amended to include the synonymous title of VRC. Since this change, VA has updated several regulations to include this synonymous title. To ensure consistency within the regulations, this final rule amends VA regulations to reflect this nomenclature change in the title for this VR&E position.
VA is also correcting two spelling mistakes. In 38 CFR 21.94(b), VA corrects the spelling of the word “statement.” The current text misspells “statement” as “staement.” In § 21.4232(a)(2)(i), VA corrects the spelling of “Rehabilation” to read “Rehabilitation”. No substantive changes are intended by these amendments.
This final rule concerns only agency organization, procedure, or practice and, therefore, is not subject to the notice and comment provisions of 5 U.S.C. 553(b).
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 12866 (Regulatory Planning and Review) defines a “significant regulatory action” requiring review by the Office of Management and Budget (OMB), unless OMB waives such review, as “any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order.”
The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined, and it has been determined not to be a significant regulatory action under Executive Order
The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-612). This final rule will directly affect only individuals and will not directly affect small entities. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking is exempt from the regulatory flexibility analysis requirements of section 604.
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This final rule will have no such effect on State, local, and tribal governments, or on the private sector.
This final rule contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).
The Catalog of Federal Domestic Assistance number and title for the program affected by this final rule is 64.116, Vocational Rehabilitation for Disabled Veterans.
The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Robert D. Snyder, Chief of Staff, Department of Veterans Affairs, approved this document on April 21, 2016, for publication.
Administrative practice and procedure, Armed forces, Civil rights, Claims, Colleges and universities, Conflict of interests, Education, Employment, Grant programs—education, Grant programs—veterans, Health care, Loan programs—education, Loan programs—veterans, Manpower training programs, Reporting and recordkeeping requirements, Schools, Travel and transportation expenses, Veterans, Vocational education, Vocational rehabilitation.
For the reasons set out in the preamble, the Department of Veterans Affairs amends 38 CFR part 21 as follows:
38 U.S.C. 501(a), chs. 18, 31, and as noted in specific sections.
38 U.S.C. 501(a), 512, 3500-3566, and as noted in specific sections.
10 U.S.C. 2141 note, ch. 1606; 38 U.S.C. 501(a), chs. 30, 32, 33, 34, 35, 36, and as noted in specific sections.
Pub. L. 98-543, 38 U.S.C. 501 and chapter 15, sections specifically cited, unless otherwise noted.
(j) * * *
(10) Vocational Rehabilitation Counselor.
Pub. L. 98-543, sec. 111; 38 U.S.C. 1163; Pub. L. 100-687, sec. 1301, unless otherwise noted.
Environmental Protection Agency (EPA).
Direct final rule.
The Environmental Protection Agency (EPA) is taking direct final action to approve revisions to the Maryland State Implementation Plan (SIP). The SIP revision removes the current SIP approved state board requirements and replaces them with an updated version of the requirements. The new provisions continue to address state board requirements for all the National Ambient Air Quality Standards (NAAQS). The revision is being done because the Maryland legislature revised Maryland's statutory requirements related to state boards and the State wants the most recent version in its SIP. EPA is approving these revisions to state board requirements in accordance with the requirements of the Clean Air Act (CAA).
This rule is effective on July 1, 2016 without further notice, unless EPA receives adverse written comment by June 1, 2016. If EPA receives such comments, it will publish a timely withdrawal of the direct final rule in the
Submit your comments, identified by Docket ID No. EPA-R03-OAR-2016-0127 at
Ruth Knapp, (215) 814-2191, or by email at
Section 128 of the CAA requires SIPs to comply with requirements for state boards. Section 128(a) requires SIPs to contain provisions that: (1) Any board or body which approves permits or enforcement orders under the CAA shall have at least a majority of its members represent the public interest and not derive any significant portion of their income from persons subject to permits or enforcement orders under the CAA; and (2) any potential conflict of interest by members of such board or body or the head of an executive agency with similar powers be adequately disclosed. The requirements of section 128(a)(1) are not applicable to Maryland because it does not have any board or body which approves air quality permits or enforcement orders. The requirements of section 128(a)(2), however, are applicable because the heads of the Maryland Department of the Environment (MDE) and the Maryland Public Service Commission (PSC) or their designees approve permits or enforcement orders.
On February 17, 2016, the State of Maryland submitted a formal revision (#16-03) to its SIP. The SIP revision submittal requests EPA to remove the currently approved state board statutory provisions and replace them in the Maryland SIP with the updated statutory provisions so that the SIP includes the most recent state statutes that are applicable to the section 128 CAA requirements pertaining to state boards.
On December 6, 2013 (78 FR 73442), EPA approved a Maryland SIP revision which addressed the requirements of section 128 of the CAA. The 2013 revision incorporated portions of the Annotated Code of Maryland Title 15 (Public Ethics) into the Maryland SIP. Subsequently, Maryland made revisions to its Annotated Code which included relocating the ethics provisions from Title 15 to Title 5, as well as minor wording changes. Maryland is requesting that EPA remove the previously approved portions of Title 15 from its SIP and replace those provisions with the most recent portions of the Annotated Code of Maryland Title 5 (Maryland Public Ethics Laws) which address CAA section 128 requirements. The Secretary of MDE and the state employees subordinate to that position, as well as state employees at the PSC are subject to the requirements of Title 5.
EPA is removing the previously approved portions of Title 15, including these portions of: Subtitle 1, sections 15-102 and 15-103; and subtitle 6, sections 15-601, 15-602, 15-607, and 15-608. In order to continue to meet the requirements of CAA section 128, EPA is incorporating as requested by Maryland the relevant ethics provisions of Title 5 (Maryland Public Ethics Laws) including portions of: Subtitle 1, sections 5-101, 5-103; Subtitle 2, section 5-208; Subtitle 5, section 5-501; and Subtitle 6, sections 5-601, 5-602, 5-606, 5-607, and 5-608. The State effective date for all these provisions in Title 5 of the Maryland Annotated Code subsections is October 1, 2014.
Section 128(a)(2) requires that each state SIP demonstrate that the head of all boards, bodies or heads of executive agencies which approve CAA permits or enforcement orders disclose any potential conflicts of interest. The Secretary of MDE or his/her designee approves all CAA permits or enforcement orders in Maryland with the exception of pre-construction permits for electric generating stations that receive a Certificate of Public Convenience and Necessity (CPCN) from the PSC. MDE is an executive agency that acts through its Secretary or a delegated subordinate employee. The PSC also acts through its Commissioners or delegated subordinates to approve permits. In the February 17, 2016 SIP revision submittal, Maryland requested removal of outdated provisions of Title 15 of the Annotated Code which address disclosure of conflicts of interest as required by section 128 of the CAA and submitted recently revised provisions of Title 5 of the Annotated Code of Maryland for inclusion into the SIP as required to continue to address
EPA is approving Maryland's SIP revision that removes outdated state board provisions addressing disclosure of conflicts of interest by persons or entities within Maryland who approve permits and enforcement orders with recently revised and currently effective similar statutory provisions also addressing state board requirements for section 128 of the CAA including disclosure of conflicts of interest. EPA is publishing this rule without prior proposal because EPA views this as a noncontroversial amendment and anticipates no adverse comment. However, in the “Proposed Rules” section of today's
In this rulemaking action, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 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. Accordingly, this action merely approves state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this 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
• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 1, 2016. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the proposed rules section of today's
Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
The additions read as follows:
(c) * * *
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes tolerances for residues of Carfentrazone-ethyl in or on multiple commodities which are identified and discussed later in this document. Interregional Research Project Number 4 (IR-4) requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA).
This regulation is effective May 2, 2016. Objections and requests for hearings must be received on or before July 1, 2016, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2015-0030, is available at
Susan Lewis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; main telephone
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at
Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2015-0030 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before July 1, 2016. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2015-0030, by one of the following methods:
•
•
•
In the
The petitioner also proposed to amend the tolerance for banana from 0.20 ppm to 0.10 ppm and to remove the following established tolerances: Vegetable, bulb group 3 at 0.10 ppm; vegetable, fruiting, group 8 at 0.10 ppm; fruit, citrus, group 10 at 0.10 ppm; fruit, pome, group 11 at 0.10 ppm; fruit, stone, group 12 at 0.10 ppm; berry group 13 at 0.10 ppm; borage at 0.10 ppm; grape at 0.10 ppm; caneberry subgroup 13A at 0.10 ppm; nut, tree group 14 at 0.10 ppm; pistachio at 0.10 ppm; pummelo at 0.10 ppm; kiwi fruit at 0.10 ppm; canola at 0.10 ppm; cotton, undelinted seed at 0.20 ppm; crambe, seed at 0.10 ppm; flax, seed at 0.10 ppm; rapeseed, seed at 0.10 ppm; okra at 0.10 ppm; safflower seed at 0.10 ppm; salal at 0.10 ppm; sunflower seed at 0.10 ppm; strawberry at 0.10 ppm; juneberry at 0.10 ppm; lingonberry at 0.10 ppm; mustard, seed at 0.10 ppm; barley bran at 0.80 ppm; barley, flour at 0.80 ppm; corn, field, forage at 0.20 ppm; corn, sweet, forage at 0.20 ppm, corn, sweet, kernel plus cob with husk removed at 0.10 ppm; grain, cereal, forage, fodder and straw group 16, except corn and sorghum; forage at 1.0 ppm; grain, cereal, forage, fodder and straw, group 16, hay at 0.30 ppm; grain, cereal, forage, fodder and straw, group 16, stover at 0.30 ppm; grain, cereal, forage, fodder and straw, group 16, except rice; straw at 0.10 ppm; grain, cereal, group 15 at 0.10 ppm; grain, cereal, stover at 0.80 ppm; grain, cereal, straw at 3.0 ppm; millet, flour at 0.80 ppm; oat, flour at 0.80 ppm; rice, straw at 1.0 ppm; rye, bran at 0.80 ppm; rye, flour at 0.80 ppm; sorghum, forage at 0.20 ppm; sorghum, sweet at 0.10 ppm; wheat, bran at 0.80 ppm; wheat, flour at 0.80 ppm; wheat, germ at 0.80 ppm; wheat, middlings at 0.80 ppm; and wheat, shorts at 0.80 ppm.
In the
Based upon review of the data supporting the petition, EPA has changed some of the levels proposed.
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”
Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for carfentrazone-ethyl including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with carfentrazone-ethyl follows.
EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.
In mammals, protoporphyrinogen oxidase, (PPO) is an important enzyme in heme biosynthesis and its inhibition can lead to toxic effects where heme is utilized (
Subchronic oral toxicity studies in rats, mice, and dogs demonstrated that the primary effects were on hematopoietic system (decreased mean corpuscular hemoglobin and mean corpuscular volume). There was also increased urinary porphyrin excretion, increased liver weights, and alterations in liver histopathology consisting of: Hepatic pigment deposition, hepatocytomegaly, single cell necrosis, and cell mitosis. Similarly, chronic toxicity studies in rats and dogs demonstrated increased urinary porphyrin excretion. Chronic studies in rats and mice found liver histopathology (pigment deposits) and fluorescence microscopy of liver sections revealed red fluorescent granules consistent with porphyrin deposits. There were no indicators of targeted effects on the immune system. The results of the acute neurotoxicity study indicated clinical signs (
There was no evidence of increased susceptibility in prenatal developmental toxicity studies (rats and rabbits) or the multigenerational reproductive toxicity study in rats. Fetal effects in the rat developmental study (increase in litter incidence of wavy and thickened ribs) and offspring effects in the rat reproduction toxicity study (decreased pup body weights) were seen at or above doses eliciting blood and liver effects in maternal/parental animals, effects that are consistent with those observed in the hazard database. No developmental effects were seen in the rabbits.
Carfentrazone-ethyl has been classified as “not likely to be carcinogenic” based on the lack of evidence for carcinogenicity in mice and rats; therefore, a quantitative cancer risk assessment was not conducted.
Specific information on the studies received and the nature of the adverse effects caused by carfentrazone-ethyl as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at
Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see
A summary of the toxicological endpoints for carfentrazone-ethyl used for human risk assessment is discussed in Unit III.B., of the final rule published in the
All of the toxicological endpoints remain the same except the acute dietary endpoint has been removed. The Agency reevaluated the points of departure and available data. Previously, the acute neurotoxicity study in rats was used to evaluate acute dietary exposures; however, effects (salivation and decreased motor activity) were only seen at the LOAEL of 1000 mg/kg/day which is not considered relevant for human health risk assessment. There were no other effects seen in the database attributable to a single dose. Therefore, the previous acute dietary endpoint is no longer considered valid.
1.
i.
ii.
iii.
iv.
2.
Based on the Tier 1 Rice Model and Pesticide Root Zone Model Ground Water (PRZM GW), the estimated drinking water concentrations (EDWCs) of carfentrazone-ethyl for chronic exposures for non-cancer assessments are estimated to be 86 ppb for surface water and 43.9 ppb for ground water.
Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For chronic dietary risk assessment, the water concentration of value 86 ppb was used to assess the contribution to drinking water.
3.
Carfentrazone-ethyl is currently registered for the following uses that could result in residential exposures: Golf courses, residential lawns, and aquatic areas. EPA assessed residential exposure using the following assumptions: That homeowner handlers wear shorts, short-sleeved shirts, socks, and shoes, and that they complete all tasks associated with the use of a pesticide product including mixing/loading, if needed, as well as the application. Residential handler exposure scenarios for residential lawn applications are considered to be short-term only, due to the infrequent use patterns associated with homeowner products. Therefore, short-term inhalation risk was assessed for residential handlers; however, since no hazard was identified via the dermal route of exposure, a dermal risk assessment was not conducted for residential handlers. Aquatic applications by homeowners are not permitted by the label directions for use, therefore no residential handler exposure from the aquatic application scenario is anticipated.
EPA uses the term “post-application” to describe exposure to individuals that occur as a result of being in an environment that has been previously treated with a pesticide. Carfentrazone- ethyl can be used in many areas that can be frequented by the general population including home lawns, golf courses and aquatic recreational areas such as ponds and lakes that have been treated for removal of aquatic vegetation. As a result, individuals can be exposed by entering these areas if they have been previously treated. Therefore, short-term post-application exposure and risk are also assessed for carfentrazone-ethyl.
The Agency assessed residential handler (adult) exposure for the turf application scenario and adult post-application exposure for the aquatic exposure scenario. The most conservative exposure scenario for adults, the aquatic exposure scenario-swimmer exposure assessment (combined incidental oral and inhalation), was used to estimate post-application risk. Dermal risks assessments were not conducted because no hazard was identified via the dermal route of exposure. For children, the aquatic exposure scenario-swimmer exposure assessment was used. Since the incidental oral and inhalation PODs are based on the same study, the exposures from these routes were combined. Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at
4.
EPA has not found carfentrazone-ethyl to share a common mechanism of toxicity with any other substances, and carfentrazone-ethyl does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that carfentrazone-ethyl does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at
1.
2.
3.
i. The toxicity database for carfentrazone-ethyl is complete. Since the last risk assessment, an immunotoxicity study has been submitted and the results of the study incorporated into the current assessment.
ii. Although effects were seen in the acute neurotoxicity study (clinical signs and mild decreases in motor activity), concern is low since: (a) The effects are minimal; (b) the effects were seen at the highest doses tested (≥1000 mg/kg); and (c) there is no evidence of neurotoxicity in the rest of the carfentrazone-ethyl database, including the subchronic neurotoxicity study.
iii. There is no evidence that carfentrazone-ethyl results in increased susceptibility in rats or rabbits in the prenatal developmental studies or in young rats in the 2-generation reproduction study.
iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on 100 PCT and tolerance-level residues. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to carfentrazone-ethyl in drinking water. EPA used similarly conservative assumptions to assess postapplication exposure of children as well as incidental oral exposure of toddlers. These assessments will not underestimate the exposure and risks posed by carfentrazone-ethyl.
EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.
1.
2.
3.
Carfentrazone-ethyl is currently registered for uses that could result in short-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with short-term residential exposures to carfentrazone-ethyl.
Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in aggregate MOEs of 7,500 for adults (residential handlers) and 2,100 for children (1-2 years old) (hand-to-mouth exposures). Because EPA's level of concern for carfentrazone-ethyl is a MOE of 100 or below, these MOEs are not of concern.
4.
5.
6.
Adequate enforcement methodology is available to enforce the tolerance expression. This analytical enforcement method involves separate analyses for parent and the metabolite. The parent is analyzed by evaporation and reconstitution of the sample prior to analysis by liquid chromatography/mass spectrometry/gas chromatography/electron capture detection (LC/MS/MS GC/ECD). The metabolite is refluxed in the presence of acid and cleaned up with solid phase extraction prior to analysis by LC/MS/MS.
The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address:
In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.
The Codex has not established a MRL for carfentrazone-ethyl for these crops.
The Agency is revising the petitioned-for tolerance requests for asparagus, peppermint, and spearmint from the proposed 0.25 ppm to 0.10 ppm. The residue field trials for these commodities resulted in residues that are less than 0.05 ppm, the limit of quantitation (LOQ). Using the Organization for Economic Co-operation and Development (OECD) tolerance-calculation procedures, the Agency modified the requested tolerance levels from 0.25 ppm to 0.10 ppm. In an effort to not create a potential trade irritant, the Agency also determined that the requested tolerance amendment in or on oilseed subgroup 20 at 0.20 ppm should be established on the separate subgroups for rapeseed subgroup 20A and sunflower subgroup 20B at 0.10 ppm to align with the MRLs for rapeseed and sunflower at 0.10 ppm in Canada and establish a cottonseed subgroup 20C at 0.20 ppm. Coconut will be removed and superseded by nut, tree, group 14-12. EPA also determined that the tolerance for teff straw should be 3.0 ppm based on available residue data.
Further, on November 20, 2015, the
Therefore, tolerances are established for residues of carfentrazone-ethyl, (ethyl-alpha-2-dichloro-5-[4-(difluoromethyl)-4,5-dihydro-3-methyl-5-oxo-1H-1,2,4-triazol-1-yl]-4-fluorobenzenepropanoate) and the metabolite carfentrazone-ethyl chloropropionic acid (a, 2-dichloro-5-[4-(difluoromethyl)-4,5-dihydro-3-methyl-5-oxo-1H-1,2 ,4-triazol-1-yl]-4-fluorobenzenepropanoic acid), in or on the raw agricultural commodity artichoke, globe 0.10 ppm; asparagus at 0.10 ppm; banana at 0.10 ppm; berry, low growing, subgroup 13-07G at 0.10 ppm; bushberry, subgroup 13-07B at 0.10 ppm; caneberry subgroup 13-07A at 0.10 ppm; cottonseed subgroup 20C at 0.20 ppm; fruit, citrus, group 10-10 at 0.10 ppm; fruit, pome, group 11-10 at 0.10 ppm; fruit, small, vine climbing, subgroup 13-07F, except Fuzzy kiwifruit at 0.10 ppm; fruit, stone, group 12-12 at 0.10 ppm; grain, cereal, group 16, forage at 1.0 ppm; grain, cereal, group 16, hay at 0.30 ppm; grain, cereal, group 16, stover at 0.80 ppm; grain, cereal, group 16, straw at 3.0 ppm; nut, tree, group 14-12 at 0.10 ppm; peppermint, tops at 0.10 ppm; psyllium, seed at 0.10 ppm; quinoa, grain at 0.10 ppm; rapeseed subgroup 20A at 0.10 ppm; spearmint, tops at 0.10 ppm; sunflower subgroup 20B at 0.10 ppm; teff, forage at 1.0 ppm; teff, grain at 0.25 ppm; teff, hay at 0.30 ppm; teff, straw at 3.0 ppm; vegetable, bulb, group 3-07 at 0.10 ppm; and vegetable, fruiting, group 8-10 at 0.10 ppm.
Additionally, tolerances are removed, for barley, bran at .80 ppm; barley, flour at 0.80 ppm; berry group 13 at 0.10 ppm; borage at 0.10 ppm; canola at 0.10 ppm; coconut at 0.10 ppm; corn, field, forage at 0.20 ppm; corn, sweet, forage at 0.20 ppm; corn, sweet, kernel plus cob with husk removed at 0.10 ppm; cotton, undelinted seed at 0.20 ppm; crambe, seed at 0.10 ppm; flax, seed at 0.10 ppm; fruit, citrus, group 10 at 0.10 ppm; fruit, pome, group 11 at 0.10 ppm; fruit, stone, group 12 at 0.10 ppm; grain, cereal, forage, fodder and straw group 16, except corn and sorghum, forage at 1.0 ppm; grain, cereal, forage, fodder and straw group 16, hay at 0.30 ppm; grain, cereal, forage, fodder and straw group 16, stover at 0.30 ppm; grain, cereal, forage, fodder and straw, group 16 except rice, straw at 0.10 ppm; grain, cereal, group 15 at 0.10 ppm; grain, cereal, stover at 0.80 ppm; grain, cereal, straw at 3.0 ppm; grape at 0.10 ppm; juneberry at 0.10 ppm; lingonberry at 0.10 ppm; millet, flour at .80 ppm; mustard, seed at 0.10 ppm; nut, tree, group 14 at 0.10 ppm; oat, flour at 0.80 ppm; okra at 0.10; pistachio at 0.10 ppm; pummelo at 0.10 ppm; rapeseed, seed at 0.10 ppm; rice, hulls at 3.5 ppm; rye, bran at 0.80 ppm; rye, flour at 0.80 ppm; safflower, seed at 0.10 ppm; salal at 0.10 ppm; sorghum, forage at 0.20 ppm; sorghum, sweet at 0.10 ppm; strawberry at 0.10 ppm; sunflower, seed at 0.10 ppm; vegetable, bulb, group 3 at 0.10 ppm; vegetable, fruiting, group 8 at 0.10 ppm; wheat, bran at 0.80 ppm; wheat, flour at 0.80 ppm; wheat, germ at 0.80 ppm; wheat middlings at 0.80 ppm; and wheat, shorts at 0.80 ppm.
This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, 40 CFR chapter I is amended as follows:
21 U.S.C. 321(q), 346a and 371.
(a) * * *
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes an exemption from the requirement of a tolerance for residues of propanamide, 2-hydroxy-
This regulation is effective May 2, 2016. Objections and requests for hearings must be received on or before July 1, 2016, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2015-0524, is available at
Susan Lewis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at
Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2015-0524 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before July 1, 2016. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2015-0524, by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
In the
Based upon review of the data supporting the petition, EPA has limited the maximum concentration of propanamide, 2-hydroxy-
Inert ingredients are all ingredients that are not active ingredients as defined in 40 CFR 153.125 and include, but are not limited to, the following types of ingredients (except when they have a pesticidal efficacy of their own): Solvents such as alcohols and hydrocarbons; surfactants such as polyoxyethylene polymers and fatty acids; carriers such as clay and diatomaceous earth; thickeners such as carrageenan and modified cellulose; wetting, spreading, and dispersing agents; propellants in aerosol dispensers; microencapsulating agents; and emulsifiers. The term “inert” is not intended to imply nontoxicity; the ingredient may or may not be chemically active. Generally, EPA has exempted inert ingredients from the requirement of a tolerance based on the low toxicity of the individual inert ingredients.
Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will
EPA establishes exemptions from the requirement of a tolerance only in those cases where it can be clearly demonstrated that the risks from aggregate exposure to pesticide chemical residues under reasonably foreseeable circumstances will pose no appreciable risks to human health. In order to determine the risks from aggregate exposure to pesticide inert ingredients, the Agency considers the toxicity of the inert in conjunction with possible exposure to residues of the inert ingredient through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. If EPA is able to determine that a finite tolerance is not necessary to ensure that there is a reasonable certainty that no harm will result from aggregate exposure to the inert ingredient, an exemption from the requirement of a tolerance may be established.
Consistent with FFDCA section 408(c)(2)(A), and the factors specified in FFDCA section 408(c)(2)(B), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for propanamide, 2-hydroxy-
EPA has evaluated the available toxicity data and considered their validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Specific information on the studies received and the nature of the adverse effects caused by propanamide, 2-hydroxy-
Propanamide, 2-hydroxy-
The toxicity studies summarized below were all conducted with propanamide, 2-hydroxy-
In rats, 90 days of oral exposure to propanamide, 2-hydroxy-
A developmental toxicity study in rats showed no maternal toxicity at 500 mg/kg/day, the highest dose tested. Quantitative fetal susceptibility was observed as reduced body weight in pups at 500 mg/kg/day. The developmental NOAEL was 200 mg/kg/day.
Propanamide, 2-hydroxy-
Propanamide, 2-hydroxy-
Immunotoxicity studies for propanamide, 2-hydroxy-
Chronic studies with propanamide, 2-hydroxy-
Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see
An acute effect was not found in the database therefore an acute dietary assessment is not necessary. The chronic reference dose (cRfD) as well as the toxicity endpoint applicable to all exposure scenarios was based on the 12-month chronic toxicity study in rats. In this study, the NOAEL was 100 mg/kg/day based on reduced bodyweights at 300 mg/kg/day, the LOAEL. This represents the lowest NOAEL in the most sensitive species in the toxicity database. The standard uncertainty factors were applied to account for interspecies (10x) and intraspecies (10x) variations. The Food Quality Protection
1.
Dietary exposure (food and drinking water) to propanamide, 2-hydroxy-
2.
3.
Propanamide, 2-hydroxy-
4.
EPA has not found propanamide, 2-hydroxy-
Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the FQPA SF. In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.
The toxicity database for propanamide, 2-hydroxy-
EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.
1.
2.
3.
Propanamide, 2-hydroxy-
4.
Propanamide, 2-hydroxy-
5.
6.
An analytical method is not required for enforcement purposes since the Agency is not establishing a numerical tolerance for residues of propanamide, 2-hydroxy-
Based upon an evaluation of the data included in the petition, EPA is establishing an exemption from the requirement of a tolerance for residues of propanamide, 2-hydroxy-
Therefore, an exemption from the requirement of a tolerance is established under 40 CFR 180.910 for residues of propanamide, 2-hydroxy-
This action establishes exemptions to the requirement for a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the exemptions in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, 40 CFR chapter I is amended as follows:
21 U.S.C. 321(q), 346a and 371.
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes tolerances for residues of abamectin in or on multiple commodities which are identified and discussed later in this document. Interregional Research Project Number 4 (IR-4), Syngenta Crop Protection, and Y-TEX Corporation requested these tolerances in four separate petitions under the Federal Food, Drug, and Cosmetic Act (FFDCA).
This regulation is effective May 2, 2016. Objections and requests for hearings must be received on or before July 1, 2016, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2013-0428, is available at
Susan Lewis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at
Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2013-0428 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before July 1, 2016. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2013-0428, by one of the following methods:
•
•
•
In the
In the
In the
Based upon review of the data supporting the petitions, EPA has modified the level at which tolerances are being established for some commodities. The reasons for these changes are explained in Unit IV.C.
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue . . . .”
Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for abamectin including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with abamectin follows.
EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.
Abamectin is a mixture of avermectin B
Since the last time the EPA assessed abamectin (
Available toxicity data show that, with single dose or repeated dose administration, the primary target organ of abamectin is the nervous system, and that decreased body weight is also one of the most frequent findings. Neurotoxicity (including tremors, mydriasis, ataxia, and death) was seen in mice, dogs, and rats. Developmental effects such as cleft palate were reported in rabbits. Abamectin was shown to bind to the gamma aminobutyric acid (GABA) receptors, and this interaction was believed to result in neurotoxicity. The GABA receptor interaction also plays a role in development; cleft palate findings may reflect the interaction of abamectin on the GABA receptor. Generally the finding of cleft palate was seen at higher dose levels than those for neurotoxicity.
Integral to the dose response assessment in mammals for this class of compounds is P-glycoprotein (P-gp). P-gp is a member of adenosine triphosphate (ATP) binding cassette transporter proteins, which reside in the plasma membrane and function as a transmembrane efflux pump, moving
Similarly, the CF-1 mouse is also uniquely sensitive to the neurotoxic effects of abamectin and its derivative, emamectin. Some CF-1 mice have a polymorphism for the gene encoding P-gp and are either devoid (homozygous) or have diminished (heterozygous) level of P-gp. The Agency does not consider the results of studies with CF-1 mice to be relevant for human health risk assessment because there is a lack of convincing evidence from the literature on human polymorphism of human multidrug resistance (
Therefore, the Agency is using results from toxicological studies conducted in the species (rats, CD-1 mice, rabbits, and dogs) that do not have diminished P-gp function for selecting toxicity endpoints and points of departure for risk assessment. Among the test animals with fully functional P-gp, the beagle dog is the most sensitive species.
For various durations of treatment (subchronic (12- and 18-weeks) and chronic oral toxicity studies in dogs), clinical signs [tremors and mydriasis (decreased pupillary light response)] of neurotoxicity were observed in the at the lowest observed adverse effect level (LOAEL) of 0.5 milligram/kilogram (mg/kg); the no observed adverse effect level (NOAEL) was 0.25 mg/kg. Tremors and mydriasis were observed as early as the first week of exposure. The Agency assumes that these clinical signs could result from a single dose for the following reasons:
1. Kinetic data demonstrates rapid absorption/excretion. With oral dosing in rats and mice, abamectin was absorbed rapidly, and maximum concentration in blood was achieved within 4-8 hours after administration. It was rapidly eliminated from the body, almost exclusively in the feces, and did not accumulate in the body after repeated exposure.
2. In an acute neurotoxicity study (ACN) in rat (range finding and main studies), clinical signs of neurotoxicity such as reduced foot splay reflex, ataxia, tremors, and mydriasis (decreased pupillary light response) were observed from a single dose. Most of the effects observed in the rat ACN were consistent with those seen in the subchronic and chronic dog studies.
3. The neurotoxic effects produced by abamectin in beagle dogs did not progress with time. The effects seen in the subchronic (gavage) and chronic dog studies were similar despite the varied durations of treatment, suggesting the response could be due to each individual exposure rather than to accumulation of abamectin in tissues. Clinical signs such as ataxia and or whole body tremors were reported within 3 hours of the first dose at higher dose levels.
Based on these considerations, 0.25 mg/kg/day was selected as a point of departure for risk assessment for all the exposure scenarios, and the toxicity endpoints were clinical signs of neurotoxicity.
Carcinogenicity studies in rats and mice (CD-1) and mutagenicity studies provide no indication that abamectin is carcinogenic or mutagenic.
Specific information on the studies received and the nature of the adverse effects caused by abamectin as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at
Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see
A summary of the toxicological endpoints for abamectin used for human
1.
i.
Such effects were identified for abamectin. In estimating acute dietary exposure, EPA used food consumption information from the 2003-2008 United States Department of Agriculture (USDA) National Health and Nutrition Examination Survey, What We Eat in America (NHANES/WWEIA). As to residue levels in food, a refined acute dietary exposure assessment was conducted for all proposed and established food uses of abamectin. Anticipated residues derived from field trial data for most plant commodities were used in the acute dietary exposure assessment. Tolerance-level residues were used for poultry and swine livestock commodities. Because cattle may be exposed to residues of abamectin through diet and ear tag, upper-bound anticipated residues were estimated from the maximum values found in cattle feeding studies and dermal magnitude of residue studies. For all other livestock commodities, upper-bound anticipated residues were estimated from secondary residues from consuming treated feed. Empirical and default processing factors and maximum percent crop treated (PCT) estimates were used, as available.
ii.
iii.
iv.
Section 408(b)(2)(F) of FFDCA states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if:
• Condition a: The data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain the pesticide residue.
• Condition b: The exposure estimate does not underestimate exposure for any significant subpopulation group.
• Condition c: Data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area.
The following maximum PCT estimates were used in the acute dietary risk assessment for the following crops that are currently registered for abamectin: Almond: 80%; apple: 30%; apricot: 30%; avocado: 60%; bean, dry: 2.5%; cantaloupe: 45%; celery: 70%; cherry: 20%; cotton: 30%; cucumber: 10%; grape: 35%; grapefruit: 90%; hazelnut: 2.5%; honeydew: 35%; lemon: 55%; lettuce: 45%; nectarine: 20%; onion, bulb: 10%; orange: 70%; peach: 25%; pear: 85%; pecan: 2.5%; pepper: 30%; pistachio: 2.5%; plum/prune: 35%; potato: 20%; pumpkin: 10%; spinach: 45%; squash: 15%; strawberry: 45%; tangerine: 55%; tomato: 25%; walnut: 55%; and watermelon: 15%.
The PCT values that were used to refine the livestock commodities for the acute assessment were based on: Sweet corn (44%) for beef, goat, horse, and sheep commodities; and the food handling establishment uses (5%) for hog and poultry meat and meat byproducts.
The following average PCT estimates were used in the chronic dietary risk assessment for the following crops that are currently registered for abamectin: Almond: 70%; apple: 10%; apricot: 15%; avocado: 35%; bean, dry: 2.5%; cantaloupe: 25%; celery: 45%; cherry: 5%; cotton: 20%; cucumber: 5%; grape: 15%; grapefruit: 70%; hazelnut: 2.5%; honeydew: 20%; lemon: 40%; lettuce: 20%; nectarine: 20%; onion, bulb: 2.5%; orange: 40%; peach: 10%; pear: 70%; pecan: 1%; pepper: 15%; pistachio: 2.5%; plum/prune: 10%; potato: 5%; pumpkin: 5%; spinach: 25%; squash: 5%; strawberry: 30%; tangerine: 35%; tomato: 10%; walnuts: 25%; and watermelons: 5%.
The PCT values that were used to refine the livestock commodities (cattle, goats, horses, and sheep) for the chronic assessment were based on: Cotton (30%), soybean (8%), and sweet corn (38%). The PCT for poultry and hog commodities is based on the food handling establishment PCT since the tolerances for food handling establishment uses result in residues considerably higher than secondary residues from hogs and poultry consuming treated feed. All commodities included for food handling residues were assigned the value of 5%.
In most cases, EPA uses available data from United States Department of Agriculture/National Agricultural Statistics Service (USDA/NASS), proprietary market surveys, and the National Pesticide Use Database for the chemical/crop combination for the most recent 6-7 years. EPA uses an average PCT for chronic dietary risk analysis. The average PCT figure for each existing use is derived by combining available public and private market survey data for that use, averaging across all observations, and rounding to the nearest 5%, except for those situations in which the average PCT is less than one. In those cases, 1% is used as the average PCT and 2.5% is used as the maximum PCT. EPA uses a maximum PCT for acute dietary risk analysis. The maximum PCT figure is the highest observed maximum value reported within the recent 6 years of available public and private market survey data for the existing use and rounded up to the nearest multiple of 5%.
The following maximum PCT estimates were used in the acute dietary risk assessment for the following new uses of abamectin:
Blackberries: 68%; boysenberry: 68%; corn, sweet 57%; loganberry: 68%; raspberries: 68%; soybeans: 11%.
The following average PCT estimates were used in the chronic dietary risk assessment for the following new uses of abamectin:
Blackberries: 56%; boysenberry: 56%; corn, sweet 45%; loganberry: 68%; raspberries: 56%; soybeans: 8%.
EPA estimates of the PCTn of abamectin represents the upper bound of use expected during the pesticide's initial five years of registration; that is, PCTn for abamectin is a threshold of use that EPA is reasonably certain will not be exceeded for each registered use site. The PCTn recommended for use in the chronic dietary assessment is calculated as the average PCT of the market leader or leaders, (
Typically, EPA uses USDA/NASS as the source data because it is publicly available and directly reports values for PCT. When a specific use site is not reported by USDA/NASS, EPA uses proprietary data and calculates the PCT given reported data on acres treated and acres grown. If no data are available, EPA may extrapolate PCTn from other crops, if the production area and pest spectrum are substantially similar.
A retrospective analysis to validate this approach shows few cases where the PCT for the market leaders were exceeded. Further review of these cases identified factors contributing to the exceptionally high use of a new pesticide. To evaluate whether the PCTn for abamectin could be exceeded, EPA considered whether there may be unusually high pest pressure, as indicated in emergency exemption requests for abamectin; the pest spectrum of the new pesticide in comparison with the market leaders and whether the market leaders are well-established for that use; and whether pest resistance issues with past market leaders provide abamectin with significant market potential. Given
The Agency believes that the three conditions discussed in Unit III.C.1.iv. have been met. With respect to Condition a, PCT estimates are derived from Federal and private market survey data, which are reliable and have a valid basis. The Agency is reasonably certain that the percentage of the food treated is not likely to be an underestimation. As to Conditions b and c, regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available reliable information on the regional consumption of food to which abamectin may be applied in a particular area.
2.
Based on the Tier II surface water concentration calculator (SWCC) computer model and Tier I Screening Concentration in Ground Water (SCI-GROW) model and Tier I Pesticide Root Zone Model Ground Water (PRZM GW), the estimated drinking water concentrations (EDWCs) of abamectin for acute exposures are estimated to be 0.76 parts per billion (ppb) for surface water and 0.074 ppb for ground water and for chronic exposures are estimated to be 0.30 ppb for surface water and ≤0.0031 ppb for ground water.
Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model either via point estimates or using residue distribution files.
For acute dietary risk assessment, a drinking water residue distribution file was used to assess the contribution to drinking water.
For chronic dietary risk assessment, the water concentration of value 0.30 ppb was used to assess the contribution to drinking water.
3.
Abamectin is currently registered for the following uses that could result in residential exposures: Homeowner bait and bait station products that include an outdoor granular bait formulation for use on fire ant mounds, and several indoor ready-to-use baits of both dust and gel formulations. In addition, as part of the current request, the registrant has proposed a use on golf course turf.
EPA assessed residential exposure using the following assumptions: For residential handlers, both dermal and inhalation short-term exposure is expected from the currently registered bait and bait station uses. Quantitative exposure/risk assessment considered the following scenarios: Loading/applying granular bait outdoor via (1) push-type spreaders, (2) belly grinders, (3) spoons, (4) hand, and (5) cup or shaker; and (6) applying granular bait indoor by hand (as a surrogate for a ready-to-use dust bait).
Post-application residential exposure for adults and children (1 to <2) is unlikely for the currently registered uses of abamectin. For currently registered outdoor treatments, adults and children are not expected to directly contact fire ant mounds. For currently registered indoor pest control, bait placements are intended to be placed in cracks and crevices where direct contact by adults and children (1 to <2) is unlikely.
However, residential post-application exposure for adults and children (6 to <11 and 11 to <16) is possible for the newly proposed use of abamectin on golf courses. Adults and children (6 to <11 and 11 to <16) performing physical post-application activities on golf course turf may receive dermal exposure to abamectin residues. The scenarios, lifestages, and routes of exposure include: Golfing for adults (dermal), children 11 to <16 years old (dermal), and children 6 to <11 years old (dermal).
Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at
4.
EPA's Office of Pesticide Programs (OPP) has previously developed guidance documents for establishing common mechanism groups (CMGs) (
The Agency has utilized this 2016 screening framework for abamectin and determined that abamectin along with emamectin form a candidate CMG. This group of pesticides is considered a candidate CMG because they share characteristics to support a testable hypothesis for a common mechanism of action. Following this determination, the Agency conducted a screening-level cumulative risk assessment consistent with the 2016 guidance document. This screening assessment indicates that that cumulative dietary and residential aggregate exposures for abamectin and emamectin are below the Agency's levels of concern. No further cumulative evaluation is necessary for abamectin and emamectin.
The Agency's screening-level cumulative analysis can be found at
Additionally, when the Agency issued the notice in the
1.
2.
The rat reproduction toxicity and developmental neurotoxicity studies demonstrated both qualitative and quantitative susceptibility in the pups to the effects of abamectin (decrease pup weights and increased postnatal pup mortality). This observation is consistent with the finding that P-gp is not fully developed in rat pups until postnatal day 28. Therefore, during the period from birth to postnatal day 28, the rat pups are substantially more susceptible to the effects of abamectin than adult rats. However, in humans, P-gp has been detected in the fetus at 22 weeks of pregnancy, and the human newborns have functioning P-gp. Therefore, human infants and children are not expected to have enhanced sensitivity as seen in rat pups.
3.
i. The toxicity database for abamectin is complete.
ii. The proposed mode of action (MOA) is interaction with GABA receptors leading to neurotoxicity. The findings of neurotoxic signs observed in the abamectin database are consistent with the proposed MOA. Signs of neurotoxicity ranging from decreases in foot splay reflex, mydriasis (
iii. As explained in Unit III.D.2 “
iv. There are no residual uncertainties identified in the exposure databases. The chronic and acute dietary food exposure assessment are refined including use of anticipated residues, default processing factors, and percent crop treated; however, these refinements are considered protective because field trials are conducted to represent use conditions leading to the maximum residues in food when the product is used in accordance with the label and do not underestimate exposures. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to abamectin in drinking water. EPA used similarly conservative assumptions to assess post-application exposure of children. These assessments will not underestimate the exposure and risks posed by abamectin.
EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.
1.
2.
3.
Abamectin is currently registered for uses that could result in short-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with short-term residential exposures to abamectin.
Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in aggregate MOEs of 4,400 for adults, 3,600 for children 11 to <16 years old, and 2,100 for children 6 to <11 years old. Because EPA's level of concern for abamectin is
4.
An intermediate-term adverse effect was identified; however, abamectin is not registered for any use patterns that would result in intermediate-term residential exposure. Intermediate-term risk is assessed based on intermediate-term residential exposure plus chronic dietary exposure. Because there is no intermediate-term residential exposure and the acute dietary risk assessment is protective of all exposure durations (since the point of departure is the same for all exposure durations), no further assessment of intermediate-term risk is necessary.
5.
6.
Adequate enforcement methods for abamectin in plant and livestock commodities are available in the Pesticide Analytical Manual, Volume II (PAM II).
In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.
The Codex has not established MRLs for abamectin on sweet corn, soybean, papaya, star apple, black sapote, sapodilla, canistel, mamey sapote, guava, feijoa, jaboticaba, wax jambu, starfruit, passionfruit, acerola, lychee, longan, Spanish lime, rambutan, pulasan, pineapple, bean or green onion commodities. Additionally, there are no Codex MRLs for abamectin on the commodities in the caneberry subgroup 13-07A; fruit, small vine climbing, except fuzzy kiwifruit, subgroup 13-07F; or fruit, stone, group 12-12.
The following U.S. tolerances are harmonized with established, related Codex MRLs: Fruit, pome, group 11-10; and nut, tree, group 14-12.
The Codex MRL on citrus is not harmonized with the U.S. tolerance on fruit, citrus, group 10-10, and the Codex MRL on strawberry is not harmonized with the recommended U.S. tolerance on berry, low-growing, subgroup 13-07G. Residue data underlying these U.S. tolerances supports tolerances that are higher than the established Codex MRLs on these related commodities.
Codex MRLs for abamectin on fruiting vegetable commodities are not harmonized with the U.S. tolerance on vegetable, fruiting, group 8-10. The residue data underlying the U.S. fruiting vegetable tolerance resulted in a tolerance that is higher than the established Codex MRL on sweet peppers. Codex has also established a separate tolerance on dried chili pepper that is higher than the U.S. fruiting vegetable tolerance.
There are some Codex MRLs on livestock commodities, but none of the Codex MRLs are set at the same level as the tolerance levels EPA is establishing today; however, the U.S. cannot harmonize with the Codex MRLs on livestock commodities since the Codex MRLs reflect different uses (
Although not requested, EPA is establishing a tolerance of 0.40 ppm for “grain, aspirated grain fractions” since aspirated grain fractions are associated with soybeans. The recommended tolerance of 0.40 ppm for “grain, aspirated grain fractions” is based on residues of <0.006 ppm in soybean seed and a concentration factor of 59X in aspirated grain fractions.
EPA is also increasing some of the established livestock tolerances based on a new dietary burden calculation that includes the proposed uses on soybeans and sweet corn as well as a proposed use for ear tags for lactating dairy cattle. Because of these calculations, EPA is increasing the established tolerances on cattle fat from 0.03 to 0.05 ppm; cattle meat byproducts from 0.06 to 0.09 ppm; fat of goat, horse and sheep from 0.01 to 0.03 ppm; meat byproducts of goat, horse, and sheep from 0.02 to 0.04 ppm; and milk from 0.005 to 0.015 ppm.
Finally, EPA is not establishing tolerances for “corn, field, sweet, and pop; corn, field and pop, forage; corn, field and pop, grain; corn, field and pop, stover” because the petitioner withdrew those tolerance requests.
Therefore, tolerances are established for residues of abamectin in or on acerola at 0.015 ppm; bean at 0.015 ppm; berry, low growing, subgroup 13-07G at 0.05 ppm; black sapote at 0.40 ppm; caneberry subgroup 13-07A at 0.20 ppm; canistel at 0.40 ppm; corn, sweet, forage at 0.20 ppm; corn, sweet, kernel plus cob with husk removed at 0.01 ppm; corn, sweet, stover at 0.50 ppm; feijoa at 0.015 ppm; fruit, citrus, group 10-10 at 0.02 ppm; fruit, pome, group 11-10 at 0.02 ppm; fruit, small, vine climbing, except fuzzy kiwifruit, subgroup 13-07F 0.02 ppm; fruit, stone, group 12-12 at 0.09 ppm; grain, aspirated grain fractions at 0.40 ppm; guava at 0.015 ppm; jaboticaba at 0.015 ppm; longan at 0.01 ppm; lychee at 0.01 ppm; mamey sapote at 0.40 ppm; nut,
In addition, EPA is increasing the established tolerances on cattle, fat from 0.03 to 0.05 ppm; cattle, meat byproducts from 0.06 to 0.09 ppm; fat of goat, horse, and sheep from 0.01 to 0.03 ppm; meat byproducts of goat, horse, and sheep from 0.02 to 0.04 ppm; and milk from 0.005 to 0.015 ppm.
And lastly EPA is removing the following tolerances as unnecessary due to the establishment of the aforementioned tolerances: Apple at 0.02 ppm; bean, dry, seed at 0.01 ppm; citrus at 0.02 ppm; fruit, stone, group 12 at 0.09 ppm; grape at 0.02 ppm; nut, tree, group 14 at 0.01 ppm; pear at 0.02 ppm; pistachio at 0.01 ppm; strawberry at 0.05 ppm; and vegetable, fruiting, group 8 at 0.020 ppm.
This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerances in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, 40 CFR chapter I is amended as follows:
21 U.S.C. 321(q), 346a and 371.
(a) * * *
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule; and a temporary rule for emergency action.
Through this final rule, NMFS establishes fishery management measures for the 2016 ocean salmon fisheries off Washington, Oregon, and California and the 2017 salmon seasons opening earlier than May 1, 2017. The temporary rule for emergency action (emergency rule), under the Magnuson-Stevens Fishery Conservation and Management Act (MSA), implements the 2016 annual management measures for the West Coast ocean salmon fisheries for the area from the U.S./Canada border to Cape Falcon, OR from May 1, 2016, through October 28, 2016. The emergency rule is required because preseason forecast abundance of several stocks of coho from the Washington coast and Puget Sound is below the stock-specific spawning escapement goals (
Final rule covering fisheries south of Cape Falcon, Oregon, is effective from 0001 hours Pacific Daylight Time, May 1, 2016, until the effective date of the 2017 management measures, which will be published in the
The documents cited in this document are available on the Pacific Fishery Management Council's (Council's) Web site (
Peggy Mundy at 206-526-4323.
The ocean salmon fisheries in the EEZ off Washington, Oregon, and California are managed under a “framework” FMP. Regulations at 50 CFR part 660, subpart H, provide the mechanism for making preseason and inseason adjustments to the management measures, within limits set by the FMP, by notification in the
The management measures for the 2016 and pre-May 2017 ocean salmon fisheries that are implemented in this final rule were recommended by the Council at its April 9 to 14, 2016, meeting.
The Council announced its annual preseason management process for the 2016 ocean salmon fisheries in the
In accordance with the FMP, the Council's Salmon Technical Team (STT) and staff economist prepared four reports for the Council, its advisors, and the public. All four reports were made available on the Council's Web site upon their completion. The first of the reports, “Review of 2015 Ocean Salmon Fisheries,” was prepared in February when the scientific information necessary for crafting management measures for the 2016 and pre-May 2017 ocean salmon fisheries first became available. The first report summarizes biological and socio-economic data for the 2015 ocean salmon fisheries and assesses how well the Council's 2015 management objectives were met. The second report, “Preseason Report I Stock Abundance Analysis and Environmental Assessment Part 1 for 2016 Ocean Salmon Fishery Regulations” (PRE I), provides the 2016 salmon stock abundance projections and analyzes the impacts on the stocks and Council management goals if the 2015 regulations and regulatory procedures were applied to the projected 2016 stock abundances. The completion of PRE I is the initial step in developing and evaluating the full suite of preseason alternatives.
Following completion of the first two reports, the Council met in Sacramento, CA, from March 9 to 14, 2016, to develop 2016 management alternatives for proposal to the public. The Council proposed three alternatives for commercial and recreational fisheries management for analysis and public comment. These alternatives consisted of various combinations of management measures designed to protect weak stocks of coho and Chinook salmon, and to provide for ocean harvests of more abundant stocks. After the March Council meeting, the Council's STT and staff economist prepared a third report, “Preseason Report II Proposed Alternatives and Environmental Assessment Part 2 for 2016 Ocean Salmon Fishery Regulations” (PRE II), which analyzes the effects of the proposed 2016 management alternatives.
Public hearings, sponsored by the Council, to receive testimony on the proposed alternatives were held on March 28, 2016, in Westport, WA, and Coos Bay, OR; and on March 29, 2016, in Fort Bragg, CA. The States of
The Council met from April 9 to 14, 2016, in Vancouver, WA, to adopt its final 2016 salmon management recommendations. Following the April Council meeting, the Council's STT and staff economist prepared a fourth report, “Preseason Report III Analysis of Council-Adopted Management Measures for 2016 Ocean Salmon Fisheries” (PRE III), which analyzes the environmental and socio-economic effects of the Council's final recommendations. After the Council took final action on the annual ocean salmon specifications in April, it transmitted the recommended management measures to NMFS, published them in its newsletter, and also posted them on the Council Web site (
The EA for this action comprises the Council's documents described above (PRE I, PRE II, and PRE III), providing analysis of environmental and socioeconomic effects under NEPA. The EA and its related Finding of No Significant Impact (FONSI) are posted on the NMFS West Coast Region Web site (
The need to meet Endangered Species Act (ESA) consultation requirements and obligations of the Pacific Salmon Treaty (PST) between the U.S. and Canada for several stocks, as well as conservation objectives detailed in the FMP, will shape salmon fisheries in 2016, and several stocks will constrain fishing in 2016.
Fisheries south of Cape Falcon, OR, are limited in 2016 primarily by the low abundance forecast of Klamath River fall Chinook salmon (KRFC) and concern for the status of ESA-listed Sacramento River winter Chinook salmon (SRWC). Fisheries north of Cape Falcon are limited primarily by the extremely low abundance forecasts for several stocks of coho salmon, primarily from the Washington coast and Puget Sound. At the start of the preseason planning process for the 2016 management season, NMFS provided a letter to the Council, dated March 7, 2016, summarizing limits to impacts on ESA-listed species for 2016, based on existing biological opinions and 2016 abundance information, as required by the Salmon FMP. The limitations imposed in order to protect these stocks are described below. The alternatives and the Council's recommended management measures for 2015 were designed to avoid exceeding these limitations.
Annual Catch Limits (ACLs) are set for two Chinook salmon stocks, Sacramento River fall Chinook (SRFC) and KRFC, and one coho stock, Willapa Bay natural coho. The Chinook salmon stocks are indicator stocks for the Central Valley Fall Chinook complex and the Southern Oregon/Northern California Chinook complex, respectively. The Far North Migrating Coastal Chinook complex includes a group of Chinook salmon stocks that are caught primarily in fisheries north of Cape Falcon, Oregon, and other fisheries that occur north of the U.S./Canada border. No ACL is set for these stocks because they are managed according to the PST with Canada. Other Chinook salmon stocks caught in fisheries north of Cape Falcon are ESA-listed or hatchery produced, and are managed consistent with ESA consultations or hatchery goals. Willapa Bay natural coho is the only coho stock for which an ACL is set, as the other coho stocks in the FMP are either ESA-listed,
ACLs for salmon stocks are escapement-based, which means they establish a number of adults that must escape the fisheries to return to the spawning grounds. ACLs are set based on the annual abundance projection and a fishing rate reduced to account for scientific uncertainty. The abundance forecasts for 2016 are described in more detail below in the “Management Measures for 2016 Fisheries” section of this final rule. For SRFC in 2016, the overfishing limit (OFL) is S
As explained in more detail above under “Stocks of Concern,” fisheries north and south of Cape Falcon, are constrained by impact limits necessary to protect ESA-listed salmon stocks including SRWC and Puget Sound Chinook, as well as KRFC, Queets, Grays Harbor, Hoh, Quillayute fall, Skagit, Stillaguamish, Snohomish and Strait of Juan de Fuca coho which are not ESA-listed. For 2016, projected abundance of the three stocks with ACLs (SRFC, KRFC, and Willapa Bay natural coho), in combination with the constraints for ESA-listed and non-ESA-listed stocks, are expected to result in escapements greater than required to meet the ACLs for all three stocks with defined ACLs.
The Council's final recommendation for the ocean salmon fishing seasons that commence May 1, 2016, deviate from the FMP specifically with regard to not meeting FMP escapement goals for several stocks of coho and in setting the recreational fishery allocations north and south of Leadbetter Point, Oregon. As discussed above, two coastal coho stocks have abundance projections that do not meet FMP conservation objectives for escapement, even without fishing. Two additional coastal coho stocks have abundance forecasts that are extremely close to the FMP conservation objective for escapement. To respond to this circumstance, the Council has recommended fisheries that would prohibit coho retention north of Leadbetter Point, Washington (about 10 miles north of the Columbia River) and would allow only limited fisheries targeting Chinook in that area, well below what might be allowed if coho stocks were healthy. The following stocks will not meet their FMP conservation objectives for escapement, even without fishing impacts:
The preseason forecasts for these stocks are at unprecedented low levels. The Council's Salmon Technical Team (STT) expressed concern that unusually warm ocean temperatures are affecting ocean productivity, leading to adverse impacts to coho stocks. Coastal and Puget Sound Chinook stocks and Columbia River coho stocks do not appear to be affected to the same extent, and are projected to return in harvestable numbers.
The Council considered three alternative fishery management schemes for the fisheries north of Cape Falcon. One alternative would have allowed coho retention north of Leadbetter Point, one alternative would have allowed Chinook fishing only north of Leadbetter Point, with incidental impacts to coho, and one alternative would have closed fisheries north of Leadbetter Point completely. The Council's state and tribal representatives, and industry advisory committee, supported consideration of these three alternatives. The Council's final recommended management measures fall between the second and third alternatives in terms of impacts to coho. These management measures reflect agreement between the State of Washington and coastal treaty tribes on temporary escapement goals for combined ocean fisheries and fisheries landward of the EEZ; the projected impacts of the combined fisheries are managed such that the affected stocks meet these escapement goals. The Council's recommended management measures would allow very limited Chinook fishing north of Leadbetter Point—approximately 50 percent of the Chinook quota for 2015 despite projected Chinook abundance similar to 2015. Retention of coho would be prohibited, thus impacts to coho would be incidental to fishing for Chinook. The Council voted unanimously to adopt these measures, and members spoke at length about the need to conserve coho stocks while mitigating to the extent possible the otherwise severe impacts on coastal communities.
The proposed fisheries have minimal impacts on the affected coho stocks and are not expected to jeopardize the capacity of the fishery to produce maximum sustainable yield on a continuing basis. The FMP defines overfishing and overfished status for these stocks. None would be subject to overfishing under the proposed management measures, in fact the overfishing limits in the FMP are much higher than the expected impact rates (50-60 percent MFMTs as opposed to 1-10 percent projected fishery impacts). All but one of the stocks are expected to avoid “overfished” or “approaching overfished” status with the proposed fisheries. The FMP defines “overfished” status in terms of a three year geometric mean escapement level and whether it is above the minimum stock sized threshold (MSST). Queets, Hoh, and Grays Harbor coho are all expected to have three year geometric mean escapement levels above MSST, when the projected impacts of the Council's recommended fisheries and fisheries landward of the EEZ are taken into account. One stock, Quillayute fall coho, is likely to meet the definition of “overfished” in 2017, but this is the case whether or not there are any fishery impacts. The marginal decreases in the abundance of all four stocks expected from the proposed fisheries (
The temporary rule for emergency action implements the 2016 annual management measures for the West Coast ocean salmon fisheries for the area from the U.S./Canada border to Cape Falcon, OR, for 180 days, from May 1, 2016, through October 28, 2016 (16 U.S.C. 1855(c)).
The Council invited written comments on developing 2016 salmon management measures in their notice
C
The Council, including the NMFS representative, took all of these comments into consideration. The Council's final recommendation generally includes aspects of all three alternatives, while taking into account the best available scientific information and ensuring that fisheries are consistent with ESA consultation standards, ACLs, PST obligations, and tribal fishing rights. These management tools assist the Council in meeting impact limits on weak stocks. The Council adopted alternative III for incidental halibut retention, this alternative provides for more liberal landing limits for halibut than were adopted for 2015 salmon fisheries and April 2016 salmon fisheries (80 FR 25611, May 5, 2015).
The Council's recommended ocean harvest levels and management measures for the 2016 fisheries are designed to apportion the burden of protecting the weak stocks identified and discussed in PRE I equitably among ocean fisheries and to allow maximum harvest of natural and hatchery runs surplus to inside fishery and spawning needs. NMFS finds the Council's recommendations responsive to the goals of the FMP, the requirements of the resource, and the socioeconomic factors affecting resource users. The recommendations are consistent with the requirements of the MSA, U.S. obligations to Indian tribes with federally recognized fishing rights, and U.S. international obligations regarding Pacific salmon. The Council's recommended management measures also comply with NMFS ESA consultation standards and guidance, for those ESA-listed salmon species that may be affected by Council fisheries. Accordingly, NMFS, through this final rule and temporary rule, approves and implements the Council's recommendations.
North of Cape Falcon, 2016 management measures for non-Indian commercial troll and recreational fisheries have greatly reduced quotas for Chinook and coho salmon compared to 2015. This is due to the fact that Washington coast and Puget Sound coho are forecast to have extremely low abundance and conservation measures are being implemented in all salmon fishing sectors north of Cape Falcon to limit impacts on these stocks. North of Cape Falcon in 2016, commercial fisheries will have no retention of coho salmon and recreational fisheries will have no retention of coho salmon north of Leadbetter Point, WA. Chinook harvest north of Cape Falcon will be approximately one half of the 2015 level for both commercial and recreational fisheries. Chinook impacts in Alaskan and Canadian fisheries on salmon stocks originating north of Cape Falcon are expected to increase slightly for Chinook in 2016 compared with 2015; coho impacts are essentially the same. As noted previously, ESA-listed Puget Sound Chinook will not be constraining to this year's fisheries. Impacts to Thompson River coho from Canada and Puget Sound coho will also not be constraining, due to conservation measures in place to limit fishery impacts to Washington coast coho. The Council recommended a provision prohibiting retention of chum salmon in the ocean salmon fisheries north of Cape
Recreational fisheries south of Cape Falcon will be directed primarily at Chinook salmon, with opportunity for coho limited to the area between Cape Falcon and the Oregon/California border. Commercial fisheries south of Cape Falcon will be directed at Chinook and have no coho retention. The projected abundance of SRFC in 2016 is about half of the 2015 projection. Under the management measures in this final rule, and including anticipated in-river impacts, spawning escapement for SRFC is projected at 151,100, well above the S
As discussed above in “Stocks of Concern,” NMFS' 2012 RPA for SRWC, together with projected abundance for 2016, limits Council-area fishery impacts to SRWC to 19.9 percent. In deciding on the recommended management measures, the Council additionally considered information on the impacts of ongoing drought on California salmon stocks, particularly SRWC, including the California Department of Fish and Wildlife's (CDFW) estimate of greater than 95 percent mortality of juvenile SRWC from brood years 2014 and 2015 prior to downstream emigration, information developed by CDFW on time and area vulnerability of SRWC to commercial and recreational fisheries, and public testimony on proposed season structure. In response to the information presented by CDFW on the time and area vulnerability of SRWC, the final management measures include specific limits on the fishing seasons south of Pigeon Point, CA, and result in an age-3 ocean impact rate of 12.8 percent in 2016, compared with 17.5 percent in 2015.
The treaty-Indian commercial troll fishery quotas for 2016 are 40,000 Chinook salmon and no coho in ocean management areas and Washington State Statistical Area 4B combined. These quotas are lower than the 60,000 Chinook and 42,500 coho quotas in 2015, for the same reasons discussed above for the non-tribal fishery. The treaty-Indian fishery commercial fisheries include a May and June fishery and a July and August fishery, with a quota of 20,000 Chinook in each fishery.
The timing of the March and April Council meetings makes it impracticable for the Council to recommend fishing seasons that begin before May 1 of the same year. Therefore, this action also establishes the 2017 fishing seasons that open earlier than May 1. The Council recommended, and NMFS concurs, that the commercial season off Oregon from Cape Falcon to the Oregon/California border, the commercial season off California from Horse Mountain to Point Arena, the recreational season off Oregon from Cape Falcon to Humbug Mountain, and the recreational season off California from Horse Mountain to the U.S./Mexico border will open in 2017 as indicated in the “Season Description” section of this document. At the March 2017 meeting, the Council may consider inseason recommendations to adjust the commercial and recreational seasons prior to May 1 in the areas off Oregon and California.
The following sections set out the management regime for the ocean salmon fishery. Open seasons and days are described in Sections 1, 2, and 3 of the 2016 management measures. Inseason closures in the commercial and recreational fisheries are announced on the NMFS hotline and through the U.S. Coast Guard (USCG) Notice to Mariners as described in Section 6. Other inseason adjustments to management measures are also announced on the hotline and through the Notice to Mariners. Inseason actions will also be published in the
The following are the management measures recommended by the Council and approved and implemented here for 2016 and, as specified, for 2017.
Parts A, B, and C of this section contain restrictions that must be followed for lawful participation in the fishery. Part A identifies each fishing area and provides the geographic boundaries from north to south, the open seasons for the area, the salmon species allowed to be caught during the seasons, and any other special restrictions effective in the area. Part B specifies minimum size limits. Part C specifies special requirements, definitions, restrictions, and exceptions.
May 1-3, May 6-31, June 3-5, June 10-16, and June 24-30 or 14,000 Chinook, no more than 4,600 of which may be caught in the area between the U.S./Canada border and the Queets River and no more than 4,600 of which may be caught in the area between Leadbetter Pt. and Cape Falcon (C.8). May 1 through May 3 with a landing and possession limit of 40 Chinook per vessel for the open period. Then May 6 through May 31, five days per week, Friday through Tuesday with a landing and possession limit of 40 Chinook per vessel per open period. Then June 3-5, June 10-16, and June 24-30, with a landing and possession limit of 40 Chinook per vessel per open period (C.1, C.6). All salmon except coho (C.4, C.7). Chinook minimum size limit of 28 inches total length (B). Vessels in possession of salmon north of the Queets River may not cross the Queets River line without first notifying Washington Department of Fish and Wildlife (WDFW) at 360-249-1215 with area fished, total Chinook and halibut catch aboard, and destination. Vessels in possession of salmon south of the Queets River may not cross the Queets River line without first notifying WDFW at 360-249-1215 with area fished, total Chinook and halibut catch aboard, and destination. When it is projected that approximately 75 percent of the overall Chinook guideline has been landed, or approximately 75 percent of the Chinook subarea guideline has been landed in the area between the U.S./Canada border and the Queets River, or approximately 75 percent of the Chinook subarea guideline has been landed in the area between Leadbetter Point and Cape Falcon, inseason action will be considered to ensure the guideline is not exceeded. See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3). Cape Flattery, Mandatory Yelloweye Rockfish Conservation Area (YRCA), and Columbia Control Zones closed (C.5). Vessels must land and deliver their fish within 24 hours of any closure of this fishery. Under state law, vessels must report their catch on a state fish receiving ticket. Vessels fishing or in possession of salmon while fishing north of Leadbetter Point must land and
July 8-14, July 22-28, August 1-7, and August 15-23 or 21,000 Chinook, no more than 8,300 of which may be caught in the area between the U.S./Canada border and the Queets River (C.8). Landing and possession limit of 50 Chinook per vessel per open period (C.1). Vessels in possession of salmon north of the Queets River may not cross the Queets River line (see Section 5. Geographical Landmarks) without first notifying WDFW at 360-249-1215 with area fished, total Chinook and halibut catch aboard, and destination. Vessels in possession of salmon south of the Queets River may not cross the Queets River line (see Section 5. Geographical Landmarks) without first notifying WDFW at 360-249-1215 with area fished, total Chinook and halibut catch aboard, and destination. When it is projected that approximately 75 percent of the overall Chinook guideline has been landed, or approximately 75 percent of the Chinook subarea guideline has been landed in the area between the U.S./Canada border to the Queets River, inseason action will be considered to ensure the guideline is not exceeded. All salmon except coho; no chum retention north of Cape Alava, Washington in August and September (C.4, C.7). Chinook minimum size limit of 28 inches total length (B, C.1). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3). Mandatory Yelloweye Rockfish Conservation Area, Cape Flattery and Columbia Control Zones, and beginning August 8, Grays Harbor Control Zone closed (C.5, C.6). Vessels must land and deliver their fish within 24 hours of any closure of this fishery. Vessels fishing or in possession of salmon while fishing north of Leadbetter Point must land and deliver their fish within the area and north of Leadbetter Point. Vessels fishing or in possession of salmon while fishing south of Leadbetter Point must land and deliver their fish within the area and south of Leadbetter Point, except that Oregon permitted vessels may also land their fish in Garibaldi, Oregon. Under state law, vessels must report their catch on a state fish receiving ticket. Oregon State regulations require all fishers landing salmon into Oregon from any fishery between Leadbetter Point, Washington and Cape Falcon, Oregon must notify ODFW within one hour of delivery or prior to transport away from the port of landing by either calling 541-867-0300 ext. 271 or sending notification via email to
April 8-30;
May 1-31;
June 5-10, 15-30;
July 8-31;
August 8-12, 18-24;
September 1-7, 15-30;
October 1-31 (C.9.a).
Seven days per week. All salmon except coho (C.4, C.6, C.7). Chinook minimum size limit of 28 inches total length (B, C.1). All vessels fishing in the area must land their fish in the State of Oregon. See gear restrictions and definitions (C.2, C.3) and Oregon State regulations for a description of special regulations at the mouth of Tillamook Bay. Beginning September 1, no more than 40 Chinook per vessel per landing week (Thursday through Wednesday). Beginning October 1, open shoreward of the 40 fathom regulatory line (C.5.f).
In 2017, the season will open March 15 for all salmon except coho. Chinook minimum size limit of 28 inches total length. Gear restrictions same as in 2016. This opening could be modified following Council review at its March 2017 meeting.
April 8-30;
May 1-31;
June 5-10 and 15-30 or a 720 Chinook quota;
July 8 through the earlier of July 31 or a 200 Chinook quota (C.9.a).
Seven days per week. All salmon except coho (C.4, C.7). Chinook minimum size limit of 28 inches total length (B, C.1). Prior to June 1, all fish caught in this area must be landed and delivered in the state of Oregon. See compliance requirements (C.1, C.6) and gear restrictions and definitions (C.2, C.3).
June 5 through July 31 single daily landing and possession limit of 15 Chinook per vessel per day (C.8.f). Any remaining portion of the June Chinook quota may be transferred inseason on an impact neutral basis to the July quota period (C.8.b). All vessels fishing in this area must land and deliver all fish within this area or Port Orford within 24 hours of any closure of this fishery, and prior to fishing outside of this area (C.6). State regulations require fishers landing from any quota managed season in this area to notify ODFW within one hour of delivery or prior to transporting their catch to other locations by calling 541-867-0300 ext. 252 or sending notification via email to
In 2017, the season will open March 15 for all salmon except coho, with a 28 inch Chinook minimum size limit. This opening could be modified following Council review at its March 2017 meeting.
September 9 through the earlier of September 27 or a 1,000 Chinook quota (C.9.b).
Five days per week, Friday through Tuesday. All salmon except coho (C.4, C.7). Chinook minimum size limit of 28 inches total length (B, C.1). Landing and possession limit of 20 Chinook per vessel per day (C.8.f). All fish caught in this area must be landed within the area and within 24 hours of any closure of the fishery and prior to fishing outside the area (C.10). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3). Klamath Control Zone closed (C.5.e). See California State regulations for additional closures adjacent to the Smith and Klamath Rivers. When the fishery is closed between the Oregon/California border and Humbug Mountain and open to the south, vessels with fish on board caught in the open
Closed.
June 13-30;
August 3-27;
September 1-30 (C.9.b).
Seven days per week. All salmon except coho (C.4, C.7). Chinook minimum size limit of 27 inches total length (B, C.1). All fish must be landed in California. All salmon caught in California prior to September 1 must be landed and offloaded no later than 11:59 p.m., August 30 (C.6). When the California KMZ fishery is open, all fish caught in the area must be landed south of Horse Mountain (C.6). During September, all fish must be landed north of Point Arena (C.6). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3).
In 2017, the season will open April 16-30 for all salmon except coho, with a 27-inch Chinook minimum size limit and the same gear restrictions as in 2016. All fish caught in the area must be landed in the area. This opening could be modified following Council review at its March 2017 meeting.
May 6-31;
June 13-30;
August 3-28;
September 1-30 (C.9.b).
Seven days per week. All salmon except coho (C.4, C.7). Chinook minimum size limit of 27 inches total length prior to September 1, 26 inches thereafter (B, C.1). All fish must be landed in California. All salmon caught in California prior to September 1 must be landed and offloaded no later than 11:59 p.m., August 30 (C.6). During September, all fish must be landed south of Point Arena (C.6). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3).
Five days per week, Monday through Friday. All salmon except coho (C.4, C.7). Chinook minimum size limit of 26 inches total length (B, C.1). All fish caught in this area must be landed between Point Arena and Pigeon Point (C.6). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3).
May 1-31;
June 1-30 (C.9.b).
Seven days per week. All salmon except coho (C.4, C.7). Chinook minimum size limit of 27 inches total length (B, C.1). All fish must be landed in California. All salmon caught in California prior to September 1 must be landed and offloaded no later than 11:59 p.m., August 30 (C.6). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3).
May 1-31;
June 1-30 (C.9.b).
Seven days per week. All salmon except coho (C.4, C.7). Chinook minimum size limit of 27 inches total length (B, C.1). All fish must be landed in California. All salmon caught in California prior to September 1 must be landed and offloaded no later than 11:59 p.m., August 30 (C.6). See compliance requirements (C.1) and gear restrictions and definitions (C.2, C.3).
California State regulations require all salmon be made available to a CDFW representative for sampling immediately at port of landing. Any person in possession of a salmon with a missing adipose fin, upon request by an authorized agent or employee of the CDFW, shall immediately relinquish the head of the salmon to the state (California Fish and Game Code § 8226).
All salmon on board a vessel must meet the minimum size, landing/possession limit, or other special requirements for the area being fished and the area in which they are landed if the area is open or has been closed less than 48 hours for that species of salmon. Salmon may be landed in an area that has been closed for a species of salmon more than 48 hours only if they meet the minimum size, landing/possession limit, or other special requirements for the area in which they were caught. Salmon may not be filleted prior to landing.
Any person who is required to report a salmon landing by applicable state law must include on the state landing receipt for that landing both the number and weight of salmon landed by species. States may require fish landing/receiving tickets be kept on board the vessel for 90 days or more after landing to account for all previous salmon landings.
a. Salmon may be taken only by hook and line using single point, single shank, barbless hooks.
b. Cape Falcon, Oregon, to the Oregon/California border: No more than 4 spreads are allowed per line.
c. Oregon/California border to U.S./Mexico border: No more than 6 lines are allowed per vessel, and barbless circle hooks are required when fishing with bait by any means other than trolling.
a. Except as provided under C.4.b below, it is unlawful for a vessel to have troll or recreational gear in the water while in any area closed to fishing for a certain species of salmon, while possessing that species of salmon; however, fishing for species other than salmon is not prohibited if the area is open for such species, and no salmon are in possession.
b. When Genetic Stock Identification (GSI) samples will be collected in an area closed to commercial salmon fishing, the scientific research permit holder shall notify NOAA Office of Law Enforcement, USCG, CDFW, WDFW, and Oregon State Police at least 24 hours prior to sampling and provide the following information: The vessel name, date, location and time collection activities will be done. Any vessel collecting GSI samples in a closed area shall not possess any salmon other than those from which GSI samples are being collected. Salmon caught for collection of GSI samples must be immediately released in good condition after collection of samples.
a.
b.
c.
d.
e.
f. Waypoints for the 40 fathom regulatory line from Cape Falcon to Humbug Mountain (50 CFR 660.71(k)).
If prevented by unsafe weather conditions or mechanical problems from meeting special management area landing restrictions, vessels must notify the U.S. Coast Guard and receive acknowledgment of such notification prior to leaving the area. This notification shall include the name of the vessel, port where delivery will be made, approximate amount of salmon (by species) on board, the estimated time of arrival, and the specific reason the vessel is not able to meet special management area landing restrictions.
In addition to contacting the U.S. Coast Guard, vessels fishing south of the Oregon/California border must notify CDFW within one hour of leaving the management area by calling 800-889-8346 and providing the same information as reported to the U.S. Coast Guard. All salmon must be offloaded within 24 hours of reaching port.
During authorized periods, the operator of a vessel that has been issued an incidental halibut harvest license by the International Pacific Halibut Commission may retain Pacific halibut caught incidentally in Area 2A while trolling for salmon. Halibut retained must be no less than 32 inches in total length, measured from the tip of the lower jaw with the mouth closed to the extreme end of the middle of the tail, and must be landed with the head on. When halibut are caught and landed incidental to commercial salmon fishing by an IPHC license holder, any person who is required to report the salmon landing by applicable state law must include on the state landing receipt for that landing both the number of halibut landed, and the total dressed, head-on weight of halibut landed, in pounds, as well as the number and species of salmon landed.
License applications for incidental harvest must be obtained from the IPHC (phone: 206-634-1838). Applicants must apply prior to mid-March 2017 for 2017 permits (exact date to be set by the IPHC in early 2017). Incidental harvest is authorized only during April, May, and June of the 2016 troll seasons and after June 30 in 2016 if quota remains and if announced on the NMFS hotline (phone: 800-662-9825 or 206-526-6667). WDFW, ODFW, and CDFW will monitor landings. If the landings are projected to exceed the IPHC's 34,123 pound preseason allocation or the total Area 2A non-Indian commercial halibut allocation, NMFS will take inseason action to prohibit retention of halibut in the non-Indian salmon troll fishery.
May 1, 2016, through December 31, 2016, and April 1-30, 2017, license holders may land or possess no more than one Pacific halibut per each three Chinook, except one Pacific halibut may be possessed or landed without meeting the ratio requirement, and no more than 20 halibut may be possessed or landed per trip. Pacific halibut retained must be no less than 32 inches in total length (with head on). IPHC license holders must comply with all applicable IPHC regulations.
Incidental Pacific halibut catch regulations in the commercial salmon troll fishery adopted for 2016, prior to any 2016 inseason action, will be in effect when incidental Pacific halibut retention opens on April 1, 2017 unless otherwise modified by inseason action at the March 2017 Council meeting.
a. “C-shaped” yelloweye rockfish conservation area is an area to be voluntarily avoided for salmon trolling. NMFS and the Council request salmon trollers voluntarily avoid this area in order to protect yelloweye rockfish. The area is defined in the Pacific Council Halibut Catch Sharing Plan in the North Coast subarea (Washington marine area 3), with the following coordinates in the order listed:
In addition to standard inseason actions or modifications already noted under the season description, the following inseason guidance applies:
a. Chinook remaining from the May through June non-Indian commercial troll harvest guideline north of Cape Falcon may be transferred to the July through September harvest guideline if the transfer would not result in exceeding preseason impact expectations on any stocks.
b. Chinook remaining from the June non-Indian commercial troll quotas in the Oregon KMZ may be transferred to the Chinook quota for the July open period if the transfer would not result in exceeding preseason impact expectations on any stocks.
c. NMFS may transfer fish between the recreational and commercial fisheries north of Cape Falcon if there is agreement among the areas' representatives on the Salmon Advisory Subpanel (SAS), and if the transfer would not result in exceeding preseason impact expectations on any stocks.
d. At the March 2017 meeting, the Council will consider inseason recommendations for special regulations for any experimental fisheries (proposals must meet Council protocol and be received in November 2016).
e. If retention of unmarked coho is permitted by inseason action, the allowable coho quota will be adjusted to ensure preseason projected impacts on all stocks is not exceeded.
f. Landing limits may be modified inseason to sustain season length and keep harvest within overall quotas.
Consistent with Council management objectives:
a. The State of Oregon may establish additional late-season fisheries in state waters.
b. The State of California may establish limited fisheries in selected state waters. Check state regulations for details.
C.10. For the purposes of California Fish and Game Code, Section 8232.5, the definition of the Klamath Management Zone (KMZ) for the ocean salmon season shall be that area from Humbug Mountain, Oregon, to Horse Mountain, California.
Parts A, B, and C of this section contain restrictions that must be
July 1 through earlier of August 21 or a subarea guideline of 6,200 Chinook (C.6).
Seven days per week. All salmon except coho; no chum beginning August 1; two fish per day (C.1). Beginning August 1, Chinook non-retention east of the Bonilla-Tatoosh line (C.4.a) during Council managed ocean fishery. Chinook minimum size limit of 24 inches total length (B). See gear restrictions and definitions (C.2, C.3). Inseason management may be used to sustain season length and keep harvest within the overall Chinook and coho recreational TACs for north of Cape Falcon (C.5).
July 1 through earlier of August 21 or a subarea guideline of 2,000 Chinook (C.6).
Seven days per week. All salmon except coho; two fish per day. Chinook minimum size limit of 24 inches total length (B). See gear restrictions and definitions (C.2, C.3). Inseason management may be used to sustain season length and keep harvest within the overall Chinook and coho recreational TACs for north of Cape Falcon (C.5).
July 1 through earlier of August 21 or a subarea guideline of 16,600 Chinook (C.6).
Seven days per week. All salmon except coho; one fish per day (C.1). Chinook minimum size limit of 24 inches total length (B). See gear restrictions and definitions (C.2, C.3). Grays Harbor Control Zone closed beginning August 8 (C.4.b). Inseason management may be used to sustain season length and keep harvest within the overall Chinook and coho recreational TACs for north of Cape Falcon (C.5).
July 1 through earlier of August 31 or 18,900 marked coho subarea quota with a subarea guideline of 10,200 Chinook (C.6).
Seven days per week. All salmon; two fish per day, no more than one of which can be a Chinook (C.1). Chinook minimum size limit of 24 inches total length (B). See gear restrictions and definitions (C.2, C.3). Columbia Control Zone closed (C.4.c). Inseason management may be used to sustain season length and keep harvest within the overall Chinook and coho recreational TACs for north of Cape Falcon (C.5).
March 15 through October 31 (C.6), except as provided below during the all-salmon mark-selective and September non-mark-selective coho fisheries.
Seven days per week. All salmon except coho; two fish per day (C.1). Chinook minimum size limit of 24 inches total length (B). See gear restrictions and definitions (C.2, C.3).
• Non-mark-selective coho fishery: September 3 through the earlier of September 30 or a landed catch of 7,500 coho (C.5).
Seven days per week. All salmon, two fish per day (C.1). See minimum size limits (B) and gear restrictions and definitions (C.2, C.3).
The all salmon except coho season reopens the earlier of October 1 or attainment of the coho quota (C.5).
In 2017, the season between Cape Falcon and Humbug Mountain will open March 15 for all salmon except coho; two fish per day (C.1). Chinook minimum size limit of 24 inches total length (B); and the same gear restrictions as in 2016 (C.2, C.3).
Fishing in the Stonewall Bank yelloweye rockfish conservation area restricted to trolling only on days the all depth recreational halibut fishery is open (call the halibut fishing hotline 1-800-662-9825 for specific dates) (C.3.b, C.4.d).
All-salmon mark-selective coho fishery: June 25 through the earlier of August 7 or a landed catch of 26,000 marked coho (C.5).
Seven days per week. All salmon, two fish per day. All retained coho must be marked with a healed adipose fin clip (C.1). Chinook minimum size limit of 24 inches total length (B). See gear restrictions and definitions (C.2, C.3). The all salmon except coho season reopens the earlier of August 8 or attainment of the coho quota.
Fishing in the Stonewall Bank Yelloweye Rockfish Conservation Area restricted to trolling only on days the all depth recreational halibut fishery is open (call the halibut fishing hotline 1-800-662-9825 for specific dates) (C.3.b, C.4.d).
May 28 through August 7 and September 3 through September 5; except as provided above during the all-salmon mark-selective coho fishery (C.6).
Seven days per week. All salmon except coho, except as noted above in the all-salmon mark-selective coho fishery; two fish per day (C.1). Chinook minimum size limit of 24 inches total length (B). See gear restrictions and definitions (C.2, C.3).
May 16 through May 31, June 16 through June 30, July 16 through August 16, and September 1 through September 5 (C.6).
Seven days per week. All salmon except coho; two fish per day (C.1). Chinook minimum size limit of 20 inches total length (B). See gear restrictions and definitions (C.2, C.3). Klamath Control Zone closed in August (C.4.e). See California State regulations for additional closures adjacent to the Smith, Eel, and Klamath Rivers.
April 2 through November 13 (C.6).
Seven days per week. All salmon except coho; two fish per day (C.1). Chinook minimum size limit of 20 inches total length (B). See gear restrictions and definitions (C.2, C.3).
In 2017, season opens April 1 for all salmon except coho; two fish per day (C.1). Chinook minimum size limit of 20 inches total length (B); and the same gear restrictions as in 2016 (C.2, C.3).
April 2 through October 31 (C.6).
Seven days per week. All salmon except coho; two fish per day (C.1). Chinook minimum size limit of 24 inches total length through April 30, 20 inches thereafter (B). See gear restrictions and definitions (C.2, C.3).
In 2017, season opens April 1 for all salmon except coho; two fish per day (C.1). Chinook minimum size limit of 24 inches total length (B); and the same gear restrictions as in 2016 (C.2, C.3).
April 2 through July 15 (C.6).
Seven days per week. All salmon except coho; two fish per day (C.1). Chinook minimum size limit of 24 inches total length (B). See gear restrictions and definitions (C.2, C.3).
In 2017, season opens April 1 for all salmon except coho; two fish per day (C.1). Chinook minimum size limit of 24 inches total length (B); and the same gear restrictions as in 2016 (C.2, C.3).
April 2 through May 31 (C.6).
Seven days per week. All salmon except coho; two fish per day (C.1). Chinook minimum size limit of 24 inches total length (B). See gear restrictions and definitions (C.2, C.3).
In 2017, season opens April 1 for all salmon except coho; two fish per day (C.1). Chinook minimum size limit of 24 inches total length (B); and the same gear restrictions as in 2016 (C.2, C.3).
California State regulations require all salmon be made available to a CDFW representative for sampling immediately at port of landing. Any person in possession of a salmon with a missing adipose fin, upon request by an authorized agent or employee of the CDFW, shall immediately relinquish the head of the salmon to the state (California Code of Regulations Title 14 Section 1.73).
All salmon on board a vessel must meet the minimum size or other special requirements for the area being fished and the area in which they are landed if that area is open. Salmon may be landed in an area that is closed only if they meet the minimum size or other special requirements for the area in which they were caught. Salmon may not be filleted prior to landing.
Ocean Boat Limits: Off the coast of Washington, Oregon, and California, each fisher aboard a vessel may continue to use angling gear until the combined daily limits of Chinook and coho salmon for all licensed and juvenile anglers aboard have been attained (additional state restrictions may apply).
Salmon may be taken only by hook and line using barbless hooks. All persons fishing for salmon, and all persons fishing from a boat with salmon on board, must meet the gear restrictions listed below for specific areas or seasons.
a. U.S./Canada border to Point Conception, California: No more than one rod may be used per angler; and no more than two single point, single shank barbless hooks are required for all fishing gear. [Note: ODFW regulations in the state-water fishery off Tillamook Bay may allow the use of barbed hooks to be consistent with inside regulations.]
b. Horse Mountain, California, to Point Conception, California: Single point, single shank, barbless circle hooks (see gear definitions below) are required when fishing with bait by any means other than trolling, and no more than two such hooks shall be used. When angling with two hooks, the distance between the hooks must not exceed five inches when measured from the top of the eye of the top hook to the inner base of the curve of the lower hook, and both hooks must be permanently tied in place (hard tied). Circle hooks are not required when artificial lures are used without bait.
a. Recreational fishing gear defined: Off Oregon and Washington, angling tackle consists of a single line that must be attached to a rod and reel held by hand or closely attended; the rod and reel must be held by hand while playing a hooked fish. No person may use more than one rod and line while fishing off Oregon or Washington. Off California, the line must be attached to a rod and reel held by hand or closely attended; weights directly attached to a line may not exceed four pounds (1.8 kg). While fishing off California north of Point Conception, no person fishing for salmon, and no person fishing from a boat with salmon on board, may use more than one rod and line. Fishing includes any activity which can reasonably be expected to result in the catching, taking, or harvesting of fish.
b. Trolling defined: Angling from a boat or floating device that is making way by means of a source of power, other than drifting by means of the prevailing water current or weather conditions.
c. Circle hook defined: A hook with a generally circular shape and a point which turns inward, pointing directly to the shank at a 90° angle.
a. The Bonilla-Tatoosh Line: A line running from the western end of Cape Flattery to Tatoosh Island Lighthouse (48°23′30″ N. lat., 124°44′12″ W. long.) to the buoy adjacent to Duntze Rock (48°24′37″ N. lat., 124°44′37″ W. long.), then in a straight line to Bonilla Point (48°35′39″ N. lat., 124°42′58″ W. long.) on Vancouver Island, British Columbia.
b. Grays Harbor Control Zone—The area defined by a line drawn from the Westport Lighthouse (46°53′18″ N. lat., 124° 07′01″ W. long.) to Buoy #2 (46°52′42″ N. lat., 124°12′42″ W. long.) to Buoy #3 (46°55′00″ N. lat., 124°14′48″ W. long.) to the Grays Harbor north jetty (46°55′36″ N. lat., 124°10′51″ W. long.).
c. Columbia Control Zone: An area at the Columbia River mouth, bounded on the west by a line running northeast/southwest between the red lighted Buoy #4 (46°13′35″ N. lat., 124°06′50″ W. long.) and the green lighted Buoy #7 (46°15′09′ N. lat., 124°06′16″ W. long.); on the east, by the Buoy #10 line which bears north/south at 357° true from the south jetty at 46°14′00″ N. lat., 124°03′07″ W. long. to its intersection with the north jetty; on the north, by a
d. Stonewall Bank Yelloweye Rockfish Conservation Area: The area defined by the following coordinates in the order listed:
e. Klamath Control Zone: The ocean area at the Klamath River mouth bounded on the north by 41°38′48″ N. lat. (approximately 6 nautical miles north of the Klamath River mouth); on the west by 124°23′00″ W. long. (approximately 12 nautical miles off shore); and, on the south by 41°26′48″ N. lat. (approximately 6 nautical miles south of the Klamath River mouth).
Regulatory modifications may become necessary inseason to meet preseason management objectives such as quotas, harvest guidelines, and season duration. In addition to standard inseason actions or modifications already noted under the season description, the following inseason guidance applies:
a. Actions could include modifications to bag limits, or days open to fishing, and extensions or reductions in areas open to fishing.
b. Coho may be transferred inseason among recreational subareas north of Cape Falcon to help meet the recreational season duration objectives (for each subarea) after conferring with representatives of the affected ports and the Council's SAS recreational representatives north of Cape Falcon, and if the transfer would not result in exceeding preseason impact expectations on any stocks.
c. Chinook and coho may be transferred between the recreational and commercial fisheries north of Cape Falcon if there is agreement among the representatives of the SAS, and if the transfer would not result in exceeding preseason impact expectations on any stocks.
d. Fishery managers may consider inseason action modifying regulations restricting retention of unmarked coho. To remain consistent with preseason expectations, any inseason action shall consider, if significant, the difference between observed and preseason forecasted mark rates. Such a consideration may also include a change in bag limit of two salmon, no more than one of which may be a coho.
Consistent with Council management objectives, the States of Washington, Oregon, and California may establish limited seasons in state waters. Check state regulations for details.
Parts A, B, and C of this section contain requirements that must be followed for lawful participation in the fishery.
May 1 through the earlier of June 30 or 20,000 Chinook quota.
All salmon except coho. If the Chinook quota is exceeded, the excess will be deducted from the later all-salmon season (C.5). See size limit (B) and other restrictions (C).
July 1 through the earlier of August 31, or 20,000 preseason Chinook quota (C.5). All salmon except coho. See size limit (B) and other restrictions (C).
All boundaries may be changed to include such other areas as may hereafter be authorized by a Federal court for that tribe's treaty fishery.
S'KLALLAM—Washington State Statistical Area 4B (All).
MAKAH—Washington State Statistical Area 4B and that portion of the FMA north of 48°02′15″ N. lat. (Norwegian Memorial) and east of 125°44′00″ W. long.
QUILEUTE—That portion of the FMA between 48°10′00″ N. lat. (Cape Alava.) and 47°3′70″ N. lat. (Queets River) and east of 125°44′00″ W. long.
HOH—That portion of the FMA between 47°54′18″ N. lat. (Quillayute River) and 47°21′00″ N. lat. (Quinault River) and east of 125°44′00″ W. long.
QUINAULT—That portion of the FMA between 47°40′06″ N. lat. (Destruction Island) and 46°53′18″ N. lat. (Point Chehalis) and east of 125°08′30″ W. long.
a. Single point, single shank, barbless hooks are required in all fisheries.
b. No more than eight fixed lines per boat.
c. No more than four hand held lines per person in the Makah area fishery (Washington State Statistical Area 4B and that portion of the FMA north of 48°02′15″ N. lat. (Norwegian Memorial) and east of 125°44′00″ W. long.).
a. The quotas include troll catches by the S'Klallam and Makah tribes in Washington State Statistical Area 4B from May 1 through August 31.
b. The Quileute Tribe will continue a ceremonial and subsistence fishery during the time frame of October 1 through October 15 in the same manner as in 2004-2015. Fish taken during this fishery are to be counted against treaty troll quotas established for the 2016 season (estimated harvest during the October ceremonial and subsistence fishery: 20 Chinook; 0 coho).
a. The area within a six nautical mile radius of the mouths of the Queets River (47°31′42″ N. lat.) and the Hoh River (47°45′12″ N. lat.) will be closed to commercial fishing.
b. A closure within two nautical miles of the mouth of the Quinault River (47°21′00″ N. lat.) may be enacted by the Quinault Nation and/or the State of Washington and will not adversely
In addition to standard inseason actions or modifications already noted under the season description, the following inseason guidance applies:
a. Chinook remaining from the May through June treaty—Indian ocean troll harvest guideline north of Cape Falcon may be transferred to the July through August harvest guideline on a fishery impact equivalent basis.
Under the authority of the Northern Pacific Halibut Act, NMFS promulgated regulations governing the Pacific halibut fishery, which appear at 50 CFR part 300, subpart E. On April 1, 2016, NMFS published a final rule (81 FR 18789) to implement the IPHC's recommendations, to announce fishery regulations for U.S. waters off Alaska and fishery regulations for treaty commercial and ceremonial and subsistence fisheries, some regulations for non-treaty commercial fisheries for U.S. waters off the West Coast, and approval of and implementation of the Area 2A Pacific halibut Catch Sharing Plan and the Area 2A management measures for 2016. The regulations and management measures provide that vessels participating in the salmon troll fishery in Area 2A (all waters off the States of Washington, Oregon, and California), which have obtained the appropriate IPHC license, may retain halibut caught incidentally during authorized periods in conformance with provisions published with the annual salmon management measures. A salmon troller may participate in the halibut incidental catch fishery during the salmon troll season or in the directed commercial fishery targeting halibut, but not both.
The following measures have been approved by the IPHC, and implemented by NMFS. During authorized periods, the operator of a vessel that has been issued an incidental halibut harvest license may retain Pacific halibut caught incidentally in Area 2A while trolling for salmon. Halibut retained must be no less than 32 inches (81.28 cm) in total length, measured from the tip of the lower jaw with the mouth closed to the extreme end of the middle of the tail, and must be landed with the head on.
License applications for incidental harvest must be obtained from the International Pacific Halibut Commission (IPHC) (phone: 206-634-1838). Applicants must apply prior to mid-March 2017 for 2017 permits (exact date to be set by the IPHC in early 2017). Incidental harvest is authorized only during April, May, and June of the 2016 troll seasons and after June 30 in 2016 if quota remains and if announced on the NMFS hotline (phone: 1-800-662-9825 or 206-526-6667). WDFW, ODFW, and CDFW will monitor landings. If the landings are projected to exceed the 34,123 pound preseason allocation or the total Area 2A non-Indian commercial halibut allocation, NMFS will take inseason action to prohibit retention of halibut in the non-Indian salmon troll fishery.
May 1, 2016, through December 31, 2016, and April 1-30, 2017, license holders may land or possess no more than one Pacific halibut per each three Chinook, except one Pacific halibut may be possessed or landed without meeting the ratio requirement, and no more than 20 halibut may be possessed or landed per trip. Pacific halibut retained must be no less than 32 inches in total length (with head on). IPHC license holders must comply with all applicable IPHC regulations.
Incidental Pacific halibut catch regulations in the commercial salmon troll fishery adopted for 2016, prior to any 2016 inseason action, will be in effect when incidental Pacific halibut retention opens on April 1, 2017, unless otherwise modified by inseason action at the March 2017 Council meeting.
NMFS and the Council request that salmon trollers voluntarily avoid a “C-shaped” YRCA (also known as the Salmon Troll YRCA) in order to protect yelloweye rockfish. Coordinates for the Salmon Troll YRCA are defined at 50 CFR 660.70(a) in the North Coast subarea (Washington marine area 3). See Section 1.C.7. in this document for the coordinates.
Wherever the words “nautical miles off shore” are used in this document, the distance is measured from the baseline from which the territorial sea is measured.
Geographical landmarks referenced in this document are at the following locations:
Notice of inseason management actions will be provided by a telephone hotline administered by the West Coast Region, NMFS, 1-800-662-9825 or 206-526-6667, and by USCG Notice to Mariners broadcasts. These broadcasts are announced on Channel 16 VHF-FM and 2182 KHz at frequent intervals. The announcements designate the channel or frequency over which the Notice to Mariners will be immediately broadcast. Inseason actions will also be published in the
This final rule is necessary for conservation and management of Pacific coast salmon stocks and is consistent with the Magnuson-Stevens Act and other applicable law. These regulations are being promulgated under the authority of 16 U.S.C. 1855(d) and 16 U.S.C. 773(c).
This final rule is not significant under Executive Order 12866.
The Assistant Administrator for Fisheries finds good cause under 5 U.S.C. 553(b)(B), to waive the requirement for prior notice and opportunity for public comment, as such procedures are impracticable and contrary to the public interest.
The annual salmon management cycle begins May 1 and continues through April 30 of the following year. May 1 was chosen because the pre-May harvests constitute a relatively small portion of the annual catch. The time frame of the preseason process for determining the annual modifications to ocean salmon fishery management measures depends on when the pertinent biological data are available. Salmon stocks are managed to meet
The preseason planning and public review process associated with developing Council recommendations is initiated in February as soon as the forecast information becomes available. The public planning process requires coordination of management actions of four states, numerous Indian tribes, and the Federal Government, all of which have management authority over the stocks. This complex process includes the affected user groups, as well as the general public. The process is compressed into a two-month period culminating with the April Council meeting at which the Council adopts a recommendation that is forwarded to NMFS for review, approval, and implementation of fishing regulations effective on May 1.
Providing opportunity for prior notice and public comments on the Council's recommended measures through a proposed and final rulemaking process would require 30 to 60 days in addition to the two-month period required for development of the regulations. Delaying implementation of annual fishing regulations, which are based on the current stock abundance projections, for an additional 60 days would require that fishing regulations for May and June be set in the previous year, without the benefit of information regarding current stock status. For the 2016 fishing regulations, the current stock status was not available to the Council until February. Because a substantial amount of fishing occurs during May and June, managing the fishery with measures developed using the prior year's data could have significant adverse effects on the managed stocks, including ESA-listed stocks. Although salmon fisheries that open prior to May are managed under the prior year's measures, as modified by the Council at its March meeting, relatively little harvest occurs during that period (
If these measures are not in place on May 1, salmon fisheries will not open as scheduled. This would result in lost fishing opportunity, negative economic impacts, and confusion for the public as the state fisheries adopt concurrent regulations that conform to the Federal management measures.
Overall, the annual population dynamics of the various salmon stocks require managers to adjust the season structure of the West Coast salmon fisheries to both protect weaker stocks and give fishers access to stronger salmon stocks, particularly hatchery produced fish. Failure to implement these measures immediately could compromise the status of certain stocks, or result in foregone opportunity to harvest stocks whose abundance has increased relative to the previous year thereby undermining the purpose of this agency action.
In addition, public comment is received and considered by the Council and NMFS throughout the process of developing these management measures. As described above, the Council takes comment at its March and April meetings, and hears summaries of comments received at public meetings held between the March and April meetings in each of the coastal states. NMFS also invited comments in a notice published prior to the March Council meeting, and considered comments received by the Council through its representative on the Council. Thus, these measures were developed with significant public input.
Based upon the above-described need to have these measures effective on May 1 and the fact that there is limited time available to implement these new measures after the final Council meeting in April and before the commencement of the ocean salmon fishing year on May 1, NMFS has concluded it is impracticable and contrary to the public interest to provide an opportunity for prior notice and public comment under 5 U.S.C. 553(b)(B).
The Assistant Administrator for Fisheries also finds that good cause exists under 5 U.S.C. 553(d)(3), to waive the 30-day delay in effectiveness of this final rule. As previously discussed, data are not available until February and management measures are not finalized until mid-April. These measures are essential to conserve threatened and endangered ocean salmon stocks, and to provide for harvest of more abundant stocks. Delaying the effectiveness of these measures by 30 days could compromise the ability of some stocks to attain their conservation objectives, preclude harvest opportunity, and negatively impact anticipated international, state, and tribal salmon fisheries, thereby undermining the purposes of this agency action and the requirements of the Magnuson-Stevens Act.
To enhance the fishing industry's notification of these new measures, and to minimize the burden on the regulated community required to comply with the new regulations, NMFS is announcing the new measures over the telephone hotline used for inseason management actions and is posting the regulations on its West Coast Region Web site (
Because prior notice and an opportunity for public comment are not required to be provided for these portions of this rule by 5 U.S.C. 553, or any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601
This action contains collection-of-information requirements subject to the Paperwork Reduction Act (PRA), and which have been approved by the Office of Management and Budget (OMB) under control number 0648-0433. The public reporting burden for providing notifications if landing area restrictions cannot be met is estimated to average 15 minutes per response. This estimate includes the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.
Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number.
NMFS has current ESA biological opinions that cover fishing under these
In 2009, NMFS consulted on the effects of fishing under the Salmon FMP on the endangered Southern Resident Killer Whale Distinct Population Segment (SRKW) and concluded the salmon fisheries were not likely to jeopardize SRKW. The 2016 salmon management measures are consistent with the terms of that biological opinion.
This final rule was developed after meaningful and collaboration with the affected tribes. The tribal representative on the Council made the motion for the regulations that apply to the tribal fisheries.
16 U.S.C. 773-773k; 1801
U.S. Office of Personnel Management.
Proposed rule with request for comments.
The U.S. Office of Personnel Management (OPM) is proposing to revise its regulations pertaining to when, during the hiring process (unless an exception is granted), a hiring agency can request information typically collected during a background investigation from an applicant for Federal employment. OPM is proposing this change to promote compliance with Merit System Principles as well as the goal of the Federal Interagency Reentry Council and the President's Memorandum of January 31, 2014, “Enhancing Safeguards to Prevent the Undue Denial of Federal Employment Opportunities to the Unemployed and Those Facing Financial Difficulty Through No Fault of Their Own.” The intended effect of this proposal is to better ensure that applicants from all segments of society, including those with prior criminal histories, receive a fair opportunity to compete for Federal employment.
Comments must be received on or before July 1, 2016.
You may submit comments through the Federal eRulemaking Portal at
Mr. Mike Gilmore by telephone on (202) 606-2429, by fax at (202) 606-4430, by TTY at (202) 418-3134, or by email at
Current regulations at 5 CFR part 731.103(d) allow agencies to begin to determine an applicant's suitability at any time during the hiring process. Agencies use a variety of methods to determine an applicant's suitability for Federal employment. Criminal conduct is one of several criteria agencies consider in the course of making suitability determinations. Many agencies administer the Optional Form (OF) 306, “Declaration for Federal Employment,” to applicants in order to collect information about an applicant's history, as an advance screening process prior to the suitability investigation that is required for appointment in a covered position. The OF-306 contains a variety of questions about background information. Among these are several questions about an applicant's criminal history, including past convictions or current arrests that were not yet the subject of a final disposition.
Currently, there is nothing in OPM's regulations to prevent hiring agencies from requiring an applicant to complete and submit the OF-306 or equivalent information collection as part of the job-seeker's initial application package. The better practice, and one that many agencies already employ, is to wait until the later stages of the hiring process to collect this kind of information.
Early inquiries into an applicant's background, including his or her criminal or credit history (such as at the point at which an applicant submits his or her application materials) could have the effect of discouraging motivated, well-qualified individuals from applying for a Federal job. In particular, collecting such information from those who have a criminal record, but who have served their time and been rehabilitated, might discourage them from applying for a Federal job and limit their opportunities to obtain the means to secure stable housing, provide support for their families, and contribute to their communities. Early inquiries could also result in the disqualification of an otherwise eligible and qualified applicant solely on the basis of his or her criminal history—regardless of whether an arrest has actually resulted in charges or a conviction, and regardless of whether consideration of the applicant's criminal history is justified by business necessity,
Under the proposed rule, agencies will not be permitted to make specific inquiries concerning an applicant's background of the sort asked on the OF-306's `Background Information' section or other forms used to conduct suitability investigations for Federal employment unless the hiring agency has made a conditional offer of employment to an applicant. This will preclude agencies, in most cases, from making a referral or initial selection decision on the basis of adverse criminal or credit history or other factors normally developed through the OF-306. The proposed rule will permit the agency to make an objection, pass-over request, or suitability determination on the basis of criminal history record information or other information normally collected on the OF-306 only after the applicant's qualifications for the position being filled have been fairly assessed and the hiring agency has made a conditional offer of employment to the applicant. The proposed rule provides a mechanism for agencies to request exceptions from this prohibition where there are legitimate, specifically job-related reasons why agencies might wish to disqualify candidates based on their criminal history. Nothing in this
OPM is proposing this change to continue to encourage applicants from all segments of society to seek Federal employment, and to ensure that for most Federal jobs, individuals with prior criminal or other adverse history are given the opportunity to demonstrate their knowledge, skills, and ability in a fair and open competition. The proposed rule will strengthen the enforceability of OPM's regulations while preserving necessary processes that ensure the efficiency, integrity and safety of the service.
The Merit System Principles provide that “Recruitment should be from qualified individuals from appropriate sources in an endeavor to achieve a workforce from all segments of society, and selection and advancement should be determined solely on the basis of relative ability, knowledge, and skills, after fair and open competition which assures that all receive equal opportunity.” 5 U.S.C. 2301(b)(1). The Director of OPM is charged with “executing, administering, and enforcing” the Civil Service laws, including the Merit System Principles, and “securing . . . justice in the functions of the Office.” 5 U.S.C. 1103(a)(1), (a)(5).
In addition, the Director of OPM is a member of the Federal Interagency Reentry Council chaired by the Attorney General. OPM is committed to the Council's stated goal of “remov[ing] Federal barriers to successful reentry, so that motivated individuals—who have served their time and paid their debts—are able to compete for a job, attain stable housing, support their children and their families, and contribute to their communities . . . to not only reduce recidivism and high correctional costs, but also to improve public health, child welfare, employment, education, housing and other key reintegration outcomes.”
Finally, prompted, in part, by the recent Presidential Memorandum, “Enhancing Safeguards to Prevent the Undue Denial of Federal Employment Opportunities to the Unemployed and Those Facing Financial Difficulty Through No Fault of Their Own,” 79 FR 7045 (Feb. 5, 2014), OPM has determined that it would be good policy to require agencies to defer the collection of the types of background information collected on the OF-306 until the hiring agency has made a conditional offer of employment to an applicant, with appropriate exceptions, so that there is less opportunity for this information to be misused at the preliminary screening stage. Below is an explanation of the proposed rule:
Specifically, OPM is proposing to amend 5 CFR parts 330 and 731 to require that, unless an exception has been requested by the hiring agency and granted by OPM, agencies cannot begin collecting background information unless the hiring agency has made a conditional offer of employment to an applicant. This change would limit the flexibility currently granted to agencies to administer the OF-306, and any other form of inquiry into an applicant's background, at any time during the hiring process.
The proposed language, in new subpart M of 5 CFR part 330 and 731.103(d), will require agencies to defer the collection of background information required by the OF-306 until the hiring agency has made a conditional offer of employment to an applicant. This change in requirements will further the objective that most applicants would have the opportunity to apply and be fully considered and evaluated before any action can be taken by the hiring official in reliance on that information. This will preclude agencies, in most cases, from making referral or initial selection decisions on the basis of criminal history or other information normally collected on the OF-306's background information section, and will permit the agency to make an objection, pursue a pass-over of, or make a suitability-based decision on a candidate on the basis of such information only after the applicant's qualifications have been fairly assessed and the applicant has received a conditional job offer.
The proposed rule allows agencies to request from OPM an exception to collect background information earlier in the hiring process. OPM recognizes there are legitimate, job/position-related reasons why a hiring agency may have a need to disqualify candidates with significant issues, including,
It could also include positions where the expense of completing the examination makes it appropriate to adjudicate suitability at the outset of the process (
In any event, the applicant would have notice of the process, an opportunity to rebut any issue(s) that arose, and the ability to appeal any adverse suitability action to the Merit Systems Protection Board.
OPM is proposing to consider requests for exceptions on a case-by-case basis (rather than prescribe specific criteria for an exception) in order to provide maximum flexibility to hiring agencies and account for the many unique circumstances that agencies face. In determining whether an exception is justified, OPM will consider, among other things: The occupation, and grade level(s) of the position(s) being filled; the basis for any conclusion that certain information is appropriately considered to be disqualifying; for requests based upon expense, at what point in the hiring process the agency has been conducting suitability screening for the position(s) for which an exception is being sought; and the specific need for the exception. OPM is prepared to consult with agencies and to receive requests for exceptions prior to the effective date of the final rule. In appropriate cases, OPM will be prepared to grant exceptions immediately upon effect of the final rule.
OPM is proposing the new subpart M to part 330 in order to impact all forms of placement in the Competitive service (
The Office of Management and Budget has reviewed this rulemaking in accordance with E.O. 13563 and 12866.
I certify that these proposed regulations will not have a significant economic impact on a substantial number of small entities because the regulations pertain only to Federal agencies and employees.
This proposed regulation will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant preparation of a Federalism Assessment.
This proposed regulation meets the applicable standard set forth in section 3(a) and (b)(2) of Executive Order 12988.
This rulemaking will not result in the expenditure by State, local or tribal governments of more than $100 million annually. Thus, no written assessment of unfunded mandates is required.
This action pertains to agency management, personnel and organization and does not substantially affect the rights or obligations of non-agency parties and, accordingly, is not a “rule” as that term is used by the Congressional Review Act (Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)). Therefore, the reporting requirement of 5 U.S.C. 801 does not apply.
This proposed regulatory action will not impose any additional reporting or recordkeeping requirements under the Paperwork Reduction Act.
Armed forces reserves, District of Columbia, Government employees.
Administrative practices and procedures, Government employees.
U.S. Office of Personnel Management.
Accordingly, OPM is proposing to revise 5 CFR parts 330 and 731 as follows:
5 U.S.C. 1104, 1302, 3301, 3302, 3304, and 3330; E.O. 10577, 3 CFR, 1954-58 Comp., p. 218; Section 330.103 also issued under 5 U.S.C. 3327; Subpart B also issued under 5 U.S.C. 3315 and 8151; Section 330.401 also issued under 5 U.S.C. 3310; Subparts F and G also issued under Presidential Memorandum on Career Transition Assistance for Federal Employees, September 12, 1995; Subpart G also issued under 5 U.S.C. 8337(h) and 8456(b).
A hiring agency may not make specific inquiries concerning an applicant's background of the sort asked on the OF-306's `Background Information' section or other forms used to conduct suitability investigations for Federal employment unless the hiring agency has made a conditional offer of employment to the applicant. However, in certain situations, agencies may have a business need to obtain information about the background of applicants earlier in the hiring process to determine if they meet the qualifications requirements or are suitable for the position being filled. If so, agencies must request an exception from the Office of Personnel Management in order to determine an applicant's ability to meet qualifications or suitability for Federal employment prior to making a conditional offer of employment to the applicant(s). OPM will grant exceptions only when the agency demonstrates specific job-related reasons the agency wishes to evaluate suitability earlier in the process or consider the disqualification of candidates with criminal backgrounds or other conduct issues from particular types of positions. OPM will consider such factors as, but not limited to, the nature of the position being filled (
5 U.S.C. 1302, 3301, 7301; E.O. 10577, 3 CFR 1954-1958 Comp., p. 218, as amended; E.O. 13467, 3 CFR 2009 Comp., p. 198; E.O. 13488, 3 CFR 2010 Comp., p. 189; 5 CFR parts 1, 2 and 5.
(d)(1) A hiring agency may not make specific inquiries concerning an applicant's background of the sort asked on the OF-306's `Background Information' section or other forms used to conduct suitability investigations for Federal employment unless the hiring agency has made a conditional offer of employment to the applicant. However, in certain situations, agencies may have a business need to obtain information about the suitability or background of applicants earlier in the process. If so, agencies must request an exception from the Office of Personnel Management, in accordance with the provisions of 5 CFR part 330 subpart M.
(2) OPM reserves the right to undertake a determination of suitability based upon evidence of falsification or fraud relating to an examination or appointment at any point when information giving rise to such a charge is discovered. OPM must be informed in all cases where there is evidence of material, intentional false statements, or deception or fraud in examination or appointment, and OPM will take a suitability action where warranted.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for certain Bombardier, Inc. Model DHC-8-400 series airplanes. This proposed AD was prompted by a malfunctioning No. 2 engine intake heater with corrosion on the thermostats and the fuselage skin where the thermostats made contact with the aircraft fuselage skin. This proposed AD would require a general visual inspection for corrosion of the thermostats' mounting surfaces and fuselage skin surface, corrective actions if necessary, and relocating the existing thermostats. We are proposing this AD to prevent corrosion within the thermostats that may cause the switch mechanism to seize in the open position and prevent the activation of the associated engine air intake heater. An inactive engine air intake heater could lead to an engine failure.
We must receive comments on this proposed AD by June 16, 2016.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this NPRM, contact Bombardier, Inc., Q-Series Technical Help Desk, 123 Garratt Boulevard, Toronto, Ontario M3K 1Y5, Canada; telephone: 416-375-4000; fax: 416-375-4539; email:
You may examine the AD docket on the Internet at
Assata Dessaline, Aerospace Engineer, Avionics and Services Branch, ANE 172, FAA, New York Aircraft Certification Office (ACO), 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone: 516-228-7301; fax: 516-794-5531.
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian AD CF-2015-24, dated August 24, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc. Model DHC-8-400 series airplanes. The MCAI states:
A malfunctioning Engine Air Intake Heater has been discovered with corrosion on the thermostats and the aeroplane skin where the thermostats are installed. The two thermostats are installed directly under the flight compartment floor along the aeroplane centre line where moisture accumulation and/or migration may occur, which can cause corrosion of the thermostats. Corrosion within the thermostats may seize the switch mechanism open, preventing the activation of the associated Engine Air Intake Heater. Failure of the Engine Air Intake Heater to activate may pose a safety risk to the aeroplane in icing conditions.
Bombardier has issued Service Bulletin (SB) 84-30-10 to inspect, replace if required and relocate the thermostat assembly to rectify this problem. [An inactive engine air intake heater could lead to an engine failure.]
You may examine the MCAI in the AD docket on the Internet at
Bombardier, Inc. has issued Bombardier Service Bulletin 84-30-10, Revision E, dated October 10, 2014. The service information describes procedures for a general visual inspection for corrosion of the thermostats' mounting surfaces and fuselage skin surface, corrective actions if necessary, and relocating the existing thermostats from a lower position on the aircraft skin at X-54.00 between stringers 31P and 32P (next to the centerline) to a higher position at X-54.00 between stringers 26P and 27P. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design.
We estimate that this proposed AD affects 76 airplanes of U.S. registry.
We also estimate that it would take about 12 work-hours per product to comply with the basic requirements of
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by June 16, 2016.
None.
This AD applies to Bombardier, Inc. Model DHC-8-400, -401, and -402 airplanes, certificated in any category, serial numbers 4001 through 4184 inclusive.
Air Transport Association (ATA) of America Code 30, Ice and rain protection.
This AD was prompted by a malfunctioning No. 2 engine intake heater with corrosion on the thermostats and the fuselage skin where the thermostats made contact with the aircraft fuselage skin. We are issuing this AD to prevent corrosion within the thermostats that may cause the switch mechanism to seize in the open position and prevent the activation of the associated engine air intake heater. An inactive engine air intake heater could lead to an engine failure.
Comply with this AD within the compliance times specified, unless already done.
Within 2,000 flight hours or 12 months, whichever occurs first after the effective date of this AD, do a general visual inspection of the thermostats' exterior for any signs of corrosion, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 84-30-10, Revision E, dated October 10, 2014. If any thermostat is corroded, replace the thermostat before further flight in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 84-30-10, Revision E, dated October 10, 2014.
Within 2,000 flight hours or 12 months, whichever occurs first after the effective date of this AD, do a general visual inspection of the fuselage skin surface for skin corrosion, and modify the engine air intake heater thermostat installation, in accordance with Bombardier Service Bulletin 84-30-10, Revision E, dated October 10, 2014.
(1) If the skin corrosion is 0.001 inch deep or less, before further flight remove the corrosion and treat bare metal in accordance with Bombardier Service Bulletin 84-30-10, Revision E, dated October 10, 2014.
(2) If the skin corrosion is greater than 0.001 inch deep, before further flight, repair using a method approved by the Manager, New York Aircraft Certification Office (ACO), ANE-170, Transport Airplane Directorate, FAA; or Transport Canada Civil Aviation (TCCA); or Bombardier, Inc.'s TCCA Design Approval Organization (DAO).
This paragraph provides credit for actions required by paragraphs (g) and (h) of this AD, if those actions were performed before the effective date of this AD using the service information identified in paragraphs (i)(1) through (i)(5) of this AD. This service information is not incorporated by reference in this AD.
(1) Bombardier Service Bulletin 84-30-10, dated September 07, 2007, provided that the thermostat location label is replaced in accordance with the accomplishment instruction of Bombardier Service Bulletin 84-30-10, Revision E, dated October 10, 2014, within the compliance times specified in paragraph (g) of this AD.
(2) Bombardier Service Bulletin 84-30-10, Revision A, dated April 07, 2008.
(3) Bombardier Service Bulletin 84-30-10, Revision B, dated January 20, 2010.
(4) Bombardier Service Bulletin 84-30-10, Revision C, dated July 14, 2011.
(5) Bombardier Service Bulletin 84-30-10, Revision D, dated December 20, 2011.
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian AD CF-2015-24, dated August 24, 2015, for related information. This MCAI may be found in the AD docket on the Internet at
(2) For service information identified in this AD, contact Bombardier, Inc., Q-Series Technical Help Desk, 123 Garratt Boulevard, Toronto, Ontario M3K 1Y5, Canada; telephone: 416-375-4000; fax: 416-375-4539; email:
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM); withdrawal.
This action withdraws the NPRM published in the
May 2, 2016.
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
An NPRM was published in the
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the NPRM for FR Doc. FAA-2015-1649, Airspace Docket No. 15-AGL-6, as published in the
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854; 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
Office of the Secretary, Department of Transportation.
Notice of negotiated rulemaking (Reg-Neg) committee membership and public meeting.
The Department of Transportation (“Department” or “DOT”) announces the appointment of members to the Advisory Committee on Accessible Air Transportation (ACCESS Advisory Committee). The ACCESS Advisory Committee was established to negotiate and develop a proposed rule concerning accommodations for air travelers with disabilities addressing inflight entertainment (IFE), accessible lavatory on new single-aisle aircraft, and service animals. Additionally, DOT announces that the first meeting of the ACCESS Advisory Committee will be held on May 17 and 18, 2016. The meeting is open to the public for its entirety.
The first meeting of the ACCESS Advisory Committee will be held on May 17 and 18, 2016, from 9:00 a.m. to 5:00 p.m., Eastern Time.
The meeting will be held at the Omni Shoreham Hotel, 2500 Calvert Street NW., Washington, DC 20001, 202-234-0700, in the Diplomat Room. Attendance is open to the public up to the room's capacity of 150 attendees. Since space is limited, any member of the general public who plans to attend this meeting must notify the registration contact identified below no later than May 10, 2016.
To register to attend the meeting, please contact Alyssa Battle (
On December 7, 2015, the Department published a notice in the
Based on the convening report, the comments received on the December notice, and on the statutory factors in the Negotiated Rulemaking Act (5 U.S.C. 563), DOT decided that it would be in the public interest to establish a negotiated rulemaking committee with a narrower scope. On April 7, 2016, DOT announced that it would establish a Reg-Neg committee to negotiate and develop proposed amendments to the Department's disability regulation on three issues: Whether to require accessible inflight entertainment (IFE) and strengthen accessibility requirements for other in-flight communications; whether to require an accessible lavatory on new single-aisle aircraft over a certain size; and whether to amend the definition of “service animals” that may accompany passengers with a disability on a flight.
The ACCESS Advisory Committee is established by charter in accordance with the Federal Advisory Committee Act (FACA), 5 U.S.C. App. 2. Secretary of Transportation Anthony Foxx approved the ACCESS Advisory Committee charter on April 6, 2016. In accordance with section 14 of FACA, the charter provides for the ACCESS Advisory Committee to terminate when the stated objectives of the Committee have been accomplished (
In its April 7th
DOT proposed for public comment the following tentative list of stakeholder categories to be members of the Committee: DOT; airlines; cross-disability advocacy groups; consumer groups; professional associations of flight attendants; advocacy groups for blind and visually impaired individuals; advocacy groups representing service animal users; advocacy groups for representing people with psychiatric disabilities; providers, manufactures, or experts of IFE products, systems, and services; advocacy groups representing deaf and hard of hearing individuals; academic or non-profit institutions having technical expertise in accessibility research and development; aircraft manufacturers; and advocacy groups representing individuals with mobility disabilities. DOT stated that Committee members will be selected to represent not only the interest of that individual's own organization but rather the collective stakeholder interests of organizations in the same stakeholder category. DOT also noted that all individuals or organizations who wished to be selected to serve on the Committee should submit an application regardless of whether their stakeholder category appeared on list.
After a careful review of all the individuals nominated to be ACCESS Advisory Committee members, the Secretary of Transportation hereby appoints the following members:
The meeting will be open to the public. Attendance will necessarily be limited by the size of the meeting room (maximum 150 attendees). Since space is limited, we ask that any member of the general public who plans to attend the first meeting notify the registration contact, contact Alyssa Battle (
The Committee will dedicate a substantial amount of time at the first meeting to establishing the rules, procedures, and process of the Committee, such as outlining the voting rights of the Committee members and defining the meaning of “consensus.”
Members of the public may submit written comments on the topics to be considered during the meeting by May 10, 2016, to Federal Docket Management System (FDMC), Docket Number DOT-OST-2015-0246. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. DOT recommends that you include your name and a mailing address, an email address, or a phone number in the body
To submit your comment online, go to
To view comments and any documents mentioned in this preamble as being available in the docket, go to
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
DOT anticipates that the ACCESS Advisory Committee will have five additional two-day meetings in Washington, DC. The meetings are tentatively scheduled for following dates: Second meeting, June 14-15; third meeting, July 11-12; fourth meeting, August 16-17; fifth meeting, September 22-23, and the sixth and final meeting, October 13-14. Notices of all future meetings will be published in the
Notice of this meeting is being provided in accordance with the Federal Advisory Committee Act and the General Services Administration regulations covering management of Federal advisory committees.
Issued under the authority of delegation in 49 CFR 1.27(n).
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve and disapprove portions of revisions to the Texas State Implementation Plan (SIP) pertaining to the Texas New Source Review (NSR) program submitted on March 13, 1996; July 22, 1998; September 11, 2000; September 4, 2002; and October 5, 2010. Specifically, the EPA is proposing to approve the severable portions of the amendments to the General Definitions for the Texas NSR program, and the Minor NSR Qualified Facilities Program. The EPA is proposing to disapprove a severable portion of the General Definition of “modification of existing facility” submitted on October 5, 2010. We are taking these actions under section 110, parts C and D of the Clean Air Act (CAA).
Written comments must be received on or before June 1, 2016.
Submit your comments, identified by Docket No. EPA-R06-OAR-2010-0861, at
Ms. Adina Wiley, (214) 665-2115,
Throughout this document wherever “we,” “us,” or “our” is used, we mean the EPA.
The Act at Section 110(a)(2)(C) requires states to develop and submit to the EPA for approval into the SIP, preconstruction review and permitting programs applicable to certain new and modified stationary sources of air pollutants for attainment/unclassifiable and nonattainment areas that cover both major and minor new sources and modifications, collectively referred to as the NSR SIP. The CAA NSR SIP program is composed of three separate programs: Prevention of Significant Deterioration (PSD), Nonattainment New Source Review (NNSR), and Minor NSR. PSD is established in part C of title I of the CAA and applies in areas that meet the NAAQS—“attainment areas”—as well as areas where there is insufficient information to determine if the area meets the NAAQS—“unclassifiable areas.” The NNSR SIP program is established in part D of title I of the CAA and applies in areas that are not in attainment of the NAAQS—
The General Definitions germane to the implementation of the Texas NSR Program are contained in the Texas Administrative Code (TAC) at 30 TAC Section 116.10. The October 5, 2010, submitted revisions include substantive revisions to the definition of “Best Available Control Technology (BACT)”, substantive revisions to the definition of “modification of existing facility”, deletion of definitions specific to the Minor NSR Qualified Facilities Program that have been moved to a new section for Qualified Facilities definitions, non-substantive edits to improve clarity throughout the definitions, and renumbering of the existing SIP-approved definitions to account for the other edits. On March 25, 2011, the TCEQ resubmitted the revisions to the General Definitions at 30 TAC Section 116.10 that were submitted on March 13, 1996; July 22, 1998; September 11, 2000; September 4, 2002. As such, the portions of these prior submittals that have not already been addressed by the EPA are before us for review.
The Texas Minor NSR Qualified Facilities Program was authorized under Texas Senate Bill 1126, 74th Texas Legislature, to create a streamlined Minor NSR mechanism to authorize minor changes at existing facilities that are not subject to federal major source requirements under PSD or NNSR. The program authorizes changes at existing permitted facilities by allowing the participating facilities to trade permitted emission allowables. Changes at qualified facilities cannot result in the emission of an air contaminant not previously emitted, the construction of a new facility, a reduction in emission control efficiency, a net increase in allowable emissions, or any increases in actual emissions that exceed applicable major source thresholds.
Requirements for the renewal of air permits issued under 30 TAC Chapter 116 are provided under 30 TAC Chapter 116, Division D. The EPA has SIP-approved the majority of this division; the exception being the provision in 30 TAC Section 116.311 exempting changes authorized as a qualified facility from the requirement to obtain a permit renewal. The revisions remaining before us pertaining to Qualified Facilities were submitted to 30 TAC Section 116.311 on July 22, 1998 and September 4, 2002.
The TCEQ revised the General Definitions at 30 TAC Section 116.10 on September 5, 2010 and submitted these revisions for inclusion in the Texas NSR SIP on October 5, 2010. The TCEQ submitted a clarification letter to the EPA on March 25, 2011, that resubmitted prior rulemakings addressing the General Definitions at 30 TAC Section 116.10; specifically the rulemakings and records associated with SIP submittals dated March 13, 1996; July 22, 1998; September 11, 2000; and September 4, 2002. We note that the July 22, 1998 submittal repealed and replaced the March 13, 1996 submittal of 30 TAC Section 116.10. Therefore, the EPA has determined that the March 13, 1996 revisions to 30 TAC Section 116.10 are no longer before us for review. We are only addressing the pieces of the General Definition submittals that have yet to be finally acted upon by the EPA.
The EPA has taken several actions over the years to approve and disapprove specific components of the General Definitions into the Texas SIP. Our actions are dated August 28, 2007 (72 FR 49198); April 14, 2010 (75 FR 19468); and November 17, 2011 (76 FR 71260). The Technical Support Document (TSD) accompanying this proposal provides a detailed history of our past actions.
Today's proposal addresses the remaining submitted revisions to the General Definitions from July 22, 1998 through the current version of the General Definitions submitted on October 5, 2010. The following is a summary of the EPA's evaluation of the submitted revisions to the General Definitions.
• On October 5, 2010, the TCEQ submitted a substantive revision to the definition of “best available control technology (BACT)” at 30 TAC Section 116.10(1). The definition initially submitted on July 22, 1998 at 30 TAC Section 116.10(3) was disapproved by the EPA on September 15, 2010.
• On October 5, 2010, the TCEQ submitted substantive revisions to the NSR definition of “modification of existing facility” at 30 TAC Section 116.10(9). The EPA has approved portions of this definition into the Texas SIP, but we are proposing to act on the remaining components of this definition as initially adopted on June 17, 1998 and submitted July 22, 1998; as further revised through submittals dated September 11, 2000; September 4, 2002; and October 5, 2010. The EPA proposes to approve the outstanding provisions in the definition of “modification of existing facility” at 30 TAC Section 116.10(9) as submitted on October 5, 2010, as a portion of the Texas NSR program, with the exception of the
○ 30 TAC Section 116.10(9)(A) provides for the use of permits by rule (PBRs) to be used for the insignificant increases of already authorized air contaminants. The EPA has SIP-approved the Texas PBR program under 30 TAC Chapter 106 as a component of the Texas Minor NSR program. As such, we find that use of a PBR for insignificant increases for an already authorized air contaminant should not be considered as part of the modification of an existing facility. We are proposing approval of this provision as initially adopted on June 17, 1998 and submitted on July 22, 1998; and further revised on September 15, 2010 and submitted on October 5, 2010.
○ The current Texas SIP includes the definition of “modification of existing facilities” at 30 TAC Section 116.10(11)(C) and (D). On October 5, 2010, the TCEQ submitted non-substantive renumbering of these provisions to new 30 TAC Section 116.10(9)(B) and (C) as adopted on September 15, 2010. This non-substantive renumbering is approvable.
○ 30 TAC Section 116.10(9)(D) establishes the criteria for a facility to become “qualified.” This definition is necessary for the implementation of the Texas Minor NSR Qualified Facilities Program and is therefore approvable under 40 CFR 51.160 as defining the scope of the Minor NSR program;
○ 30 TAC Section 116.10(9)(E) is already SIP-approved with respect to flexible permits.
○ 30 TAC Section 116.10(9)(F) provides for modifications to be made at natural gas processing facilities without a case-by case permit.
• On October 5, 2010, the TCEQ submitted a new definition of “qualified facility” at 30 TAC Section 116.10(14); this definition is necessary for the implementation of the Texas Minor NSR Qualified Facilities Program and is therefore approvable under 40 CFR 51.160 as defining the scope of the Minor NSR program.
• On October 5, 2010, the TCEQ also submitted non-substantive edits to the opening paragraph of the General Definitions to clarify an acronym and renumbering throughout the section of the existing SIP-approved definitions: “dockside vessel,” “dockside vessel emissions,” “facility,” “federally enforceable,” “grandfathered facility,” “lead smelting plant,” “maximum allowable emissions rate table (MAERT),” “new facility,” “new source,” “nonattainment area,” “public notice,” and “source”. These non-substantive edits are approvable.
On April 14, 2010, the EPA disapproved the Texas Qualified Facilities Program as submitted by the TCEQ on March 13, 1996; repealed and re-adopted on June 17, 1998, submitted on July 22, 1998; and revised on September 11, 2000 and September 4, 2002.
On October 5, 2010, the TCEQ submitted a revised Qualified Facilities Program to address the April 14, 2010, identified deficiencies. Our evaluation demonstrates that the TCEQ has appropriately limited the Qualified Facilities Program to Minor NSR by requiring that each proposed change conduct a separate applicability determination under PSD and NNSR to ensure no federal major source permitting requirements are circumvented. The Texas Qualified Facilities Program enables an existing permitted facility to increase allowable emissions, provided that another permitted facility has a corresponding decrease in permit allowable emissions; resulting in no net increase in permitted emission allowables.
The EPA is also reviewing revisions to the Permit Renewal Application procedures at 30 TAC Section 116.311. The TCEQ initially submitted a revision on July 22, 1998, at 30 TAC Section 116.311(a)(1) to specify that changes authorized under a qualified facility are not subject to the permit renewal requirements under 30 TAC Chapter 116. This provision was renumbered in the September 4, 2002 submittal to 30 TAC Section 116.311(a)(2). Changes authorized under the Qualified Facilities Program are made enforceable by revisions to the underlying Chapter 116 permits or Chapter 106 PBR registration. Because there is not a specific permit issued for a Qualified Facility transaction, there is no “Qualified Facility permit” subject to permit renewal requirements. Rather, the underlying permits under Chapter 116 remain subject to the permit renewal requirements. Note that the permit renewal requirements at 30 TAC Section 116.311 do not apply to PBRs authorized under 30 TAC Chapter 106 or any portion of the Qualified Facility transaction authorized under 30 TAC Chapter 106. However, the federal regulations under the CAA do not require a permit renewal process for an approved NSR program.
Because a change authorized under the Qualified Facilities Program does not result in a specific permit modification, such a change is not subject to the permit renewal requirements because there is not a permit action to renew. However, the underlying permit terms remain subject to the applicable permit renewal requirements.
Under Section 110(l), the EPA cannot propose to approve a SIP revision that has not been developed with reasonable notice and public hearing. Nor can we propose to approve a revision that will worsen air quality. The October 5, 2010, submitted revisions to the Texas SIP were developed using the Texas SIP-approved process with adequate notice and comment procedures. Our analysis also indicates that the General Definitions, with the exception of the portion of “modification of existing facilities” pertaining to natural gas processing facilities, are necessary to implement the CAA required title I permitting programs in Texas. As such, these General Definitions will support the state's air quality programs and will not interfere with attainment, reasonable further progress or any other applicable requirements of the CAA. Additionally, the Minor NSR Qualified Facilities Program establishes a mechanism to allow modifications at existing, permitted facilities to occur without a permit revision by requiring an increase in permitted emission allowables to be offset by a corresponding decrease in permitted emission allowables at the same facility. Because the facilities participating in the Qualified Facilities Program have been previously authorized under SIP-approved permitted mechanisms, the permitted emission allowables have been developed such that there is no interference with attainment, reasonable further progress or any other applicable requirement of this chapter. Therefore, the EPA proposes to find that approval and implementation of the Qualified Facilities Program will not result in degradation of air quality.
Section 110(k)(3) of the Act states that the EPA may partially approve and partially disapprove a SIP submittal if we find that only a portion of the submittal meets the requirements of the Act. We are proposing to determine that the majority of the October 5, 2010 revision to the Texas SIP is approvable because the submitted rules are adopted and submitted in accordance with the CAA and are consistent with the EPA's regulations regarding NSR and Minor NSR. Therefore, the EPA proposes to approve the following as a revision to the Texas SIP under section 110 and parts C and D of the CAA:
• Substantive and non-substantive revisions to the General Definitions at 30 TAC Section 116.10, as initially adopted on June 17, 1998 and submitted on July 22, 1998 and revised through the October 5, 2010 submittal, with the exception of 30 TAC Section 116.10(9)(F). Note that 30 TAC Section 116.10(5)(F) has not been submitted or proposed for inclusion in the Texas SIP.
• New section 30 TAC Section 116.17 establishing the definitions for the Minor NSR Qualified Facilities Program as adopted by the State on September 15, 2010 and submitted on October 5, 2010.
• Substantive revisions to 30 TAC Section 116.116(e)(1)-(e)(11) creating the Texas Minor NSR Qualified Facilities Program as adopted by the State on September 15, 2010 and submitted on October 5, 2010.
• New section 30 TAC Section 116.117 establishing the documentation and notification requirements for the Minor NSR Qualified Facilities Program as adopted by the State on September 15, 2010 and submitted on October 5, 2010. Note that 30 TAC Section 116.117(a)(4)(B) has not been submitted or proposed for inclusion in the Texas SIP.
• The SIP narrative titled “Revisions to the State Implementation Plan (SIP) Concerning the Qualified Facility Program as Authorized by Senate Bill 1126” as submitted on October 5, 2010.
• Revisions to 30 TAC Section 116.311(a)(2) as adopted by the State on June 17, 1998 and submitted on July 22,
The EPA's approval, if finalized, would not make federally enforceable any Qualified Facility actions that were authorized by the State before the EPA's final approval of the Qualified Facilities Program is effective. The EPA is also proposing, that upon the final approval of today's action, we will amend 40 CFR 52.2273(b) to reflect that the Texas Minor NSR Qualified Facilities Program is an approved component of the Texas SIP. We also are proposing to delete 40 CFR 52.2273(d)(1) because the EPA is now proposing approval of the general definition of BACT.
We are also proposing to disapprove the severable portion of the definition of “modification of existing facility” at 30 TAC Section 116.10(9)(F) pertaining to natural gas processing facilities as submitted on October 5, 2010. The EPA previously disapproved this provision on November 17, 2011. The state resubmitted the provision on October 5, 2010, unchanged with the exception of numbering and provided no additional evidence to substantiate inclusion in the Texas Minor NSR program or to address the anti-backsliding requirements under CAA section 110(l). As such, we continue to believe that this provision is not clearly limited to Minor NSR and should be disapproved as inconsistent with the requirements of section 110 of the Act and the EPA's regulations under 40 CFR 51.160 through 51.164 regarding Minor NSR. The provision in subparagraph (F) in the definition of “modification of existing facility” that we are proposing to disapprove was not submitted to meet a mandatory requirement of the CAA. Therefore, if the EPA takes final action to disapprove subparagraph (F), no sanctions or Federal Implementation Plan clocks will be triggered.
At this time the EPA is also proposing several unrelated corrections to the Texas SIP to accurately reflect recent federal final actions.
• We are proposing to correct 40 CFR 52.2270(c) to include 30 TAC Section 116.112 as part of the Texas SIP. On December 7, 2005, the EPA approved 30 TAC Section 116.112—Distance Limitations as adopted by the TCEQ on January 14, 2004.
• The EPA is also proposing to correct 40 CFR 52.2270(c) to include the date and
• Additionally, the EPA is proposing to delete 40 CFR 52.2273(d)(4)(viii) because of our March 30, 2015 final approval.
• Finally, we are proposing to clarify the SIP status of 30 TAC Section 116.110(c). This section was returned to the TCEQ on June 29, 2011, as it was inappropriately submitted for inclusion in the Texas SIP. As such, we propose to revise 40 CFR 52.2270(c) to specify that 30 TAC Section 116.110(c) is not in the SIP.
In this action, we are proposing to include in a final rule regulatory text that includes incorporation by reference. In accordance with the requirements of 1 CFR 51.5, we are proposing to incorporate by reference revisions to the Texas regulations as described in the Proposed Action section above. We have made, and will continue to make, these documents generally available electronically through
This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.
This action does not impose an information collection burden under the PRA. There is no burden imposed under the PRA because this action merely proposes to approve state permitting provisions that are consistent with the CAA and disapprove state permitting provisions that are inconsistent with the CAA.
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action merely proposes to approve state permitting provisions that are consistent with the CAA and disapprove state permitting provisions that are inconsistent with the CAA; therefore this action will not impose any requirements on small entities.
This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local or tribal governments or the private sector. This action merely proposes to approve state permitting provisions that are consistent with the CAA and disapprove state permitting provisions that are inconsistent with the CAA; and therefore will have no impact on small governments.
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
This action does not have tribal implications as specified in Executive Order 13175. This action does not apply on any Indian reservation land, any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction, or non-reservation areas of Indian country. Thus, Executive Order 13175 does not apply to this action.
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may
This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
This rulemaking does not involve technical standards.
The EPA believes the human health or environmental risk addressed by this action will not have potential disproportionately high and adverse human health or environmental effects on minority, low-income or indigenous populations. This action merely proposes to approve state permitting provisions that are consistent with the CAA and disapprove state permitting provisions that are inconsistent with the CAA.
Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
42 U.S.C. 7401
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing a limited disapproval of a revision to the Arizona Department of Environmental Quality (ADEQ) portion of the Arizona State Implementation Plan (SIP) under the Clean Air Act (CAA or Act). This ADEQ-submitted SIP revision primarily was intended to serve as a replacement of ADEQ's SIP-approved rules for the issuance of New Source Review (NSR) permits for stationary sources, including but not limited to the rules governing the review and permitting of major sources and major modifications under the Act. This action concerns only the major nonattainment NSR provisions in ADEQ's submittal as they pertain to the Nogales and West Central Pinal nonattainment areas for particulate matter with a diameter of 2.5 micrometers or less (PM
Comments must arrive by June 1, 2016.
Submit your comments, identified by Docket ID No. EPA-R09-OAR-2015-0187 at
Lisa Beckham, EPA Region IX, (415) 972-3811,
Throughout this document, “we,” “us,” and “our” refer to the EPA.
On July 28, 2011 and October 29, 2012, ADEQ submitted revisions to the ADEQ portion of the Arizona SIP for EPA approval under the CAA. On May 16, 2014, ADEQ supplemented the July 28, 2011 submittal. On September 6, 2013, July 2, 2014, and February 16, 2015, ADEQ supplemented the October 29, 2012 submittal. Collectively, these submittals generally comprise ADEQ's current program for preconstruction review and permitting of new or modified stationary sources under ADEQ's jurisdiction in Arizona. On November 2, 2015, the EPA finalized a limited approval and limited disapproval, and other actions, for these submittals. See our final rule at 80 FR 67319 (Nov. 2, 2015) and proposed rule at 80 FR 14044 (Mar. 18, 2015). The EPA is now taking further action related to these submittals. The specific rules that were reviewed as part of these submittals and our previous action, and which are the subject of this action, can be found in Table 1 of the preamble to our November 2, 2015 final rule (80 FR 67320).
The SIP submittals that are the subject of this action and our 2015 proposed and final rules, referred to herein as the
Please see our previous proposed and final actions for the NSR SIP submittal—Revisions to Air Plan; Arizona; Stationary Sources; New Source Review—for a detailed description of the actions taken to date related to these submittals, including the docket for these actions (Docket ID No. EPA-R09-OAR-2015-0187 at
On December 28, 2012, April 29, 2013, and December 2, 2014, ADEQ's July 28, 2011, October 29, 2012, and July 2, 2014 submittals, respectively, were deemed complete by operation of law to meet the completeness criteria in 40 CFR part 51, appendix V, which must be met before formal EPA review. Each of these submittals includes evidence of public notice and adoption of the relevant ADEQ regulations.
The purpose of this EPA rulemaking is solicit comment on whether the major nonattainment NSR portion of ADEQ's NSR SIP submittal fully meets the permitting requirements for PM
At this time the EPA is evaluating whether ADEQ's NSR SIP submittal meets certain permitting requirements for PM
As explained further below, in order to meet the evaluation criteria in CAA section 189(e) for PM
On January 4, 2013, the U.S. Court of Appeals for the District of Columbia Circuit, in
ADEQ's NSR SIP submittal generally includes requirements for the PM
Although ADEQ's NSR SIP submittal does include regulation of major sources of SO
The evaluation of which precursors need to be controlled to achieve a NAAQS in a particular nonattainment area is typically conducted in the context of the state's preparing and the EPA's reviewing an area's attainment plan SIP. In this case, there are two designated PM
Although the EPA has not yet re-promulgated these PM
Pursuant to Section 110(k) of the Act, and for the reasons provided above, we are proposing a limited disapproval of the major source nonattainment NSR provisions of ADEQ's NSR SIP submittal for the Nogales and West Central Pinal PM
If finalized as proposed, our limited disapproval action will trigger an obligation on the EPA to promulgate a Federal Implementation Plan unless Arizona corrects the deficiencies that are the bases for this limited disapproval, and the EPA approves the related plan revisions, within two years of the final action. Additionally, the offset sanction in CAA section 179(b)(2) would apply in the nonattainment areas at issue 18 months after the effective date of a final limited disapproval, and the highway funding sanctions in CAA section 179(b)(1) would apply in these areas six months after the offset sanction is imposed. However, neither sanction will be imposed under the CAA if Arizona submits, and we approve, prior to the implementation of the sanctions, SIP revisions that correct the deficiencies that we identify in a final action. The EPA is working with ADEQ to correct the deficiencies identified in this action in a timely manner.
We will accept comments from the public on the proposed disapproval for the next 30 days.
Additional information about these statutes and Executive Orders can be found at
This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.
This action does not impose an information collection burden under the PRA because this action does not impose additional requirements beyond those imposed by state law.
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities beyond those imposed by state law.
This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. This action does not impose additional requirements beyond those imposed by state law. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, will result from this action.
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
This action does not have tribal implications, as specified in Executive Order 13175, because the SIP is not approved to apply on any Indian 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.
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it does not impose additional requirements beyond those imposed by state law.
This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
Section 12(d) of the NTTAA directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. The EPA believes that this action is not subject to the requirements of section 12(d) of the NTTAA because application of those requirements would be inconsistent with the CAA.
The EPA lacks the discretionary authority to address environmental justice in this rulemaking.
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve the serious nonattainment area reasonable further progress (RFP) plan for the Baltimore serious nonattainment area for the 1997 8-hour ozone national ambient air quality standard (NAAQS). The SIP revision includes 2011 and 2012 RFP milestones, contingency measures for failure to meet RFP, and updates to the 2002 base year inventory and the 2008 reasonable RFP plan previously approved by EPA. EPA is also proposing to approve the transportation conformity motor vehicle emissions budgets (MVEBs) associated with this revision. This action is being taken under the Clean Air Act (CAA).
Written comments must be received on or before June 1, 2016.
Submit your comments, identified by Docket ID No. EPA-R03-OAR-2015-0788 at
Maria A. Pino, (215) 814-2181, or by email at
In 1997, EPA revised the health-based NAAQS for ozone, setting it at 0.08 parts per million (ppm) averaged over an 8-hour time frame.
On April 30, 2004, EPA finalized its attainment/nonattainment designations for areas across the country with respect to the 1997 8-hour ozone standard. 69 FR 23858. These actions became effective on June 15, 2004. Among those
Pursuant to Phase 1 of the 8-hour ozone implementation rule for the 1997 8-hour ozone NAAQS, an area was classified under Subpart 2 of the CAA based on its 8-hour design value if that area had a 1-hour design value at or above 0.121 ppm (the lowest 1-hour design value in Table 1 of Subpart 2).
The Baltimore Area did not attain the 1997 8-hour ozone NAAQS by June 2010. However, the area was eligible for a one-year extension of its attainment date, from June 15, 2010 to June 15, 2011. EPA granted that attainment date extension on March 11, 2011. 76 FR 13289. The extension was based on the air quality data for the 4th highest daily 8-hour monitored value during the 2009 ozone season.
The Baltimore Area also did not attain the 1997 8-hour ozone NAAQS by June 2011. The area did not qualify for a second one-year extension of its attainment date, based on air quality data monitored during the 2009 and 2010 ozone seasons. Therefore, on February 1, 2012, EPA made a determination that the Baltimore Area did not attain the 1997 8-hour ozone NAAQS by its attainment date. 77 FR 4901. As a result of this determination, the Baltimore Area was reclassified by operation of law as a serious 8-hour ozone nonattainment area for the 1997 8-hour ozone standard.
On May 26, 2015, EPA determined that the Baltimore Area attained the 1997 8-hour ozone NAAQS, based on monitored ambient air quality data for the 2012-2014 monitoring period. 80 FR 29970. Under the provisions of EPA's ozone implementation rule (40 CFR 51.918), when EPA issues a determination that an area is attaining the relevant standard, that determination suspends the area's obligations to submit an attainment demonstration, reasonably available control measures (RACM), RFP plan, contingency measures and other planning requirements under part D of title I of the CAA related to attainment of the 1997 8-hour ozone NAAQS for as long as the area continues to attain the standard.
Section 182 of the CAA and EPA's 1997 8-hour ozone regulations (40 CFR 51.910) require each moderate and above 8-hour ozone nonattainment area to submit an emissions inventory and RFP SIP revision that describes how the area will achieve actual emissions reductions of volatile organic compounds (VOC) and nitrogen oxides (NO
EPA's Phase 1 Final Rule for Implementation of the 8-hour Ozone Standard (Phase 1 Rule), published on April 30, 2004, set out criteria for classifying nonattainment areas under the 1997 8-hour ozone standard. 69 FR 23951. The Phase 1 Rule also addressed revocation of the 1-hour ozone NAAQS; how anti-backsliding principles will ensure continued progress toward attainment of the 8-hour ozone NAAQS; attainment dates; and the timing of emissions reductions needed for attainment. On November 29, 2005, EPA published the Phase 2 Rule. 70 FR 71612. The Phase 2 Rule addressed the RFP control and planning obligations as they apply to areas designated nonattainment for the 1997 8-hour ozone NAAQS. The Phase 2 Rule was revised on June 8, 2007. 72 FR 31727. Among other things, the Phase 1 and 2 Rules outline the SIP requirements and deadlines for various requirements in areas designated as nonattainment for the 1997 8-hour ozone NAAQS. The rules set a due date of June 15, 2007 for the required base year emission inventory, RFP plan, modeling and attainment demonstration, RACM, MVEBs, and contingency measures (40 CFR 51.908(a), (c)).
On June 4, 2007, Maryland submitted a comprehensive SIP revision request to address moderate area ozone requirements for the Baltimore Area. That 2007 “Moderate Area Plan” SIP revision request included the 2002 base year emissions inventory, a 2008 RFP plan, including a 2008 ozone projected emission inventory, a RACM analysis, an attainment demonstration (including modeling and weight of evidence), a 2009 attainment year inventory, contingency measures for RFP and attainment, and 2008 and 2009 MVEBs for the Baltimore Area. On June 4, 2010, EPA approved the 2002 base year inventory, RFP plan up to 2008, RFP contingency measures, RACM demonstration, and 2008 MVEBs associated with the 2007 moderate area SIP revision submittal. 75 FR 31709.
On July 22, 2013, the Maryland Department of the Environment (MDE) submitted the SIP revision, “Baltimore Serious Nonattainment Area 0.08 ppm 8-Hour Ozone State Implementation Plan Demonstrating Rate of Progress for 2008, 2011 and 2012 Revision to 2002 Base Year Emissions; and Serious Area Attainment Demonstration, SIP Number: 13-07,” (the Serious Area Plan). That SIP revision submittal included updates to the 2002 base year emissions inventory and 2008 RFP plan that EPA previously approved into the Maryland SIP, RFP for 2011 and 2012, an attainment demonstration, including modeling and weight of evidence, RFP and attainment contingency measures, a RACM determination, and 2012 MVEBs. After EPA determined Baltimore had attained the 1997 8-hour ozone standard, Maryland, by letter dated October 20, 2015, withdrew the attainment demonstration, including modeling and weight of evidence, contingency measures for attainment, and the RACM analysis from consideration as a SIP revision. Therefore, those elements are not addressed in this rulemaking action.
EPA's analysis and findings are discussed in this proposed rulemaking, and a more detailed discussion is contained in the Technical Support Documents (TSD) for this proposed rulemaking action, which is available online at
An emissions inventory is a comprehensive, accurate, and current inventory of actual emissions from all sources. The emissions inventory is required by section 172(c)(3) of the CAA. For ozone nonattainment areas, the emissions inventory needs to contain VOC and NO
In its Serious Area Plan for the Baltimore area, Maryland updated the 2002 base year inventory. The update was needed to reflect the change to EPA's approved model for onroad mobile sector emissions, from the Mobile Source Emission Factor Model (MOBILE) to the Motor Vehicle Emission Simulator (MOVES) model, as well as updates to EPA's NONROAD model. The updated 2002 base year inventory is discussed in Section 3 of Maryland's Serious Area Plan.
A summary of the approved and updated Baltimore Area 2002 base year VOC and NO
EPA reviewed Maryland's updates to its 2002 base year inventory for the Baltimore Area using the appropriate EPA policy and guidance, and found MDE's procedures, methodologies, and results for the Baltimore Area 2002 base year inventory to be reasonable. A detailed evaluation of the emissions inventories contained in the Serious Area Plan is contained in a separate November 9, 2015 technical support document, entitled “Technical Support Document (TSD) for the Baltimore Nonattainment Area 8-Hour Ozone State Implementation Plan: Demonstrating Rate of Progress for 2008, 2011, and 2012; Revision to 2002 Base Year Emissions; and Serious Area Attainment Demonstration,” (the Baltimore Serious Area Emissions Inventory TSD), which is available online at
The Baltimore Area was originally classified as moderate for the 19978-hour ozone NAAQS. As such, the CAA requires a 15 percent (%) reduction in ozone precursor emissions over an initial 6-year period. In the Phase 2 Rule, EPA interpreted this requirement for areas that were also designated nonattainment and classified as moderate or higher for the 1-hour ozone standard. In the Phase 2 Rule, EPA provided that an area classified as moderate or higher that has the same boundaries as an area, or is entirely composed of several areas or portions of areas, for which EPA fully approved a 15% plan for the 1-hour ozone NAAQS, is considered to have met the requirements of section 182(b)(1) of the CAA for the 8-hour NAAQS for the 15% reduction in ozone precursor emissions. In this situation, a moderate nonattainment area is subject to RFP under section 172(c)(2) of the CAA and shall submit, no later than 3 years after designation for the 8-hour NAAQS, a SIP revision that meets the requirements
The Baltimore Area was classified as severe under the 1-hour ozone standard, and had the same boundary as the Baltimore Area under the 1997 8-hour ozone standard. On July 12, 1995, Maryland submitted a 15% Plan SIP revision for the Baltimore Area. On February 2, 2000, EPA approved Maryland's 15% plan for the Baltimore severe 1-hour ozone nonattainment area. 65 FR 5252. Therefore, according to the Phase 2 Rule, the RFP plan for the Baltimore Area may use either NO
On June 4, 2010, EPA approved Maryland's moderate area RFP that provided for a 15% emissions reduction from 2002 to 2008, contained in the Moderate Area Plan. 75 FR 31709. Maryland, however, needed to update the 2008 target levels for its Serious Area Plan because they are the basis for the new 2011 and 2012 target level calculations for RFP. In the Serious Area Plan, MDE updated its 15% RFP plan to reflect EPA's change from MOBILE to MOVES for onroad emission modeling and updates to EPA's NONROAD model.
Maryland set out its calculations for the adjusted base year inventory and 2008 RFP target levels in Section 5 of Maryland's Serious Area Plan. EPA previously approved 2008 RFP for the Baltimore Area.
Maryland describes its methods used for developing its 2008 projected VOC and NO
To determine if 2008 RFP is met in the Baltimore Area, the total projected controlled emissions must be compared to the 2008 target levels of emissions. As shown in Table 4, the Serious Area Plan demonstrates that sufficient emission reductions occurred between 2002 and 2008 to meet the 2008 RFP target levels. Thus, EPA proposes to approve the Baltimore Area's revised 2008 RFP.
Serious 8-hour ozone nonattainment areas are subject to RFP requirements in section 182(c)(2)(B) of the CAA that require an average of 3% per year of VOC and/or NO
2011 and 2012 target levels are calculated in the same manner as the 2008 targets, except that the baseline is the previous target level, not the 2002 base year inventory. The 2008 target levels are thus used as the basis for calculating 2011 targets. Similarly, 2011 target levels are used to calculate the 2012 targets.
2011 and 2012 RFP calculations can be found in Sections 6 and 7 of the Serious Area Plan, respectively. In the TSD prepared for this rulemaking action, EPA reviewed the 2011 and 2012 target levels calculations in the Serious Area Plan, summarized in Table 5, and determined that they were done correctly and are approvable and therefore EPA proposes to approve them.
Maryland describes its methods used for developing its 2011 and 2012 projected VOC and NO
Projected controlled 2011 and 2012 emissions for the Baltimore Area are summarized in the Serious Area Plan, in Tables 4-6 and 4-7, respectively. That data is presented in Table 6.
To determine if 2011 and 2012 RFP is met in the Baltimore Area, the total projected controlled emissions must be compared to the target levels calculated in the previous section of this rulemaking. As shown in Table 7, the Serious Area Plan demonstrates that sufficient emission reductions occurred between 2008 and 2011 and between 2011 and 2012 to meet the 2011 and 2012 RFP target levels. Therefore, the Serious Area Plan demonstrates 2011 and 2012 RFP in the Baltimore Area, and EPA proposes to approve the 2011 and 2012 RFP in the Serious Area Plan.
Emission reductions to meet RFP must be from permanent and enforceable emission control measures.
The control measures for which Maryland took credit in order to meet the RFP requirement in the Baltimore Area are described in Section 8 of the Serious Area Plan. To meet the RFP requirement for the Baltimore Area, Maryland used a combination of point, onroad mobile, nonroad mobile, and area source control measures as described in this section of this rulemaking action.
The onroad mobile measures Maryland used to meet RFP in the Baltimore Area include enhanced vehicle inspection and maintenance (enhanced I/M), Tier I vehicle emission standards and new federal evaporative test procedures (Tier I), reformulated gasoline, the national low emission vehicle (NLEV) program, and the federal heavy-duty diesel engine (HDDE) rule. Maryland calculated the emission reductions for 2008, 2011, and 2012 RFP using the MOVES model for these onroad mobile measures. EPA reviewed the procedures that MDE used to develop its projected inventories, including the use of the MOBILE model, and found them to be reasonable. For details on EPA's analysis, see the Baltimore Serious Area Emissions Inventory TSD.
The area source measures Maryland used to meet RFP in the Baltimore Area include four Ozone Transport Commission (OTC) rules, Commercial and Consumer Products (Phases 1 and 2), Architectural and Industrial Maintenance Coatings (AIM), Portable Fuel Containers (PFC) (Phases 1 and 2), and Industrial Adhesives and Sealants. In the TSD for this action, EPA evaluated each of these measures and calculated the emission reductions for each measure, and finds the emission reductions Maryland claimed for these measures to be reasonable.
The non-road mobile measures Maryland used to meet RFP in the Baltimore Area include Non-Road Small Gasoline Engines, Non-Road Diesel Engines (Tier I and Tier II), Marine Engine Standards, Emissions Standards for Large Spark Ignition Engines, and Reformulated Gasoline Use in Non-Road Motor Vehicles and Equipment. Maryland used the EPA NONROAD model to calculate 2008, 2011, and 2012 RFP emission reductions for these measures. As discussed in the Baltimore Serious Area Emissions Inventory TSD, EPA reviewed the procedures that MDE used to develop its projected inventories, including the use of the NONROAD model, and found them to be reasonable.
Maryland took credit for one point source measure in its RFP plan, the Maryland Healthy Air Act (HAA). In the Baltimore Area, the sources covered by the HAA are Brandon Shores and H.A. Wagner in Anne Arundel County andC.P. Crane in Baltimore County. In the TSD for this action, EPA evaluated this measure and verified Maryland's calculated emission reductions from the affected sources covered by the HAA and found the emission reductions reasonable.
Table 8 summarizes the emission reductions achieved by each measure, as calculated by Maryland in the Serious Area Plan.
Projected emissions for both VOC and NO
EPA notes that Maryland was not required to demonstrate 2008 RFP, because EPA previously approved 2008 RFP for the Baltimore Area.
Section 182(c) of the CAA requires a state with a moderate or above ozone nonattainment area to include in its SIP, among other things, sufficient additional contingency measures in its RFP plan in case the area fails to meet any applicable milestone.
EPA's May 26, 2015 determination that the Baltimore Area attained the 1997 8-hour ozone NAAQS suspends certain planning requirements, including contingency measures, for the 1997 8-hour ozone NAAQS for as long as the area continues to meet that NAAQS. 80 FR 29970. Considering the most recent ambient air quality monitoring data, the Baltimore Area continues to meet the 1997 8-hour NAAQS. Therefore, no contingency measures are required to address requirements in sections 172 or 182 of the CAA.
Maryland's Serious Area Plan contains contingency measures for failure to meet the 2012 RFP milestone. The Serious Area Plan relies on the excess emission reductions from the same measures used to meet the RFP targets in order to meet the contingency measure target. This is acceptable under EPA's early implementation policy, set out in the August 13, 1993 memorandum from G.T. Helms, entitled, “Early Implementation of Contingency Measures for Ozone and Carbon Monoxide (CO) Nonattainment Areas.” Maryland chose to split the 3% contingency requirement equally between VOC and NO
As shown in Table 11, the Serious Area Plan achieved more than enough emission reductions to meet the contingency measure requirement for the 2012 milestone year for the Baltimore Area. Therefore, EPA proposes to approve Maryland's contingency measures from the Serious Area Plan as SIP strengthening measures.
Transportation conformity is required by section 176(c) of the CAA. EPA's conformity rule requires that transportation plans, programs and projects conform to state air quality implementation plans and establishes the criteria and procedure for determining whether or not they do. Conformity to a SIP means that transportation activities will not produce new air quality violations, worsen existing violations, or delay timely attainment of the national ambient air quality standards.
States must establish VOC and NO
MDE discusses transportation conformity in Section 10 of the Baltimore Serious Area Plan. MDE, in consultation with the Baltimore Regional Transportation Board (BRTB), established MVEBs for 2012. MDE calculated the 2012 mobile emissions inventory using EPA's MOVES and the Highway Performance Monitoring System (HPMS) models. MDE describes its methods in Appendix E of the Baltimore Serious Area Plan.
The MVEBs are the amount of emissions allowed in the SIP for onroad motor vehicles; it establishes an emissions ceiling for the regional transportation network. The 2012 MVEBs for the Baltimore Area are 93.5 tpd NO
On November 23, 2015, as part of the adequacy process, EPA posted the availability of the 2012 MVEBs on EPA's Web site for the purpose of soliciting public comments.
The MVEBs which EPA has determined to be adequate are identical to the projected controlled 2012 onroad mobile source emissions for the Baltimore Area in the Serious Area Plan. In addition to the budgets being adequate for transportation conformity purposes, EPA found the procedures Maryland used to develop the MVEBs to be reasonable. For more information on EPA's analysis, see EPA's TSD available in the docket for this rulemaking. Because the 2012 RFP MVEBs are adequate for transportation conformity purposes and the methods MDE used to develop them are correct, the 2012 RFP MVEBs are approvable.
EPA has reviewed the RFP plan for the Baltimore Area, submitted in the Serious Area Plan, including updates to
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable federal regulations. 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. Accordingly, this action merely approves state law as meeting federal requirements and does not impose additional requirements 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
• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this proposed rule, pertaining to the Baltimore Area serious RFP plan, inventories, RFP contingency measures, and MVEBs, does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Ozone, Volatile organic compounds.
42 U.S.C. 7401
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) proposes to approve the state implementation plan (SIP) revision submitted by the State of Maryland for the purpose of updating their state board requirements. The SIP revision removes the current SIP approved state board requirements and replaces them with an updated version of the requirements. The new provisions continue to address state board requirements for all the National Ambient Air Quality Standards (NAAQS). The revision is being done because the Maryland legislature revised Maryland's statutory requirements related to state boards and the state wants the most recent version in their SIP. In the Final Rules section of this
Comments must be received in writing by June 1, 2016.
Submit your comments, identified by Docket ID No. EPA-R03-OAR-2016-0127 at
Ruth Knapp, (215) 814-2191, or by email at
For further information, please see the information provided in the direct final action, with the same title, that is located in the “Rules and Regulations” section of this
Agricultural Marketing Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), this notice announces the Agricultural Marketing Service's (AMS) intention to request approval from the Office of Management and Budget (OMB) for an extension of a currently approved information collection for the Reporting and Recordkeeping Requirements Under Regulations Under the Perishable Agricultural Commodities Act, 1930, as amended.
Comments received by July 1, 2016 will be considered.
The law provides a forum for resolving contract disputes, and a mechanism for the collection of damages from anyone who fails to meet contractual obligations. In addition, the PACA provides for prompt payment to fruit and vegetable sellers and for revocation of licenses and sanctions against firms or principals found to have violated the law's standards for fair business practices. The PACA also imposes a statutory trust that attaches to perishable agricultural commodities received by regulated entities, products derived from the commodities, and any receivables or proceeds from the sale of the commodities. The trust exists for the benefit of produce suppliers, sellers, or agents that have not been paid, and continues until they have been paid in full.
The PACA is enforced through a licensing system. All commission merchants, dealers, and brokers engaged in business subject to the PACA must be licensed. Retailers and grocery wholesalers must renew their licenses every three years. All other licensees renew yearly. Those who engage in practices prohibited by the PACA may have their licenses suspended or revoked.
The information collected pursuant to OMB Number 0581-0031 is used to administer licensing provisions under the PACA, to adjudicate contract disputes, and to enforce the PACA and the regulations. The purpose of this notice is to solicit comments from the public concerning our information collection.
We estimate the paperwork and time burden of the above referenced information collection to be as follows:
Comments are invited on: (1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of the burden of the proposed collection of information including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other
All responses to this notice will be summarized and included in the request for OMB approval. All comments will become a matter of public record.
Notice.
The Department of Commerce (DOC) is currently seeking applications for membership on the National Advisory Council on Innovation and Entrepreneurship (NACIE). NACIE advises the Secretary of Commerce (the Secretary) on matters related to accelerating innovation and entrepreneurship.
Applications must be received by the Office of Innovation and Entrepreneurship (OIE), Economic Development Administration (EDA) by 11:59 p.m. Eastern Time on June 1, 2016, to be considered for membership in the formation of this NACIE cohort. Applications received by June 1, 2016, will also be considered to fill vacancies up to one year after this NACIE cohort's formation.
Please submit applications electronically to
For further information, interested parties can contact the Office of Innovation and Entrepreneurship via post at 1401 Constitution Avenue NW., Suite 78018, Washington, DC 20230; via telephone at +1 (202) 482-8001; or via email at
The Office of Innovation and Entrepreneurship (OIE) is accepting applications for membership on the National Advisory Council on Innovation and Entrepreneurship (NACIE) for a two-year term beginning on the date of appointment. Members will be selected, in accordance with Department of Commerce (DOC) guidelines, based on their ability to advise the Secretary of Commerce (the Secretary) on matters relating to the acceleration of innovation and the support for and expansion of entrepreneurship, including but not limited to the matters set forth in 15 U.S.C. 3720(b) and
NACIE will identify and recommend solutions to issues critical to driving the innovation economy, including enabling entrepreneurs and firms to successfully access and develop a skilled, globally competitive workforce. NACIE will also serve as a vehicle for ongoing dialogue with the innovation, entrepreneurship, and workforce development communities, including but not limited to business and trade associations. The duties of NACIE are solely advisory, and it shall report to the Secretary through the Economic Development Administration (EDA) and the Office of the Secretary.
NACIE members shall be selected in a manner that ensures that NACIE is balanced in terms of perspectives and expertise with regard to innovation, entrepreneurship, and business-driven talent development that leads to a globally competitive workforce. To that end, the Secretary seeks diversity in the size of organization represented and seeks to appoint members who represent diverse geographies and innovation and entrepreneurship experiences from industry, government, academia, nonprofits, and non-governmental organizations.
Additional factors which may be considered in the selection of NACIE members include each candidate's proven experience in the design, creation, or improvement of innovation systems; commercialization of research and development; entrepreneurship; business-driven talent development that leads to a globally competitive workforce; and the creation and growth of innovation- and entrepreneurship-focused ecosystems. Members' affiliations may include, but are not limited to, successful executive-level business leaders; entrepreneurs; innovators; investors; post-secondary education leaders; directors of workforce and training organizations; and other experts drawn from industry, government, academia, philanthropic foundations with a demonstrated track record of research or support of innovation and entrepreneurship, and non-governmental organizations. Nominees will be evaluated consistent with factors specified in this notice and their ability to carry out the goals of NACIE.
Self-nominations will be accepted.
Appointments will be made without regard to political affiliation.
Appointments of members to NACIE will be made by the Secretary.
Omron Automotive Electronics, Inc. (Omron), an operator of FTZ 22, submitted a notification of proposed production activity to the FTZ Board for its facility located in St. Charles, Illinois, within FTZ 22. The notification conforming to the requirements of the regulations of the FTZ Board (15 CFR 400.22) was received on April 14, 2016.
The Omron facility is located within Site 41 of FTZ 22. The facility is used for the production of automotive electronic components. Pursuant to 15 CFR 400.14(b), FTZ authority would be limited to the specific foreign-status components and specific finished products described in the submitted notification (as described below) and subsequently authorized by the FTZ Board.
Production under FTZ procedures could exempt Omron from customs duty payments on the foreign status components used in export production. On its domestic sales, Omron would be able to choose the duty rate during customs entry procedures that applies to electronic control units (body control, transmission, wiper system), controllers (fuel pump, alarm, tire pressure), electronic modules, assemblies (tire pressure monitoring, transmitters, electrical switches (accessory, power seat, power window), knobs and trim pieces, and actuators (duty rate ranges from free to 6.5%) for the foreign status components noted below. Customs duties also could possibly be deferred or reduced on foreign status production equipment.
The materials and components sourced from abroad include: Resistors; actuators; housing subassemblies; adhesives; antennas; armatures; plastic bags; switches; bobbins; steel balls; barrels with ribs; plastic bases/trays/bags/plates/plungers/actuator posts; base covers/substrates/assemblies; bases; knobs; bezels; boxes and related spacers; buttons; brackets; buzzers; ceramic chips; capacitors; cages for batteries; cartons; cases; chipboards and pads; desiccants; clips; connectors; coils; coil leads/terminals/assemblies; contacts (rivet, terminal); core pins; covers; central processing units (CPUs); electronic control units (ECUs); elastomeric pads; plastic emblems; encoders; epoxy resins; electric filters; foam sheets/dividers/pads; foil with adhesive; followers; frets; fuses; crystal oscillators; transformers; integrated circuits; resistors; dampers; double face pads; detents; diodes; door lock packing inserts; garnishes; gimbles; rubber grommets; labels; handles; heat sinks; housing blocks/assemblies; housings; integrated circuits; light emitting diodes; immobilizers/anti-theft systems; inductors; inner cases; inserts; inverters; jewels; transmitter keypads and keyrings; logic chips; lamps; lean containers; levers; lids; light guides; linear integrated circuits; semiconductors; magnet wires and relays; multi-switch units; power supplies; printed circuit boards; padding and pads; paddles (steering wheel); plastic panels/partitions; pins (coil, connector; spring); pipe lights; packaging boxes/lids/inserts/chips/pads; printed wiring boards; resistor chips; resistor glaze metal; relays; retainers; plastic rings/screws/spacers/spools/seals/sliders/seats/clips/bezels/tape; seals (nitrile, rubber); heat shields; shrouds; shunts; silicone fluid compound; surface mount technology resistors; electrical (socket) outlets; springs; striker assemblies; subassemblies (base, case, power breaker, dome, window knob); substrates; supply bezels/brackets/clips/screws/head bolts; varistors; switch assemblies; tapes; terminal/contact assemblies; terminals; thermistors; paint thinners; thumbwheels; screws; transistors; trays; upfitter subassemblies; vacform trays; wire coils; jumper wires; wireless charging units; relay yokes; and, yokes (duty rate ranges from free to 8%).
Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary at the address below. The closing period for their receipt is June 13, 2016.
A copy of the notification will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 21013, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230-0002, and in the “Reading Room” section of the FTZ Board's Web site, which is accessible via
For further information, contact Pierre Duy at
Deere & Company (Deere), operator of Subzone 133D, submitted a notification of proposed production activity to the FTZ Board for its facilities within Subzone 133D, located in Davenport, Iowa. The notification conforming to the requirements of the regulations of the FTZ Board (15 CFR 400.22) was received on April 15, 2016.
Deere already has authority to produce motor graders, four wheel drive loaders, log skidders and articulated dump trucks within Subzone 133D. The current request would add construction and forestry equipment and foreign-status materials/components to the scope of authority. Pursuant to 15 CFR 400.14(b), additional FTZ authority would be limited to the specific foreign-
Production under FTZ procedures could exempt Deere from customs duty payments on the foreign-status materials/components used in export production. On its domestic sales, Deere would be able to choose the duty rates during customs entry procedures that apply to: Wheeled feller bunchers; disc saw felling heads; and, cabs for knuckleboom loaders, backhoes, loaders, motor graders, feller bunchers, log skidders and articulated dump trucks (duty rates: Free or 4%) for the foreign-status materials/components noted below and in the existing scope of authority. Customs duties also could possibly be deferred or reduced on foreign-status production equipment.
The materials/components sourced from abroad include: Plastic ribbed conduits/labels/anti-skid pads/floor mat plugs/spacers/ashtrays/rings; nylon domed plugs; rubber hoses/elbows/belts/v-belts/tires/floor mats/O-rings/O-ring kits/PTO (power take-off) housings/gaskets/seals/seal kits/sealing trims/isolators/ring guides/air deflectors/arched covers/insulators/grommets/isolator strips/bellows/bellow boots/spacers/splash guards/step straps/stop bumpers/tray foot bumpers/vibration dampeners; cork gaskets; paper gaskets; glass rear view mirrors; steel push pull cables/wiring harness cables/link chains/alloy clevis plates/clothes hooks/screws/bolts/planetary hub studs/alloy hexagon fittings/nuts/locking collars/pins/plugs/washers/G-rings/seal retainers/washer and spacer kits/pneumatic control valves/rings/alloy disk saw drive rings/pin fasteners/retainers/retainer clips/springs/spring assemblies/spring kits/alloy raw castings/adapter fittings/air conditioning fittings/spacers/clamps/beaded special adaptors/shims/corner brackets/elbow fittings/excavator thumb kits/fittings/fitting plugs/flange fitings/fuel supply banjo fittings/hose clamps/hydraulic clamp kits/lock kits/lower carrier plates/lubrication fittings/mounting adapters/oil line tube assemblies/oil tubes/plates/plugs with O-ring fittings/power link casting assemblies/PTO flanges/pushbeam trunnions/serrated yoke flanges/skid shoes/straps/steering column sleeves/toolboxes/toolbox covers/tubes/tube fittings/clamp halves/upper carrier plates/valve section plug kits/weldment adapters; iron lock plates/mounting adapters; brass washers; copper electrical connector accessories; aluminum washers; tooth kits; tooth inserts; lock-ring tools; cutting blades; cutting edges; bucket tooth locks; bucket weldment hinges; exterior steel hinges; gas-operated cylinders; brackets; latches; engine mount supports; gear case isolators; hood catch assemblies; hood compartment studs; hood springs; interior cab handles; mounting parts; oscillation stops; rear suspension stops; rubber boom stops; sliding window catches; filler caps; diesel engines; air intakes; cylinder covers; cylinder heads; engine cooler clamps; exhaust elbows; gas outlet tubes; high pressure fuel lines; intake manifolds; oil pans; orifices; pistons; piston ring kits; rotate manifolds; seal rings; seal liner rings; short block assemblies; spacer tubes; threaded inserts; timing gear covers; lumber fork cylinders; master brake cylinders; hydraulic cylinders; thumb kit clamps; hydraulic motors; brake cylinders; dust covers; hydraulic cylinder rod guides; steering cylinder rods; cooler bypass manifolds; hydraulic manifolds; pressure manifolds; hydraulic reservoirs; pumps (fuel injection, fuel, oil, water, hydraulic, steering metering); pump repair kits; DEF (diesel exhaust fluid) lines; heat sleeves; drive shafts; hydraulic reservoirs; air conditioner compressors; HVAC (heating, venting and air conditioning) blowers; turbochargers; compressor kits; fan blades; fan drives; piston-liner kits; air conditioners (AC); HVAC equipment; vapor condensers; AC/heater evaporators; refrigerant hoses; Hayden coolers; filters (fuel, hydraulic, oil, air, reservoir breather, pneumatic exhaust, headlight venting); oil filter elements; receiver-dryers; pre-filters; air dryers; filter discs; filter elements; filter heads; oil filter covers; strainers; transmission shafts; catwalk platforms; counterweight weldments; jib booms; main booms; outrigger stabilizers; rotary manifolds for forestry equipment; bucket plates; loader buckets; loader cutting edges; grapple hooks; multi-purpose buckets; backhoe buckets; excavator buckets; skid steer buckets; dura-max cutting edges; backhoe hydraulic clamp kits; axle stop blocks; battery boxes; controller arm supports; cooler tubes; exhaust tubes; front axle limited slip differentials; fuel tank assemblies; grapple teeth; grille frames; grommet plates; heater/AC brackets; lower carrier plates; oil lines; outrigger arms; pedal and bracket assemblies; pilot arm strut supports; rear axles; scarifier booms; seat swivel assemblies; sliding frames; soft start brackets; steering columns; support plates; tie rod assemblies; tie rod ends; upper carrier plates; valve mounting plates; moldboards; air intake plates; air plenums; yoke assemblies; axle drive housings; axle oscillation supports; axles with differentials; baffle structures; baffle supports; battery service doors; boom crossmember tubes; bottom guard supports; brake pistons; brake rotors; brush guards; bucket teeth; bucket tooth adapters; bulkhead assembly plates; bumper brackets; cast mounts; cast steps; clamp rings; controller brackets; counterweights; covers; cover plate kits; cutting edges; decomposition tubes; DEF tank lid covers; differential case covers; differential housings; drive damper covers; end bits; end kits; engine mount supports; engine side shield supports; exhaust aftertreatment brackets; exhaust nozzles; exhaust support brackets; fan guards; filter supports; floor plates; fork tine assemblies; frame kits; front axles; fuel line filters; fuel tank bracket plates; fuel tank guards; generator pump drive supports; guard extensions; hand rails; heat shield mount plates; hood supports; housings with covers; hub kingpins; hydraulic reservoirs; insert support plates; isolators; lift arms; lift lug plates; main drive axles and tandem pivot; mount frames; mounting plates; multifunction cab levers; oil coolers; outlet duct plates; overlay end bits; pilot tower arms; pump spacers; pushbeam trunnions; radiators; rear axle guards; rear tube guards; ripper shanks; ripper teeth; scarifier links; scarifier retainers; side cutter plates; side shield bumpers; sidecutter shrouds; skid plates; slide weldment supports; step assemblies; rubber stop bumpers; steering stop bumpers; supports; threaded stud bumpers; transmission guard shields; transmission mounts; wear plates; rear wheel gauge frames; ripper points; safety trip standards; wheel plates; scraper arms; 180 degree tubes; adaptor plates; arm assemblies; arm kits; boom assembly adapters; disc saw felling head link assemblies; hydraulic system assembly tubes; axle guards; axles with differential; boom adapters; boom tubes; butt plates; cab guards; casting covers; charge air tubes; clean out covers; cooling return tubes; crank bars; disc saw felling head frames; engine mount supports; felling heads; filter box covers; frame guard doors; front shields for forestry equipment; fuel fill covers; fuel tanks; harvesting arm housings; hose guide plate guards; hose straps; hydraulic pump supports; hydraulic reservoirs for forestry equipment; hydraulic system tubes; hydraulic tank covers; hydraulic tubes; inner arm housings; knuckleboom lower frames; lift arm bellcranks; lift arm shims; lift links; link assemblies; log forks; main boom hydraulics tubes; main cylinder
Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary at the address below. The closing period for their receipt is June 13, 2016.
A copy of the notification will be available for public inspection at the Office of the Executive Secretary,
For further information, contact Diane Finver at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Every five years, pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”), the Department of Commerce (“the Department”) and the International Trade Commission automatically initiate and conduct a review to determine whether revocation of a countervailing or antidumping duty order or termination of an investigation suspended under section 704 or 734 of the Act would be likely to lead to continuation or recurrence of dumping or a countervailable subsidy (as the case may be) and of material injury.
The following Sunset Reviews are scheduled for initiation in June 2016 and will appear in that month's Notice of Initiation of Five-Year Sunset Review (“Sunset Review”).
No Sunset Review of countervailing duty orders is scheduled for initiation in June 2016.
No Sunset Review of suspended investigations is scheduled for initiation in June 2016.
The Department's procedures for the conduct of Sunset Reviews are set forth in 19 CFR 351.218. The Notice of Initiation of Five-Year (“Sunset”) Reviews provides further information regarding what is required of all parties to participate in Sunset Reviews.
Pursuant to 19 CFR 351.103(c), the Department will maintain and make available a service list for these proceedings. To facilitate the timely preparation of the service list(s), it is requested that those seeking recognition as interested parties to a proceeding contact the Department in writing within 10 days of the publication of the Notice of Initiation.
Please note that if the Department receives a Notice of Intent to Participate from a member of the domestic industry within 15 days of the date of initiation, the review will continue. Thereafter, any interested party wishing to participate in the Sunset Review must provide substantive comments in response to the notice of initiation no later than 30 days after the date of initiation.
This notice is not required by statute but is published as a service to the international trading community.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (“the Department”) has received requests to conduct administrative reviews of various antidumping and countervailing duty orders and findings with March anniversary dates. In accordance with the Department's regulations, we are initiating those administrative reviews.
Effective May 2, 2016.
Brenda E. Waters, Office of AD/CVD Operations, Customs Liaison Unit, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230, telephone: (202) 482-4735.
The Department has received timely requests, in accordance with 19 CFR 351.213(b), for administrative reviews of various antidumping and countervailing duty orders and findings with March anniversary dates.
All deadlines for the submission of various types of information, certifications, or comments or actions by the Department discussed below refer to the number of calendar days from the applicable starting time.
If a producer or exporter named in this notice of initiation had no exports, sales, or entries during the period of review (“POR”), it must notify the Department within 30 days of publication of this notice in the
In the event the Department limits the number of respondents for individual examination for administrative reviews initiated pursuant to requests made for
In the event the Department decides it is necessary to limit individual examination of respondents and conduct respondent selection under section 777A(c)(2) of the Act:
In general, the Department has found that determinations concerning whether particular companies should be “collapsed” (
Pursuant to 19 CFR 351.213(d)(1), a party that has requested a review may withdraw that request within 90 days of the date of publication of the notice of initiation of the requested review. The regulation provides that the Department may extend this time if it is reasonable to do so. In order to provide parties additional certainty with respect to when the Department will exercise its discretion to extend this 90-day deadline, interested parties are advised that the Department does not intend to extend the 90-day deadline unless the requestor demonstrates that an extraordinary circumstance has prevented it from submitting a timely withdrawal request. Determinations by the Department to extend the 90-day deadline will be made on a case-by-case basis.
In proceedings involving non-market economy (“NME”) countries, the Department begins with a rebuttable presumption that all companies within the country are subject to government control and, thus, should be assigned a single antidumping duty deposit rate. It is the Department's policy to assign all exporters of merchandise subject to an administrative review in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate.
To establish whether a firm is sufficiently independent from government control of its export activities to be entitled to a separate rate, the Department analyzes each entity exporting the subject merchandise under a test arising from the
All firms listed below that wish to qualify for separate rate status in the administrative reviews involving NME countries must complete, as appropriate, either a separate rate application or certification, as described below. For these administrative reviews, in order to demonstrate separate rate eligibility, the Department requires entities for whom a review was requested, that were assigned a separate rate in the most recent segment of this proceeding in which they participated, to certify that they continue to meet the criteria for obtaining a separate rate. The Separate Rate Certification form will be available on the Department's Web site at
Entities that currently do not have a separate rate from a completed segment of the proceeding
For exporters and producers who submit a separate-rate status application or certification and subsequently are selected as mandatory respondents, these exporters and producers will no longer be eligible for separate rate status unless they respond to all parts of the questionnaire as mandatory respondents.
In accordance with 19 CFR 351.221(c)(1)(i), we are initiating administrative reviews of the following antidumping and countervailing duty orders and findings. We intend to issue the final results of these reviews not later than March 31, 2017.
None.
During any administrative review covering all or part of a period falling between the first and second or third and fourth anniversary of the publication of an antidumping duty order under 19 CFR 351.211 or a determination under 19 CFR 351.218(f)(4) to continue an order or suspended investigation (after sunset review), the Secretary, if requested by a domestic interested party within 30 days of the date of publication of the notice of initiation of the review, will determine, consistent with
For the first administrative review of any order, there will be no assessment of antidumping or countervailing duties on entries of subject merchandise entered, or withdrawn from warehouse, for consumption during the relevant provisional-measures “gap” period, of the order, if such a gap period is applicable to the POR.
Interested parties must submit applications for disclosure under administrative protective orders in accordance with 19 CFR 351.305. On January 22, 2008, the Department published
On April 10, 2013, the Department published
Any party submitting factual information in an antidumping duty or countervailing duty proceeding must certify to the accuracy and completeness of that information.
On September 20, 2013, the Department modified its regulation concerning the extension of time limits for submissions in antidumping and countervailing duty proceedings:
These initiations and this notice are in accordance with section 751(a) of the Act (19 U.S.C. 1675(a)) and 19 CFR 351.221(c)(1)(i).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Brenda E. Waters, Office of AD/CVD Operations, Customs Liaison Unit, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230, telephone: (202) 482-4735.
Each year during the anniversary month of the publication of an antidumping or countervailing duty order, finding, or suspended investigation, an interested party, as defined in section 771(9) of the Tariff Act of 1930, as amended (“the Act”), may request, in accordance with 19 CFR 351.213, that the Department of Commerce (“the Department”) conduct an administrative review of that antidumping or countervailing duty order, finding, or suspended investigation.
All deadlines for the submission of comments or actions by the Department discussed below refer to the number of calendar days from the applicable starting date.
In the event the Department limits the number of respondents for individual examination for administrative reviews initiated pursuant to requests made for the orders identified below, the Department intends to select respondents based on U.S. Customs and Border Protection (“CBP”) data for U.S. imports during the period of review. We intend to release the CBP data under Administrative Protective Order (“APO”) to all parties having an APO within five days of publication of the initiation notice and to make our decision regarding respondent selection within 21 days of publication of the initiation
In the event the Department decides it is necessary to limit individual examination of respondents and conduct respondent selection under section 777A(c)(2) of the Act:
In general, the Department finds that determinations concerning whether particular companies should be “collapsed” (
Pursuant to 19 CFR 351.213(d)(1), a party that requests a review may withdraw that request within 90 days of the date of publication of the notice of initiation of the requested review. The regulation provides that the Department may extend this time if it is reasonable to do so. In order to provide parties additional certainty with respect to when the Department will exercise its discretion to extend this 90-day deadline, interested parties are advised that, with regard to reviews requested on the basis of anniversary months on or after May 2016, the Department does not intend to extend the 90-day deadline unless the requestor demonstrates that an extraordinary circumstance prevented it from submitting a timely withdrawal request. Determinations by the Department to extend the 90-day deadline will be made on a case-by-case basis.
The Department is providing this notice on its Web site, as well as in its “Opportunity to Request Administrative Review” notices, so that interested parties will be aware of the manner in which the Department intends to exercise its discretion in the future.
None.
In accordance with 19 CFR 351.213(b), an interested party as defined by section 771(9) of the Act may request in writing that the Secretary conduct an administrative review. For both antidumping and countervailing duty reviews, the interested party must specify the individual producers or exporters covered by an antidumping finding or an antidumping or countervailing duty order or suspension agreement for which it is requesting a review. In addition, a domestic interested party or an interested party described in section 771(9)(B) of the Act must state why it desires the Secretary to review those particular producers or exporters. If the interested party intends for the Secretary to review sales of merchandise by an exporter (or a producer if that producer also exports merchandise from other suppliers) which was produced in more than one country of origin and each country of origin is subject to a separate order, then the interested party must state specifically, on an order-by-order basis, which exporter(s) the request is intended to cover.
Note that, for any party the Department was unable to locate in prior segments, the Department will not accept a request for an administrative review of that party absent new information as to the party's location. Moreover, if the interested party who files a request for review is unable to locate the producer or exporter for which it requested the review, the interested party must provide an explanation of the attempts it made to locate the producer or exporter at the same time it files its request for review, in order for the Secretary to determine if the interested party's attempts were reasonable, pursuant to 19 CFR 351.303(f)(3)(ii).
As explained in
Further, as explained in
Following initiation of an antidumping administrative review when there is no review requested of the NME entity, the Department will instruct CBP to liquidate entries for all exporters not named in the initiation notice, including those that were suspended at the NME entity rate.
All requests must be filed electronically in Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (“ACCESS”) on Enforcement and Compliance's ACCESS Web site at
The Department will publish in the
For the first administrative review of any order, there will be no assessment of antidumping or countervailing duties on entries of subject merchandise entered, or withdrawn from warehouse, for consumption during the relevant provisional-measures “gap” period of
This notice is not required by statute but is published as a service to the international trading community.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
In accordance with section 751(c) of the Tariff Act of 1930, as amended (“the Act”), the Department of Commerce (“the Department”) is automatically initiating the five-year review (“Sunset Review”) of the antidumping and countervailing duty (“AD/CVD”) order(s) listed below. The International Trade Commission (“the Commission”) is publishing concurrently with this notice its notice of
Effective (May 1, 2016).
The Department official identified in the
The Department's procedures for the conduct of Sunset Reviews are set forth in its
In accordance with 19 CFR 351.218(c), we are initiating Sunset Reviews of the following antidumping and countervailing duty order(s):
As a courtesy, we are making information related to sunset proceedings, including copies of the pertinent statute and Department's regulations, the Department's schedule for Sunset Reviews, a listing of past revocations and continuations, and current service lists, available to the public on the Department's Web site at the following address: “
This notice serves as a reminder that any party submitting factual information in an AD/CVD proceeding must certify to the accuracy and completeness of that information.
On April 10, 2013, the Department modified two regulations related to AD/CVD proceedings: The definition of factual information (19 CFR 351.102(b)(21)), and the time limits for the submission of factual information (19 CFR 351.301).
Pursuant to 19 CFR 351.103(d), the Department will maintain and make available a public service list for these proceedings. Parties wishing to participate in any of these five-year reviews must file letters of appearance as discussed at 19 CFR 351.103(d)). To facilitate the timely preparation of the public service list, it is requested that those seeking recognition as interested parties to a proceeding submit an entry of appearance within 10 days of the publication of the Notice of Initiation.
Because deadlines in Sunset Reviews can be very short, we urge interested parties who want access to proprietary information under administrative protective order (“APO”) to file an APO application immediately following publication in the
Domestic interested parties, as defined in section 771(9)(C), (D), (E), (F), and (G) of the Act and 19 CFR 351.102(b), wishing to participate in a Sunset Review must respond not later than 15 days after the date of publication in the
If we receive an order-specific notice of intent to participate from a domestic interested party, the Department's regulations provide that
This notice of initiation is being published in accordance with section 751(c) of the Act and 19 CFR 351.218(c).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public hearings.
The Mid-Atlantic Fishery Management Council (Council) will hold seven public hearings in May and June 2016 to solicit public input on the Unmanaged Forage Omnibus Amendment. The Council is also soliciting written comments on the amendment through 11:59 p.m. on Friday, June 17, 2016. The goal of this amendment is to prohibit the development of new and expansion of existing directed commercial fisheries on unmanaged forage species in Mid-Atlantic Federal waters until the Council has had an adequate opportunity to both assess the scientific information relating to any new or expanded directed fisheries and consider potential impacts to existing fisheries, fishing communities, and the marine ecosystem.
The public hearings will be held between May 17, 2016 and June 8, 2016. The dates and times of each hearing are listed in the
Christopher M. Moore, Ph.D., Executive Director, Mid-Atlantic Fishery Management Council, telephone: 302-526-5255. More information, including background materials, will be posted at
The Council will hold seven public hearings. The dates, times, and locations are listed below:
1. Tuesday, May 17, 2016, 6 p.m.-7:30 p.m., North Carolina Department of Marine Fisheries Washington Regional Office Hearing Room, 943 Washington Street, Washington, NC 27889; telephone: (252) 946-6481.
2. Wednesday, May 18, 2016, 6:30-8 p.m., Hilton Virginia Beach Oceanfront, 3001 Atlantic Avenue, Virginia Beach, VA 23451; telephone: (757) 213-3000.
3. Thursday, May 19, 2016, 6:30-8 p.m., Stockton Seaview Hotel and Golf Club, 401 South New York Road, Galloway, NJ 08205; telephone: (855) 894-8698.
4. Monday, May 23, 2016, 6 p.m.-7:30 p.m., University of Rhode Island Bay Campus Corless Auditorium, 215 South Ferry Road, Narragansett, RI 02882; telephone: (401) 874-6222.
5. Tuesday, May 24, 2016, 6:30 p.m.-8 p.m., New York Department of Environmental Conservation Bureau of Marine Resources Hearing Room, 205 North Bell Mead Road, Suite 1, East Setauket, NY 11733; telephone: (631) 444-0430.
6. Monday, June 6, 2016, 6:30-8 p.m., Hilton Suites Oceanfront, 3200 North Baltimore Avenue, Ocean City, Maryland 21842; telephone: (410) 289-6444.
7. Wednesday, June 8, 2016, 6:30 p.m.-8 p.m., Webinar. Information on how to connect to the webinar will be available on the events page of the Council Web site:
The goal of the Unmanaged Forage Omnibus Amendment is to prohibit the development of new and expansion of existing directed commercial fisheries on unmanaged forage species in Mid-Atlantic Federal waters until the Council has had an adequate opportunity to both assess the scientific information relating to any new or expanded directed fisheries and consider potential impacts to existing fisheries, fishing communities, and the marine ecosystem. This action is needed to protect the structure and function of marine ecosystems in the Mid-Atlantic and to advance an ecosystem approach to fisheries management in the Mid-Atlantic. In this context, “unmanaged”
These hearings are 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 hearing date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The Pacific Fishery Management Council's (Pacific Council) Ad Hoc Ecosystem Workgroup (EWG) will hold a webinar, which is open to the public, to discuss and draft comments on the NOAA Fisheries Climate Science Strategy (NCSS) Western Regional Action Plan (WRAP).
The webinar will be held from 1:30 to 4:30 p.m., or when business for the day is completed, on May 19, 2016.
To join the webinar visit this link:
Dr. Kit Dahl, Pacific Council Staff Officer, phone: (503) 820-2422, email:
The purpose of the webinar is for the EWG to discuss and draft comments on the NCSS WRAP. A March 22, 2016 draft of the WRAP may be downloaded at
Although nonemergency issues not contained in the meeting agenda may be discussed, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this document and any issues arising after publication of this document that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt at (503) 820-2425 at least 5 days prior to the meeting date.
Office of National Marine Sanctuaries (ONMS), National Ocean Service (NOS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce (DOC).
Notice and request for applications.
ONMS is seeking applications for vacant seats for six of its 13 national marine sanctuary advisory councils and Northwestern Hawaiian Islands Coral Reef Ecosystem Reserve Advisory Council (advisory councils). Vacant seats, including positions (
Applications are due before or by Tuesday, May 31, 2016.
Application kits are specific to each advisory council. As such, application kits must be obtained from and returned to the council-specific addresses noted below.
• Channel Islands National Marine Sanctuary Advisory Council: Jessica Morten, Channel Islands National Marine Sanctuary, 113 Harbor Way, Suite 150, Santa Barbara, CA 93109; 805-893-6433; email
• Greater Farallones National Marine Sanctuary Advisory Council: Carolyn Gibson, Greater Farallones National Marine Sanctuary, 991 Marine Drive, The Presidio, San Francisco, CA 94129; 415-970-5252; email
• Hawaiian Islands Humpback Whale National Marine Sanctuary Advisory Council: Shannon Ruseborn, NOAA Inouye Regional Center, NOS/HIHWNMS/Shannon Ruseborn, 1845 Wasp Boulevard, Building 176, Honolulu, HI 96818; 808-725-5905; email
•
• National Marine Sanctuary of American Samoa Advisory Council: Joseph Paulin, National Marine Sanctuary of American Samoa, Tauese P.F. Sunia Ocean Center, Utulei, American Samoa; 684-633-6500 extension 226; email
• Northwestern Hawaiian Islands Coral Reef Ecosystem Reserve Advisory Council: Allison Ikeda, NOAA Inouye Regional Center, NOS/ONMS/PMNM, 1845 Wasp Boulevard, Building 176, Honolulu, HI 96818; 808-725-5818; email
• Stellwagen Bank National Marine Sanctuary Advisory Council: Elizabeth Stokes, Stellwagen Bank National Marine Sanctuary, 175 Edward Foster Road, Scituate, MA 02066; 781-545-8026 extension 201; email
For further information on a particular national marine sanctuary advisory council, please contact the individual identified in the Addresses section of this notice.
ONMS serves as the trustee for a network of underwater parks encompassing more than 170,000 square miles of marine and Great Lakes waters from Washington state to the Florida Keys, and from Lake Huron to American Samoa. The network includes a system of 13 national marine sanctuaries and Papahānaumokuākea and Rose Atoll marine national monuments. National marine sanctuaries protect our nation's most vital coastal and marine natural and cultural resources, and through active research, management, and public engagement, sustain healthy environments that are the foundation for thriving communities and stable economies. One of the many ways ONMS ensures public participation in the designation and management of national marine sanctuaries is through the formation of advisory councils. National marine sanctuary advisory councils are community-based advisory groups established to provide advice and recommendations to the superintendents of the national marine sanctuaries and Papahānaumokuākea Marine National Monument on issues including management, science, service, and stewardship; and to serve as liaisons between their constituents in the community and the sanctuary. Additional information on ONMS and its advisory councils can be found at
The following is a list of the vacant seats, including positions (
Monitor
16 U.S.C. 1431
Committee for Purchase From People Who Are Blind or Severely Disabled.
Deletions from the Procurement List.
The Committee is proposing to delete services from the Procurement List that were previously provided by nonprofit agencies employing persons
Committee for Purchase From People Who Are Blind or Severely Disabled, 1401 S. Clark Street, Suite 715, Arlington, Virginia 22202-4149.
Barry S. Lineback, Telephone: (703) 603-7740, Fax: (703) 603-0655, or email
On 3/25/2016 (81 FR 16145-16146), the Committee for Purchase From People Who Are Blind or Severely Disabled published notice of proposed deletions from the Procurement List.
After consideration of the relevant matter presented, the Committee has determined that the services listed below are no longer suitable for procurement by the Federal Government under 41 U.S.C. 8501-8506 and 41 CFR 51-2.4.
I certify that the following action will not have a significant impact on a substantial number of small entities. The major factors considered for this certification were:
1. The action will not result in additional reporting, recordkeeping or other compliance requirements for small entities.
2. The action may result in authorizing small entities to provide services to the Government.
3. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 8501-8506) in connection with the services deleted from the Procurement List.
Accordingly, the following services are deleted from the Procurement List:
Consumer Product Safety Commission.
Notice.
In accordance with the requirements of the Paperwork Reduction Act (“PRA”) of 1995 (44 U.S.C. chapter 35), the Consumer Product Safety Commission (“Commission” or “CPSC”) announces that the Commission has submitted to the Office of Management and Budget (“OMB”) a request for extension of approval of a collection of information from manufacturers and importers of disposable and novelty cigarette lighters under the CPSC's regulations implementing the Safety Standard for Cigarette Lighters (16 CFR part 1210). In the
Written comments on this request for extension of approval of information collection requirements should be submitted by June 1, 2016.
Submit comments about this request by email:
For further information contact: Robert H. Squibb, Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814; (301) 504-7815, or by email to:
CPSC has submitted the following currently approved collection of information to OMB for extension:
Firms may also submit comparison lighters to demonstrate compliance with the standard. In 2015, 303 comparison lighters were reported to the CPSC. While firms bear no testing costs for comparison lighters, the burden hours for recordkeeping has been estimated at 3 hours per model. Thus, an estimated 909 hours (303 models × 3 hours) is estimated for recordkeeping for comparison lighters.
Reporting requirements for submitting forms to CPSC are estimated at one hour per model, for a total annual reporting burden on 307 hours (307 models × 1 hour).
Consumer Product Safety Commission.
Notice.
In accordance with the requirements of the Paperwork Reduction Act (“PRA”) of 1995 (44 U.S.C. chapter 35), the Consumer Product Safety Commission (“Commission” or “CPSC”) announces that the Commission has submitted to the Office of Management and Budget (“OMB”) a request for extension of approval of a collection of information regarding a form that will be used to measure child care centers' compliance with the CPSC safety standards for full-size and non-full-size cribs (16 CFR parts 1219 and 1220). In the
Written comments on this request for extension of approval of information collection requirements should be submitted by June 1, 2016.
Submit comments about this request by email:
For further information contact: Robert H. Squibb, Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814; (301) 504-7815, or by email to:
CPSC has submitted the following currently approved collection of information to OMB for extension:
Office of Science, Department of Energy.
Notice of partially-closed meeting.
This notice sets forth the schedule and summary agenda for a partially-closed meeting of the President's Council of Advisors on Science and Technology (PCAST), and describes the functions of the Council. The Federal Advisory Committee Act (Pub. L. 92-463, 86 Stat. 770) requires that public notice of these meetings be announced in the
May 20, 2016, 9:00 a.m. to 12:00 p.m.
The meeting will be held at the National Academy of Sciences, 2101 Constitution Avenue NW., Washington, DC in the Lecture Room.
Information regarding the meeting agenda, time, location, and how to register for the meeting is available on the PCAST Web site at:
The President's Council of Advisors on Science and Technology (PCAST) is an advisory group of the nation's leading scientists and engineers, appointed by the President to augment the science and technology advice available to him from inside the White House, cabinet departments, and other Federal agencies. See the Executive Order at
The public comment period for this meeting will take place on May 20, 2016 at a time specified in the meeting agenda posted on the PCAST Web site at
Please note that because PCAST operates under the provisions of FACA, all public comments and/or presentations will be treated as public documents and will be made available for public inspection, including being posted on the PCAST Web site.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Decision and order.
The U.S. Department of Energy (DOE) gives notice of a decision and order (Case No. CW-026) that grants to Whirlpool Corporation (Whirlpool) a waiver from the DOE clothes washer test procedure for determining the energy consumption of clothes washers. Under this decision and order, Whirlpool is required to test and rate its clothes washers with clothes containers greater than 6.0 cubic feet using an alternate test procedure that takes this larger capacity into account when measuring energy consumption.
This Decision and Order is effective May 2, 2016.
Mr. Bryan Berringer, U.S. Department of Energy, Building Technologies Program, Mail Stop EE-5B, Forrestal Building, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-0371. Email:
Ms. Elizabeth Kohl, U.S. Department of Energy, Office of the General Counsel, Mail Stop GC-33, Forrestal Building, 1000 Independence Avenue SW., Washington, DC 20585-0103. Telephone: (202) 586-7796. Email:
In accordance with Title 10 of the Code of Federal Regulations (10 CFR 430.27(f)(2)), DOE gives notice of the issuance of its decision and order as set forth below. The decision and order grants Whirlpool a waiver from the applicable clothes washer test procedure in 10 CFR part 430, subpart B, appendix J2 for certain basic models of clothes washers with capacities greater than 6.0 cubic feet, provided that Whirlpool tests and rates such products using the alternate test procedure described in this notice. Whirlpool's representations concerning the energy efficiency of these products must be based on testing consistent with the provisions and restrictions in the
Not later than July 1, 2016, any manufacturer currently distributing in commerce in the United States a residential clothes washer with a capacity larger than 6.0 cubic feet must submit a petition for waiver pursuant to the requirements of this section. Manufacturers not currently distributing such products in commerce in the United States must petition for and be granted a waiver prior to distribution in commerce in the United States. Manufacturers may also submit a request for interim waiver pursuant to the requirements of 10 CFR 430.27.
Title III, Part B of the Energy Policy and Conservation Act of 1975 (EPCA) (42 U.S.C. 6291-6309) established the Energy Conservation Program for Consumer Products Other Than Automobiles, a program covering most major household appliances, including the residential clothes washers.
The regulations set forth in 10 CFR 430.27 enable a person to seek a waiver from the test procedure requirements for covered products. DOE will grant a waiver if DOE determines that the basic model for which the petition for waiver was submitted contains one or more design characteristics that prevents testing of the basic model according to the prescribed test procedures, or if the prescribed test procedures may evaluate the basic model in a manner so unrepresentative of its true energy consumption characteristics as to provide materially inaccurate comparative data. 10 CFR 430.27(f)(2). DOE may grant the waiver subject to conditions, including adherence to alternate test procedures. 10 CFR 430.27(f)(2).
On November 9, 2015, Whirlpool submitted a petition for waiver from the DOE test procedure applicable to automatic and semi-automatic clothes washers as set forth in 10 CFR part 430, subpart B, appendix J2. Whirlpool requested the waiver because the mass of the test load used in the procedure, which is based on the basket volume of the test unit, is currently not defined for basket sizes greater than 6.0 cubic feet. In its petition, Whirlpool sought a waiver for the specified basic models, which have capacities greater than 6.0 cubic feet, as the current DOE test procedure specifies test load sizes only for machines with capacities up to 6.0 cubic feet. (
Table 5.1 of Appendix J2 defines the test load sizes used in the test procedure as linear functions of the basket volume. Whirlpool requested that DOE grant a waiver for testing and rating based on a revised Table 5.1. Whirlpool also requested an interim waiver from the existing DOE test procedure, which DOE granted. See 80 FR at 78208. After reviewing the alternate procedure suggested by Whirlpool, DOE granted the interim waiver because DOE concluded that it would allow for the accurate measurement of the energy use of these products, while alleviating the testing problems associated with testing clothes washers with capacities greater than 6.0 cubic feet.
Whirlpool's petition was published in the
DOE granted a waiver to Whirlpool for a similar request under Decision and Order (75 FR 69653, Nov. 15, 2010) to allow for the testing of clothes washers with container volumes between 3.8 cubic feet and 6.0 cubic feet. In addition to the previous waiver granted to Whirlpool, DOE granted waivers to LG (CW-016 (76 FR 11233, Mar. 1, 2011), CW-018 (76 FR 21879, Apr. 19, 2011), and CW-021 (76 FR 64330, Oct. 18, 2011); General Electric (75 FR 76968, Dec. 10, 2010), Samsung (76 FR 13169, Mar. 10, 2011); 76 FR 50207, Aug. 12, 2011), and Electrolux (76 FR 11440, Mar. 2, 2011) to allow for the testing of clothes washers with container volumes between 3.8 cubic feet and 6.0 cubic feet.
For the reasons set forth in DOE's March 2012 Final Rule, DOE concludes that extending the linear relationship between test load size and container capacity to larger capacities represents the best possible approach for determining load size for large capacity washers. DOE will continue to evaluate the possibility of a bias in the test procedure with respect to large capacity washers in the next revision to the DOE test procedure in appendix J2. In addition, DOE determines that testing a basic model with a capacity larger than 6.0 cubic feet using the current procedure at Appendix J2 could evaluate the basic models in a manner so unrepresentative of their true energy consumption as to provide materially inaccurate comparative data.
DOE consulted with the Federal Trade Commission (FTC) staff concerning the Whirlpool petition for waiver. The FTC staff did not have any objections to granting a waiver to Whirlpool.
After careful consideration of all the material that was submitted by Whirlpool and the Joint Commenters, the testing and analysis conducted for the March 2012 Final Rule, and
(1) The petition for waiver submitted by the Whirlpool Corporation (Case No. CW-026) is hereby granted as set forth in the paragraphs below.
(2) Whirlpool must test and rate the Whirlpool basic models specified in paragraph (3) on the basis of the current test procedure contained in 10 CFR part 430, subpart B, appendix J2, except that Table 5.1 of appendix J2 is supplemented by the following additional rows:
(3) This order applies only to the following three basic models: V15EAg50(3B); V15EBg50(3B); and V15ECg50(3B).
(5) This waiver shall remain in effect consistent with the provisions of 10 CFR 430.27.
The Federal Energy Regulatory Commission (Commission) hereby gives notice that members of the Commission and Commission staff may attend upcoming PJM Interconnection, L.L.C. (PJM) Members Committee and Markets and Reliability Committee meetings, as well as other PJM committee, subcommittee or task force meetings.
The discussions at each of the meetings described above may address matters at issue in pending proceedings before the Commission, including the following currently pending proceedings:
For additional meeting information, see:
The meetings are open to stakeholders. For more information, contact Valerie Martin, Office of Energy Market Regulation, Federal Energy Regulatory Commission at (202) 502-6139 or
This is a supplemental notice in the above-referenced proceeding of Palmco Power NH LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is May 11, 2016.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
This is a supplemental notice in the above-referenced proceeding of CNR Energy LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is May 11, 2016.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Take notice that on April 25, 2016, pursuant to Rule 207 of the Federal Energy Regulatory Commission's (Commission) Rules of Practice and Procedure,
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. Anyone filing a motion to intervene or protest must serve a copy of that document on the Petitioner.
The Commission encourages electronic submission of protests and interventions in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
This is a supplemental notice in the above-referenced proceeding of Palmco Power ME, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
The staff of the Federal Energy Regulatory Commission (FERC or Commission) has prepared an environmental assessment (EA) for the White Oak Mainline Expansion (White Oak) Project and System Reliability Project, proposed by Eastern Shore Natural Gas Company (Eastern Shore) in the above-referenced docket. Eastern Shore requests authorization to construct, install, own, operate, and maintain certain facilities located in Chester County, Pennsylvania and New Castle, Kent, and Sussex, Counties, Delaware.
The EA assesses the potential environmental effects of the construction and operation of the White Oak and System Reliability Projects in accordance with the requirements of the National Environmental Policy Act (NEPA). The FERC staff concludes that approval of the proposed projects, with appropriate mitigating measures, would not constitute a major federal action significantly affecting the quality of the human environment.
Specifically, the proposed White Oak Project includes the following facilities:
• 3.3 miles of 16-inch-diameter looping pipeline (the Daleville Loop) in Chester County, Pennsylvania;
• 2.1 miles of 16-inch-diameter looping pipeline (Kemblesville Loop) in Chester County, Pennsylvania; and
• 3,550 horsepower of additional compression at Eastern Shore's existing Delaware City Compressor Station in New Castle County, Delaware.
Specifically, the proposed System Reliability Project includes the following facilities:
• 2.5 miles of 16-inch-diameter looping pipeline (Porter Road Loop) in New Castle County, Delaware;
• 7.6 miles of 16-inch-diameter looping pipeline (Dover Loop) in Kent County, Delaware;
• installation of associated underground and aboveground facilities (two mainline valves, a meter and regulator station); and
• an additional 1,775 horsepower of compression at Eastern Shore's existing Bridgeville Compressor Station in Sussex County, Delaware.
The FERC staff mailed copies of the EA to federal, state, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American tribes; potentially affected landowners and other interested individuals and groups; newspapers and libraries in each project area; and parties to this proceeding.
In addition, the EA is available for public viewing on the FERC's Web site (
Any person wishing to comment on the EA may do so. Your comments should focus on the potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. The more specific your comments, the more useful they will be. To ensure that the Commission has the opportunity to consider your comments prior to making its decision on these projects, it is important that we receive your comments in Washington, DC on or before May 25, 2016.
For your convenience, there are three methods you can use to file your comments with the Commission. In all instances, please reference the project docket number (CP15-18-001 or CP15-498-000 [as applicable]) with your submission. The Commission encourages electronic filing of comments and has expert staff available to assist you at (202) 502-8258 or
(1) You can file your comments electronically using the eComment feature on the Commission's Web site (
(2) You can also file your comments electronically using the eFiling feature on the Commission's Web site (
(3) You can file a paper copy of your comments by mailing them to the following address: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC 20426.
Any person seeking to become a party to the proceeding must file a motion to intervene pursuant to Rule 214 of the Commission's Rules of Practice and Procedures (18 CFR 385.214).
Additional information about the projects is available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC Web site (
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. Go to
This is a supplemental notice in the above-referenced proceeding of Roswell Solar, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is May 11, 2016.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j. Deadline for filing comments, recommendations, terms and conditions, and prescriptions: 60 days from the issuance date of this notice; reply comments are due 105 days from the issuance date of this notice.
The Commission strongly encourages electronic filing. Please file comments, recommendations, terms and conditions, and prescriptions using the Commission's eFiling system at
The Commission's Rules of Practice require all intervenors filing documents with the Commission to serve a copy of that document on each person on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
k. This application has been accepted and is now ready for environmental analysis.
l. The proposed Lassen Lodge Project would consist of: (1) A 6-foot-high and 94-foot-long diversion dam; (2) an impoundment of approximately 0.5
m. A copy of the application is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's Web site at
All filings must (1) bear in all capital letters the title “COMMENTS”, “REPLY COMMENTS”, “RECOMMENDATIONS,” “TERMS AND CONDITIONS,” or “PRESCRIPTIONS;” (2) set forth in the heading the name of the applicant and the project number of the application to which the filing responds; (3) furnish the name, address, and telephone number of the person submitting the filing; and (4) otherwise comply with the requirements of 18 CFR 385.2001 through 385.2005. All comments, recommendations, terms and conditions or prescriptions must set forth their evidentiary basis and otherwise comply with the requirements of 18 CFR 4.34(b). Agencies may obtain copies of the application directly from the applicant. Each filing must be accompanied by proof of service on all persons listed on the service list prepared by the Commission in this proceeding, in accordance with 18 CFR 4.34(b), and 385.2010.
You may also register online at
n. Public notice of the filing of the initial development application, which has already been given, established the due date for filing competing applications or notices of intent. Under the Commission's regulations, any competing development application must be filed in response to and in compliance with public notice of the initial development application. No competing applications or notices of intent may be filed in response to this notice.
o.
p. A license applicant must file no later than 60 days following the date of issuance of this notice: (1) A copy of the water quality certification; (2) a copy of the request for certification, including proof of the date on which the certifying agency received the request; or (3) evidence of waiver of water quality certification.
On April 12, 2016, Summit Hydropower, Inc. (transferor) and Aspinook Hydro, LLC (transferee) filed an application for transfer of license of the Wyre Wynd Project No. 3472. The project is located on the Quinebaug River in New London County, Connecticut. The project does not occupy Federal lands.
The applicants seek Commission approval to transfer the license for the Wyre Wynd Project from the transferor to the transferee.
Deadline for filing comments, motions to intervene, and protests: 30 days from the date that the Commission issues this notice. The Commission strongly encourages electronic filing. Please file comments, motions to intervene, and protests using the Commission's eFiling system at
This is a supplemental notice in the above-referenced proceeding of Peak View Wind Energy LLC`s application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is May 11, 2016.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
This is a supplemental notice in the above-referenced proceeding of Palmco Power VA LLC`s application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is May 11, 2016.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k. Pursuant to section 4.32(b)(7) of 18 CFR of the Commission's regulations, if any resource agency, Indian Tribe, or person believes that an additional scientific study should be conducted in
l.
The Commission strongly encourages electronic filing. Please file additional study requests
m. The application is not ready for environmental analysis at this time.
n. The proposed Grant Lake Hydroelectric Project would consists of: (1) An intake structure within Grant Lake; (2) a 3,300-foot-long water conveyance; (3) a 72-inch-diameter, 150-feet-long, welded steel penstock; (4) a power house containing two 2.5 megawatt Francis turbine/generator units; (5) a 95-foot-long open channel tailrace; (6) a 3.6-acre tailrace detention pond; (6) a 1.1-mile-long, 115-kilovolt transmission line; and (7) appurtenant facilities. The project is estimated to generate an average of 18,600 megawatt hours (MWh) annually.
o. A copy of the application is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's Web site at
You may also register online at
q. Procedural schedule: The application will be processed according to the following preliminary Hydro Licensing Schedule. Revisions to the schedule will be made as appropriate.
* A deficiency letter and/or the need for additional information would result in subsequent delays to the processing schedule.
This is a supplemental notice in the above-referenced proceeding of Palmco Power RI LLC`s application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is May 11, 2016.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Environmental Protection Agency (EPA).
Notice.
EPA is required under the Toxic Substances Control Act (TSCA) to publish in the
Comments identified by the specific case number provided in this document, must be received on or before June 1, 2016.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPPT-2016-0022, and the specific PMN number or TME number for the chemical related to your comment, by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
This action is directed to the public in general. As such, the Agency has not attempted to describe the specific entities that this action may apply to. Although others may be affected, this action applies directly to the submitters of the actions addressed in this document.
1.
2.
This document provides receipt and status reports, which cover the period from March 1, 2016 to March 31, 2016, and consists of the PMNs both pending and/or expired, and the NOCs to manufacture a new chemical that the Agency has received under TSCA section 5 during this time period.
Under TSCA, 15 U.S.C. 2601
Anyone who plans to manufacture or import a new chemical substance for a non-exempt commercial purpose is required by TSCA section 5 to provide EPA with a PMN, before initiating the activity. Section 5(h)(1) of TSCA authorizes EPA to allow persons, upon application, to manufacture (includes import) or process a new chemical substance, or a chemical substance subject to a significant new use rule (SNUR) issued under TSCA section 5(a), for “test marketing” purposes, which is referred to as a test marketing exemption, or TME. For more information about the requirements applicable to a new chemical go to:
Under TSCA sections 5(d)(2) and 5(d)(3), EPA is required to publish in the
As used in each of the tables in this unit, (S) indicates that the information in the table is the specific information provided by the submitter, and (G) indicates that the information in the table is generic information because the specific information provided by the submitter was claimed as CBI.
For the 58 PMNs received by EPA during this period, Table 1 provides the following information (to the extent that such information is not claimed as CBI): The EPA case number assigned to the PMN; The date the PMN was received by EPA; the projected end date for EPA's review of the PMN; the submitting manufacturer/importer; the potential uses identified by the manufacturer/importer in the PMN; and the chemical identity.
For the 39 NOCs received by EPA during this period, Table 3 provides the following information (to the extent that such information is not claimed as CBI): The EPA case number assigned to the NOC; the date the NOC was received by EPA; the projected date of commencement provided by the submitter in the NOC; and the chemical identity.
15 U.S.C. 2601
Federal Communications Commission.
Notice.
In this document, the Commission seeks comment on whether certain docketed Commission proceedings should be terminated as dormant. The Commission's procedural rules, which were revised to streamline and improve the agency's docket management practices, delegate authority to the Chief, CGB to periodically review all open dockets and, in consultation with the responsible Bureaus or Offices, to identify those dockets that appear to be candidates for termination.
Comments are due on or before June 1, 2016, and reply comments are due on or before June 16, 2016.
Interested parties may submit comments, identified by [CG Docket No. 16-16], by any of the following methods:
Electronic Filers: Comments may be filed electronically using the Internet by accessing the Commission's Electronic Comment Filing System (ECFS) at
Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th Street SW., Room TW-A325, Washington, DC 20554. The filing hours are 8 a.m. to 7 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of
Commercial overnight mail (other than U.S. Postal Service Express mail and Priority mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington DC 20554.
Lauren Wilson, Consumer and Governmental Affairs Bureau at (202) 418-1607 or by email at
This is a synopsis of the Commission's Public Notice,
Pursuant to 47 CFR 1.415 and 1.419, interested parties may file comments and reply comments on or before the respective dates indicated in the
Pursuant to 47 CFR 1.1200
To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to
The revised rules, in part, delegate authority to the Chief, CGB to periodically review all open dockets and, in consultation with the responsible Bureaus or Offices, to identify those dockets that appear to be candidates for termination. These candidates include dockets in which no further action is required or contemplated, as well as those in which no pleadings or other documents have been filed for several years. However, the Commission specified that proceedings in which petitions addressing the merits are pending should not be terminated absent the parties' consent. The termination of a dormant proceeding also includes dismissal as moot of any pending petition, motion, or other request for relief that is procedural in nature or otherwise does not address the merits of the proceeding.
Prior to the termination of any particular proceeding, the Commission was directed to issue a Public Notice identifying the dockets under consideration for termination and affording interested parties an opportunity to comment. Thus, CGB has identified the dockets for possible termination in document DA 16-187, available at
Federal Election Commission
Tuesday, April 12, 2016 at 10:00 a.m.
999 E Street NW., Washington, DC.
This Meeting Will be Closed to the Public.
81 FR 20383.
This meeting was continued on April 26, 2016.
Judith Ingram, Press Officer, Telephone: (202) 694-1220.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than May 27, 2016.
A. Federal Reserve Bank of Kansas City (Dennis Denney, Assistant Vice President) 1 Memorial Drive, Kansas City, Missouri 64198-0001:
1.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than May 17, 2016.
A. Federal Reserve Bank of Chicago (Colette A. Fried, Assistant Vice President) 230 South LaSalle Street, Chicago, Illinois 60690-1414:
1.
B. Federal Reserve Bank of St. Louis (David L. Hubbard, Senior Manager) P.O. Box 442, St. Louis, Missouri 63166-2034. Comments can also be sent electronically to
1.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than May 26, 2016.
A. Federal Reserve Bank of Cleveland (Nadine Wallman, Vice President) 1455 East Sixth Street, Cleveland, Ohio 44101-2566. Comments can also be sent electronically to
1.
B. Federal Reserve Bank of Minneapolis (Jacquelyn K. Brunmeier, Assistant Vice President) 90 Hennepin Avenue, Minneapolis, Minnesota 55480-0291:
1.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice with comment period.
The Centers for Disease Control and Prevention (CDC), as part of its continuing efforts to reduce public burden and maximize the utility of government information, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. This notice invites comment on an information collection request proposal entitled “Continuing International and Domestic Information Collections from the 2016 Zika Virus Emergency Response.” These collections will allow CDC to continue its ongoing response to the Zika virus outbreak.
Written comments must be received on or before July 1, 2016.
You may submit comments, identified by Docket No. CDC-2016-0040 by any of the following methods:
•
•
All public comment should be submitted through the Federal eRulemaking portal (Regulations.gov) or by U.S. mail to the address listed above.
To request more information on the proposed project or to obtain a copy of the information collection plan and instruments, contact the Information Collection Review Office, Centers for Disease Control and Prevention, 1600 Clifton Road NE., MS-D74, Atlanta, Georgia 30329; phone: 404-639-7570; Email:
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. In addition, the PRA also requires Federal agencies to provide a 60-day notice in the
Continuing International and Domestic Information Collections from the 2016 Zika Virus Emergency Response—New—National Center for Emerging and Zoonotic Infectious Diseases (NCEZID), Centers for Disease Control and Prevention (CDC).
In May 2015, the Pan American Health Organization (PAHO) issued an alert regarding the first confirmed Zika virus infections in Brazil. Since then, CDC has been responding to increased reports of Zika and has assisted in investigations with PAHO and the Brazil Ministry of Health. The first regional travel notices for Zika in South America and Mexico were posted in December 2015. In December 2015, the Commonwealth of Puerto Rico, a United States territory, reported its first confirmed locally transmitted Zika virus case. Cases of local transmission have recently been confirmed in two other US territories, the United States Virgin Islands and American Samoa. As of April 6, 2016, US territories had reported 351 locally acquired Zika cases and 3 travel-associated Zika cases to CDC. Of the 354 cases reported, 37 were in pregnant women. Zika has not been spread by mosquitoes in the continental United States. However, lab tests have confirmed Zika virus in travelers returning to the United States. These travelers have gotten the virus from mosquito bites and a few non-travelers got Zika through sex. With the recent outbreaks in the Americas, the number of Zika cases among travelers visiting or returning to the United States is increasing. CDC monitors and reports to the public cases of Zika, which will help improve our understanding of how and where Zika is spreading.
Zika virus is spread to people primarily through the bite of an infected
In February and March 2016, CDC used OMB emergency clearance procedures to initiate and expedite multiple urgently needed information collections in American Samoa, Puerto Rico, Brazil, and domestically within state, tribal, local, and territorial (STLT) jurisdictions. These procedures have allowed the agency to target and refine public health interventions to arrest ongoing spread of infection.
With this notice, the CDC is announcing its intention to seek OMB clearances to continue four Zika-related information collections beyond their current emergency expiration dates. These four projects will be submitted to OMB as standalone ICRs:
1. A call center in CDC's Emergency Operations Center (EOC) to respond to inquiries on clinical care of persons potentially of interest for Zika virus infection [OMB Control No. 0920-1101, expiration date 8/31/16]. Respondents to this information collection include the general public, clinicians, and employees at STLT health departments. The purpose of this information collection is to document and track clinical inquiries made to the CDC EOC call center and to systematically collect standardized clinical/demographic/epidemiological information about suspected cases. The emergency clearance for this information collection dealt specifically with Zika-related clinical inquiries. However, the new ICR will cover this project for any EOC activation. Regardless of the disease or hazard being responded to, the EOC operates this call center to answer and respond to clinical inquiries. This information collection is a necessary part of operating this call center and responding to emergency situations.
2. A study, in Puerto Rico, on the persistence of Zika virus in bodily fluids [OMB Control No. 0920-1106, expiration date 9/30/16]. Since getting OMB approval in March 2016, CDC has
3. A study, carried out in the United States, on the persistence of Zika virus in the semen and urine of men with laboratory-confirmed Zika virus infection [OMB Control No. 0920-1109, expiration date 9/30/2016]. Since getting emergency OMB approval in March, 2016, specimens have been tested for Zika RNA by reverse transcriptase polymerase chain reaction assay (RT-PCR) at CDC; those testing positive may be further evaluated by virus isolation techniques. Zika virus disease is a nationally notifiable condition, and participants are recruited through contact with CDC personnel. Urine and semen specimens are self-collected using home collection kits, a short questionnaire is self-administered, and participants receive a token of appreciation. Results of testing will be provided to participants at the conclusion of testing. The results of this study are expected to have immediate implications for public health recommendations and disease prevention. The results of this study will be of great relevance to provide evidence-based information to circumvent Zika virus transmission. They will inform the development of recommendations used in the current epidemic setting, as well as in future Zika virus situations. Results and analysis will be used to update and refine relevant counseling messages and recommendations.
4. Registry of pregnant women with laboratory-confirmed Zika virus infections in the U.S. [OMB Control No. 0920-1101, expiration date 8/31/16]. As part of the public health response to the Zika virus disease outbreak, CDC has been collecting information from clinicians in the U.S. about pregnant women they treat who are diagnosed with Zika virus infection. CDC also plans to collect information from clinicians about their patients' infants in order to better understand the clinical consequences of Zika virus infection in pregnancy and its impact on newborn infants. Information gathered directs public health messages provided by CDC on reducing the risk of adverse outcomes for pregnant women and their infants.
These information collections will align with their legislative authority, Section 301 of the Public Health Service Act (42 U.S.C. 241).
There are no costs to the respondents other than their time. The total annualized burden requested is 1,146 hours. This number represents the number of burden hours yet to be imposed. It does not include the burden hours sustained during the initial six-month emergency clearance period.
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (PRA), federal agencies are required to publish notice in the
Comments on the collection(s) of information must be received by the OMB desk officer by June 1, 2016.
When commenting on the proposed information collections, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be received by the OMB desk officer via one of the following transmissions: OMB, Office of Information and Regulatory Affairs, Attention: CMS Desk Officer, Fax Number: (202) 395-5806
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' Web site address at
2. Email your request, including your address, phone number, OMB number, and CMS document identifier, to
3. Call the Reports Clearance Office at (410) 786-1326.
Reports Clearance Office at (410) 786-1326.
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires federal agencies to publish a 30-day notice in the
1.
2.
Beginning in 2016, initial PACE applications will be submitted via a new automated, electronic submission process. An application also must be submitted for a PO that seeks to expand its service area and/or add a new PACE center site.
The purpose of this PRA package is to enable the submission of both initial PACE applications, as well as service area expansion applications. We have successfully transitioned the Medicare Advantage application and Prescription Drug Plan (PDP) application to a fully electronic submission process, enabling a more organized and streamlined review, and would like to bring those same efficiencies to all PACE application processes. OMB approval would help ensure applicant compliance with CMS' requirements and ability to gather data used to support approval or denial of either an initial PACE application or a service area expansion application submitted by an existing PO.
Centers for Medicare & Medicaid Services, Department of Health and Human Services.
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (the PRA), federal agencies are require; to publish notice in the
Comments must be received by July 1, 2016
When commenting, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be submitted in any one of the following ways:
1.
2.
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' Web site address at
2. Email your request, including your address, phone number, OMB number, and CMS document identifier, to
3. Call the Reports Clearance Office at (410) 786-1326.
Reports Clearance Office at (410) 786-1326.
This notice sets out a summary of the use and burden associated with the following information collections. More detailed information can be found in each collection's supporting statement and associated materials (see
Under the PRA (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA requires federal agencies to publish a 60-day notice in the
1.
2.
Individual-level data will be collected two times using the TEFT FASI Item Set. The first data collection effort will collect data that can be analyzed to evaluate the reliability and validity of the FASI items when used with the five waiver populations. Assessors will conduct functional assessments in client homes using the TEFT FASI Item Set. Changes may be recommended to individual TEFT FASI items, to be made prior to releasing the TEFT FASI items for use by the states. The FASI Field Test Report will be released to the public.
The second data collection will be conducted by the states to demonstrate their use of the FASI data elements. The assessment data could be used by the states for multiple purposes. They may use the standardized items to determine individual eligibility for state programs, or to help determine levels of care within which people can receive services, or other purposes. In the second round of data collection, states will demonstrate their proposed uses, manage their FASI data collection and conduct their own analysis, to the extent they propose to do such tasks. The states have been funded under the demonstration grant to conduct the round 2 data collection and analysis. These states will submit reports to CMS describing their experience in the Round 2 data collection, including the items they collected, how they planned to use the data, and the types of challenges and successes they encountered in doing so. The reports may be used by CMS in their evaluation of the TEFT grants.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of a compliance policy guide (CPG) entitled “Compliance Policy Guide Sec. 690.150 Labeling and Marketing of Dog and Cat Food Diets Intended to Diagnose, Cure, Mitigate, Treat, or Prevent Diseases.” This CPG provides guidance to FDA staff on issues related to dog and cat diets that are labeled and/or marketed as intending to diagnose, cure, mitigate, treat, or prevent diseases and to provide all or most nutrients in support of meeting the animal's total daily nutrient requirements. This CPG finalizes the draft CPG entitled “Compliance Policy Guide Sec. 690.150 Labeling and Marketing of Nutritional Products Intended for Use to Diagnose, Cure, Mitigate, Treat, or Prevent Disease in Dogs and Cats,” dated September 10, 2012.
Submit either electronic or written comments on Agency guidances at any time.
You may submit comments as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Division of Dockets Management, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
•
Submit written requests for single copies of the guidance to the Policy and Regulations Staff (HFV-6), Center for Veterinary Medicine, Food and Drug Administration, 7519 Standish Pl., Rockville, MD 20855. Send one self-addressed adhesive label to assist that office in processing your requests. See the
William J. Burkholder, Center for Veterinary Medicine, Division of Animal Feeds (HFV-220), Food and Drug Administration, 7519 Standish Place, Rockville, MD 20855, 240-402-5900; email:
In the
FDA revised the title of the final CPG. The final CPG is entitled “Compliance Policy Guide Sec. 690.150 Labeling and Marketing of Dog and Cat Food Diets Intended to Diagnose, Cure, Mitigate, Treat, or Prevent Diseases.” In addition to revising the title, editorial changes were made to improve clarity.
The CPG announced in this notice finalizes the draft CPG dated September 10, 2012.
This level 1 CPG is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the current thinking of FDA on labeling and marketing of dog and cat food diets intended to diagnose, cure, mitigate, treat, or prevent diseases. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
Under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 3501-3520), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3 and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. In the
Persons with access to the Internet may obtain the CPG at either
Notice.
In compliance with section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Office of the Assistant Secretary for Health (OASH), Department of Health and Human Services, announces plans to submit a new Information Collection Request (ICR), described below, to the Office of Management and Budget (OMB). Prior to submitting the ICR to OMB, OASH seeks comments from the public
Comments on the ICR must be received on or before July 1, 2016.
Submit your comments to
Information Collection Clearance staff,
When submitting comments or requesting information, please include the document identifier HHS-OS-0990-New—60D for reference.
Information Collection Request Title: Evaluation of the
OASH has a long history of collaborating with communities to improve adolescent health outcomes. To further help communities build an environment that promotes adolescent health, OASH recently developed Promoting Health and Healthy Development in the Second Decade of Life: A Planning Guide for Communities (“the Guide”). The purpose of the Guide is to provide an easy to follow tool that community leaders can use to (1) establish a community coalition with broad membership, and (2) develop a community plan for improving adolescent health and well-being that includes multi-impact strategies. To understand whether and how community leaders are able to use the Guide to achieve these two goals, OASH needs information about the Guide's utility and effectiveness. The evaluation of the Second Decade Project Community Planning Guide (“the evaluation”) is intended to support the goals of OASH's Second Decade Project of helping community leaders incorporate the needs of children, adolescents and young adults in community growth and development plans, and to improve outcomes of young adults and adolescents. Five communities will participate in the piloting and evaluation of the Guide. The evaluation will provide OASH with critical information regarding the components of the Guide that community leaders found most useful and effective in accomplishing their goals of improving adolescent health and wellbeing; the compilation and inclusiveness of the coalitions implementing the Guide; and the demographic and environmental context of these communities. While secondary data will be collected from sources such as the U.S. Census Bureau American Community Survey and Youth Risk Behavior and National Health Interview Surveys, these sources do not provide nuanced information needed by OASH to understand the contexts in which the Guide is most effective.
Likely Respondents—Qualitative data will be collected through semi-structured telephone interviews and through focus groups. Telephone interviews will be conducted with community leaders (Community Leader Interview) in the five pilot sites to explore how the use of the Guide supported key leaders in their development of a diverse coalition and educating the community about issues facing adolescents. Focus groups will be conducted with coalition members (Coalition Member Focus Groups) from the five pilot sites to assess how the Guide facilitated the work of the coalition to develop a comprehensive community plan that addresses critically important adolescent health issues.
Quantitative data will be collected through Web-based surveys with coalition members from the five communities and with secondary stakeholders—specifically, adolescent health experts and state/local health department officials—selected by OASH. The Coalition Assessment Survey will assess coalition members' perspectives on the usefulness and ease of implementing the Guide. The Secondary Stakeholder Survey will engage Adolescent Health researchers and practitioners to garner additional feedback and assessment of the Guide.
OASH specifically requests comments on (1) the necessity and utility of the proposed information collection for the proper performance of the agency's functions, (2) the accuracy of the estimated burden, (3) ways to enhance the quality, utility, and clarity of the information to be collected, and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
National Vaccine Program Office, Office of the Assistant Secretary for Health, Office of the Secretary, Department of Health and Human Services.
Notice.
The National Vaccine Program Office (NVPO), a program office within the Office of the Assistant Secretary for Health, Department of Health and Human Services (HHS), is soliciting nominations of qualified candidates to be considered for appointment as public members to the NVAC. The activities of this Committee are governed by the Federal Advisory Committee Act (FACA). Management and support services of the NVAC and its activities are the responsibility of the NVPO.
The NVAC serves an advisory role, providing recommendations to the Assistant Secretary for Health in his/her capacity as the Director of the National Vaccine Program, on matters related to the Program's responsibilities. Specifically, the Committee studies and recommends ways to encourage the availability of an adequate supply of safe and effective vaccination products in the United States; and recommends research priorities and other measures to enhance the safety and efficacy of vaccines. The Committee also advises the Assistant Secretary for Health in the implementation of Sections 2102 and 2103 of the PHS Act; and identifies annually the most important areas of government and non-government cooperation that should be considered in implementing Sections 2102 and 2103 of the PHS Act.
All nominations for membership on the Committee must be received no later than 5:00 p.m. EDT on June 1, 2016, to the address listed below.
Jennifer Gordon, Ph.D., Alternate Designated Federal Official, NVAC; Science Advisor, National Vaccine Program Office, Department of Health and Human Services, 200 Independence Avenue SW., Room 733G, Washington, DC 20201; (202) 260-6619;
A copy of the Committee charter which includes the NVAC's structure and functions, as well as a list of the current membership, can be obtained by contacting Dr. Gordon or by accessing the NVAC Web site at:
This announcement is to solicit nominations of qualified candidates to fill positions in the public member category of the NVAC, including positions that are scheduled to be vacated during the 2016 calendar year.
• Vaccine research and development, vaccine clinical trials, and vaccine regulatory science;
• vaccine safety and post-marketing surveillance;
• vaccine access and financing;
• health information technologies and immunization information systems;
• immunization program implementation and management;
• vaccine communications;
The Department makes every effort to ensure that the membership of HHS federal advisory committees is fairly balanced in terms of points of view represented and the committee's function. Every effort is made that a broad representation of geographic areas, gender, ethnic and minority groups, and the disabled are given consideration for membership on HHS federal advisory committees. Appointment to this Committee shall be made without discrimination on the basis of age, race, ethnicity, gender, sexual orientation, disability, and cultural, religious, or socioeconomic status.
Individuals appointed to serve as public members of federal advisory committees are classified as special government employees (SGEs). SGEs are government employees for purposes of the conflict of interest laws. Therefore, individuals appointed to serve as public members of NVAC are subject to an ethics review. The ethics review is conducted to determine if the individual has any interests and/or activities in the private sector that may conflict with performance of their official duties as a member of the NVAC. Individuals appointed to serve as public members of the NVAC will be required to disclose information regarding financial holdings, consultancies, research grants and/or contracts, and the absence of an appearance of a loss of impartiality.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the National Advisory Council on Alcohol Abuse and Alcoholism.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Closed: 9:00 a.m. to 10:00 a.m.
Open: 10:15 a.m. to 4:00 p.m.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
Information is also available on the Institute's/Center's home page:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications/contract proposals and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications/contract proposals, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Notice is hereby given of the cancellation of the National Center for Advancing Translational Sciences Advisory Council and cancellation of the Cures Acceleration Network Review Board, May 12, 2016, 8:30 a.m. to May 12, 2016, 4:30 p.m., National Institutes of Health, Building 31, 31 Center Drive, Conference Room 10, Bethesda, MD, 20892 which was published in the
Meetings were cancelled.
Notice is hereby given of a change in the meeting of the Epidemiology, Prevention and Behavior Research Review Subcommittee, June 06, 2016, 08:30 a.m. to June 06, 2016, 06:00 p.m., National Institute on Alcohol Abuse and Alcoholism, 5635 Fishers Lane, T-Level Conference Room 508/509, Rockville, MD, 20852 which was published in the
This meeting is being amended to change the Contact Person from Katrina L. Foster, Ph.D. to Beata Buzas, Ph.D. The meeting is closed to the public.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Transportation Security Administration, DHS.
60-day notice.
The Transportation Security Administration (TSA) invites public comment on one currently-approved Information Collection Request (ICR), Office of Management and Budget (OMB) control number 1652-0056, abstracted below that we will submit to OMB for renewal in compliance with the Paperwork Reduction Act (PRA). The ICR describes the nature of the information collection and its expected burden. The collection allows TSA to assess the current security practices in the pipeline industry through TSA's Pipeline Corporate Security Review (PCSR) program. The PCSR program is part of the larger domain awareness, prevention, and protection program supporting TSA's and the Department of Homeland Security's missions.
Send your comments by July 1, 2016.
Comments may be emailed to
Christina A. Walsh at the above address, or by telephone (571) 227-2062.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
(1) Evaluate whether the proposed information requirement is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including using appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
The purpose of the PCSR program is to develop first-hand knowledge of a pipeline owner/operator's corporate security policies and procedures, establish and maintain working relationships with key pipeline security personnel, and identify and share smart security practices observed at individual facilities to help enhance and improve the security of the pipeline industry. To this end, the PCSR Program provides TSA with a method to discuss security-related matters with pipeline owners/operators.
Focusing on the security of pipelines and the crude oil and petroleum
• Meet with senior corporate officers and security managers.
• Develop knowledge of security planning at critical pipeline infrastructure sites.
• Establish and maintain a working relationship with key security staff who operate critical pipeline infrastructure.
• Identify industry smart practices and lessons learned.
• Maintain a dynamic modal network through effective communications with the pipeline industry and government stakeholders.
In carrying out PCSRs, subject matter experts from TSA, using a risk-based approach, visit select pipeline owners/operators throughout the nation. These are voluntary face-to-face visits, usually at the headquarters facility of the pipeline owner/operator. Typically, TSA sends one to three employees to conduct a three- to four-hour interview with representatives from the owner/operator. The TSA representatives analyze the owner/operator's security plan and determine if the mitigation measures included in the plan are being properly implemented. TSA then may visit one or two of the owner/operator's assets to further assess the implementation of the owner/operator's security plan.
TSA has developed a question set to aid in the conducting of PCSRs. The PCSR Question Set drives the TSA-owner/operator discussion and is the central data source for all security information collected. The PCSR Question Set was developed based on government and industry guidance to obtain information from a pipeline owner/operator about its security plan and processes. The questions are designed to examine the company's current state of security, as well as to address measures that are applied if there is a change in the National Terrorism Advisory System.
In application, topics such as security program management, vulnerability assessments, components of the security plan, security training, and emergency communications enable the PCSR Teams to assess the owner/operator's security plan by evaluating a broad range of security issues such as physical security, cyber security, communication, and training. The PCSR Question Set also includes sections for facility site visits and owner/operator contact information. The questions and subsequent answers help provide TSA with a snapshot of a company's security posture and are instrumental in developing smart practices and security measures.
This PCSR information collection provides TSA with real-time information on current security practices within the pipeline mode of the surface transportation sector. This information allows TSA to adapt programs to the changing security threat, while incorporating an understanding of the improvements owners/operators make in their security measures. Without this information, the ability of TSA to perform its security mission would be severely hindered.
Additionally, the relationships these face-to-face contacts foster are critical to the Federal government's ability to reach out to the pipeline stakeholders affected by the PCSRs. TSA assures respondents that the portion of their responses that is deemed Sensitive Security Information (SSI) will be protected in accordance with procedures meeting the transmission, handling, and storage requirements of SSI set forth in 49 Code of Federal Regulations (CFR) parts 15 and 1520.
The annual hour burden for this information collection is estimated to be 120 hours based upon 15 PCSR visits per year, each lasting a total of eight hours.
Fish and Wildlife Service, Interior.
Notice of receipt of applications; request for public comment.
We, the U.S. Fish and Wildlife Service, invite the public to comment on the following applications to conduct certain activities with endangered or threatened species. The Endangered Species Act of 1973, as amended (Act), prohibits activities with endangered and threatened species unless a Federal permit allows such activities. Both the Act and the National Environmental Policy Act require that we invite public comment before issuing these permits.
To ensure consideration, written comments must be received on or before June 1, 2016.
Susan Jacobsen, Chief, Division of Classification and Restoration, by U.S. mail at Division of Classification and Recovery, U.S. Fish and Wildlife Service, P.O. Box 1306, Albuquerque, NM 87103; or by telephone at 505-248-6920. Please refer to the respective permit number for each application when submitting comments.
Susan Jacobsen, Chief, Division of Classification and Restoration, by U.S. mail at P.O. Box 1306, Albuquerque, NM 87103; or by telephone at 505-248-6920.
The Act (16 U.S.C. 1531
A permit granted by us under section 10(a)(1)(A) of the Act authorizes applicants to conduct activities with U.S. endangered or threatened species for scientific purposes, enhancement of survival or propagation, or interstate commerce. Our regulations regarding implementation of section 10(a)(1)(A) permits are found at 50 CFR 17.22 for endangered wildlife species, 50 CFR 17.32 for threatened wildlife species, 50 CFR 17.62 for endangered plant species, and 50 CFR 17.72 for threatened plant species.
We invite local, State, Tribal, and Federal agencies and the public to comment on the following applications. Please refer to the appropriate permit number (
Documents and other information the applicants have submitted with these applications are available for review, subject to the requirements of the Privacy Act (5 U.S.C. 552a) and Freedom of Information Act (5 U.S.C. 552).
Applicant requests an amendment to a current permit for research and recovery purposes to conduct presence/
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for southwestern willow flycatcher (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for southwestern willow flycatcher (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for southwestern willow flycatcher (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for southwestern willow flycatcher (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for black-capped vireo (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for golden-cheeked warbler (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys, capture, and banding of golden-cheeked warbler (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for golden-cheeked warbler (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for southwestern willow flycatcher (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for golden-cheeked warbler (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for the following species within Texas:
Applicant requests an amendment to a current permit for research and recovery purposes to conduct presence/absence surveys for the following species within Arizona, New Mexico, Oklahoma, and Texas:
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for gray bat (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for gray bat (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for Indiana bat (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for Ozark big-eared bat (
Applicant requests an amendment to a current permit for research and recovery purposes to capture, band, and collect blood and feathers from southwestern willow flycatchers (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys for American burying beetle (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys of American burying beetle (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys of American burying beetle (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys of American burying beetle (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys of American burying beetle (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys of American burying beetle (
Applicant requests a new permit for research and recovery purposes to conduct presence/absence surveys of American burying beetle (
Applicant requests a new permit for research and recovery purposes to maintain and display live Colorado pikeminnow (
Applicant requests an amendment to a current permit for research and recovery purposes to rear and maintain Chiricahua leopard frog (
Applicant requests an amendment to a current permit for research and recovery purposes to conduct laboratory toxicity studies on razorback suckers (
In compliance with NEPA (42 U.S.C. 4321
All comments and materials we receive in response to this request will be available for public inspection, by appointment, during normal business hours at the address listed in the
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.
We provide this notice under section 10 of the Act (16 U.S.C. 1531
Bureau of Land Management, Interior.
Notice.
The Bureau of Land Management (BLM) has examined and found suitable for classification for lease and conveyance under the provisions of the Taylor Grazing Act and the Recreation and Public Purposes (R&PP) Act, as amended, approximately 20 acres of public land located near the corner of West Silverado Ranch Boulevard and South Valley View Boulevard in Clark County, Nevada. The State of Nevada proposes to use the land for a Department of Motor Vehicles (DMV) facility.
Interested parties may submit written comments regarding the proposed classification of the land for lease and/or subsequent conveyance of the land, and the environmental assessment (EA), until June 16, 2016.
Send written comments to the BLM Division of Lands, Assistant Field Manager, 4701 N. Torrey Pines Drive, Las Vegas, NV 89130, faxed to
Kerri-Anne Thorpe, (702) 515-5196, or
The parcel of public land is located in the southern part of the Las Vegas Valley near the corner of West Silverado Ranch Boulevard and South Valley View Boulevard in Las Vegas, Nevada and is legally described as:
The area described contains 20 acres, more or less, in Clark County.
In accordance with the R&PP Act, the State of Nevada has filed an application in which it proposes to develop the above-described land as a DMV facility that will consist of a full service DMV building with related facilities. The related facilities include a drive test parking lot, motorcycle test course, Commercial Drivers' License test course, employee and visitor parking lots, landscaping, lighting, walkways, drainage, irrigation, restrooms, concessions, utilities, and ancillary improvements. Additional detailed information pertaining to this application, plan of development, and site plan is located in case file N-92525, which is available for review at the BLM Las Vegas Field Office at the above address.
The land identified is not needed for any Federal purpose. The lease and conveyance is consistent with the BLM Las Vegas Resource Management Plan dated October 5, 1998, and would be in the public interest. The State of Nevada, a qualified applicant under the R&PP Act, has not applied for more than the 640 acre limitation consistent with the regulations at 43 CFR 2741.7(a)(2), and has submitted a statement in compliance with the regulations at 43 CFR 2741.4(b). Subject to limitations prescribed by law and regulation, prior to patent issuance, the holder of any right-of-way grant within the lease area may be given the opportunity to amend the right-of-way grant for conversion to a new term, including perpetuity, if applicable.
The lease and conveyance, when issued, will be subject to the provisions of the R&PP Act and applicable regulations of the Secretary of the Interior, and will contain the following reservations to the United States:
1. A right-of-way thereon for ditches or canals constructed by the authority of the United States, Act of August 30, 1890 (43 U.S.C. 945); and
2. All minerals shall be reserved to the United States, together with the right to prospect for, mine, and remove such deposits from the same under applicable law and such regulations as the Secretary of the Interior may prescribe.
3. Any lease and conveyance will also be subject to valid existing rights.
Upon publication of this notice in the
Interested parties may submit written comments on the suitability of the land for a DMV Facility. Comments on the classification are restricted to whether the land is physically suited for the proposal, whether the use will maximize the future use or uses of the land, whether the use is consistent with local planning and zoning, or if the use is consistent with state and federal programs.
Interested parties may also submit written comments regarding the specific use proposed in the application and plan of development, and whether the BLM followed proper administrative procedures in reaching the decision to convey under the R&PP Act.
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.
Any adverse comments will be reviewed by the BLM Nevada State Director, who may sustain, vacate, or modify this realty action. In the absence of any adverse comments, the decision will become effective on July 1, 2016. The lands will not be available for lease and subsequent conveyance until after the decision becomes effective.
43 CFR 2741.5(h).
National Park Service, Interior.
Notice; request for comments.
We (National Park Service, NPS) will ask the Office of Management and Budget (OMB) to approve the information collection described below. As required by the Paperwork Reduction Act of 1995 and as part of our continuing efforts to reduce paperwork and respondent burden, we invite the general public and other Federal agencies to take this opportunity to comment on this IC. We may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a valid OMB control number.
To ensure we are able to consider your comments, we must receive them on or before July 1, 2016.
Please send your comments on the ICR to Madonna L. Baucum, Information Collection Clearance Officer, National Park Service, 12201 Sunrise Valley Drive, Mail Stop 242, Reston, VA 20192 (mail); or via email at
Sherda K. Williams, Superintendent, Brown v. Board of Education National Historic Site. 1515 SE Monroe Avenue, Topeka, Kansas 66612-1143 (mailing address); or via email at
The Organic Act of 1916 (54 U.S.C. 100101) directs the NPS to preserve America's natural wonders unimpaired for future generations, while also making them available for the enjoyment of the visitor. On October 26, 1992, President George H.W. Bush signed the Brown v. Board of Education
• Form 10-975, “Brown vs. Board of Education—Distance Learning Request Form” is used by BRVB to schedule and provide distance learning programs via H.323 equipment or the Internet. The information requested on Form 10-975 includes:
○ Contact name and title,
○ School/organization name,
○ Mailing address, telephone number,
○ Age/grade and type of group/class for attendees,
○ Technical connectivity availability (H.323 equipment, Internet, webcam)
○ Type of material covered prior to the distance learning program (for school groups),
○ What information is pertinent for the interpretive ranger to know in advance about the group, and
○ Selection of program desired.
• Form 10-976, “Brown vs. Board of Education—Reservation Request Form” is used by BRVB to schedule and provide ranger-guided programs to high school aged students which vary from brief overview talks to in-depth presentations. The information requested on Form 10-976 includes:
○ Contact name and cell phone number,
○ School name,
○ Mailing address,
○ Email address,
○ Group information to include number of students, grades, and number of adult chaperones,
○ Date/time of visit to include primary and alternate dates,
○ Type and length of program,
○ What information is pertinent for the interpretive ranger to know in advance about the group, and
○ Special needs/interests of group.
• Form 10-977, “Brown vs. Board of Education—Reservation Request Form” is used by BRVB to schedule and provide ranger-guided programs to elementary and middle school aged students which vary from brief overview talks to in-depth presentations. The information requested on Form 10-977 includes:
○ Contact name, title, and phone number,
○ School name,
○ Mailing address,
○ Email address,
○ Group information to include grade/age, number of students, and number of adult chaperones,
○ Date/time of visit to include primary and alternate dates,
○ Type and length of program, and
○ Additional relevant comments.
• Form 10-978, “Brown vs. Board of Education—Transportation Grant Request” is used by BRVB to obtain estimated transportation cost and determine eligibility for approval of bus transportation support to schools, based on guidelines. Supports access to ranger-guided on-site tours for youth. The information requested on Form 10-978 includes:
○ Contact name and phone number,
○ School name,
○ Mailing address,
○ Email address,
○ Date of visit,
○ Number of students,
○ Is requestor located within a 75 mile radius of Topeka,
○ Is the requestor a Title I school,
○ Estimated transportation cost (fuel and vehicle cost only),
○ Does the transportation provider accept credit card payments,
○ Name and phone number of point of contact to process credit card payments, and
○ The number of buses to be used by the group.
We invite comments concerning this information collection on:
• Whether or not the collection of information is necessary, including whether or not the information will have practical utility;
• The accuracy of the burden for this collection of information;
• Ways to enhance the quality, utility, and clarity of the information to be collected; and
• Ways to minimize the burden to respondents, including use of automated information techniques or other forms of information technology.
Please note that the comments submitted in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this IC. 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 it will be done.
National Park Service, Interior.
Notice.
The Office of the State Archaeologist Bioarchaeology Program, previously listed as the Office of the State Archaeologist Burials Program, has completed an inventory of human remains and associated funerary objects, in consultation with the appropriate Indian tribes or Native Hawaiian organizations, and has determined that there is a cultural affiliation between the human remains and associated funerary objects and present-day Indian tribes or Native Hawaiian organizations. Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request to the Office of the State Archaeologist Bioarchaeology Program. If no additional requestors come forward, transfer of control of the human remains and associated funerary objects to the lineal descendants, Indian tribes, or Native Hawaiian organizations stated in this notice may proceed.
Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request with information in support of the request to the Office of the State Archaeologist Bioarchaeology Program at the address in this notice by June 1, 2016.
Lara Noldner, Office of the State Archaeologist Bioarchaeology Program, University of Iowa, 700 S. Clinton Street, Iowa City, IA 52242, telephone (319) 384-0740, email
Notice is here given in accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), 25 U.S.C. 3003, of the completion of an inventory of human remains and associated funerary objects under the control of the Office of the State Archaeologist, University of Iowa, Iowa City, IA. The human remains and associated funerary objects were removed from several archeological sites in Buena Vista, Cherokee, Plymouth, and Woodbury Counties, Iowa.
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA, 25 U.S.C. 3003(d)(3). The determinations in this notice are the sole responsibility of the museum, institution, or Federal agency that has control of the Native American human remains and associated funerary objects. The National Park Service is not responsible for the determinations in this notice.
A detailed assessment of the human remains was made by the Office of the State Archaeologist Bioarchaeology Program professional staff in consultation with representatives of the Three Affiliated Tribes of the Fort Berthold Reservation, North Dakota.
In 1940, human remains representing, at minimum, two individuals were removed from site 13BV1 in Buena Vista County, IA. Avocational archeologist Frank L. Van Voorhis conducted the excavations at the site; all of the human remains were recovered from an area referred to by Van Voorhis as Pitlodge I. The human remains were donated to the Storm Lake School District in the 1950s, and were transferred to the Buena Vista County Historical Society at an unknown date. In 1996, the human remains from the Van Voorhis collection were transferred to the Office of the State Archaeologist Bioarchaeology Program. The two individuals are young to middle-aged adult males, each of whom is represented by cranial fragments and mandibular remains (Burial Project 963). No known individuals were identified. No associated funerary objects are present.
At an unknown date, human remains representing, at minimum, one individual were removed from the Bultman Site (13BV2) in Buena Vista County, IA. The human remains were collected from the site by a resident of Storm Lake, IA. In 1998, the human remains were identified among materials donated by the resident to the Sanford Museum in Cherokee, IA. Subsequently, the human remains were transferred to the Office of the State Archaeologist Bioarchaeology Program. The individual is a young adult of indeterminate sex, and is represented by fragmented cranial remains and four incomplete postcranial bones (Burial Project 1270). No known individuals were identified. No associated funerary objects are present.
In 1969 or 1970, human remains representing, at minimum, one individual were removed from the Bultman Site (13BV2) in Buena Vista County, IA. The human remains were collected by a local resident and donated to the Sanford Museum in Cherokee, IA. The skeletal material was transferred to the Office of the State Archaeologist Bioarchaeology Program in 2007. The individual is an adult, possibly a young female, and is represented by fragmented cranial remains and long bone shafts (Burial Project 2156). No known individuals were identified. No associated funerary objects are present.
At an unknown date, human remains representing, at minimum, one individual were removed from the Bultman Site (13BV2) in Buena Vista County, IA. These human remains were donated to the Sanford Museum in Cherokee, IA, at an unknown date. The human remains were transferred to the Office of the State Archaeologist Bioarchaeology Program in 2007. The individual is an adult of indeterminate sex, and is represented by a single parietal fragment (Burial Project 2157). No known individuals were identified. No associated funerary objects are present.
In the 1930s, human remains representing, at minimum, two individuals were removed from site 13CK1 in Cherokee County, IA. Avocational archeologist Frank L. Van Voorhis conducted the excavations at the site from 1934 to 1937. The human remains were donated to the Storm Lake School District in the 1950s, and were transferred to the Buena Vista County Historical Society at an unknown date. In 1996, the human remains from the Van Voorhis collection were transferred to the Office of the State Archaeologist Bioarchaeology Program. The two individuals are an adult and an individual aged 15 to 20 years, each of whom is represented by dental remains (Burial Project 1103). No known individuals were identified. No associated funerary objects are present.
At an unknown date, human remains representing, at minimum, one individual were removed from site 13CK1 in Cherokee County, IA. A single bone fragment was reportedly collected from the surface of the site and donated to the Sanford Museum in Cherokee, IA.
At an unknown date, human remains representing, at minimum, one individual were removed from site 13CK3 in Cherokee County, IA. The human remains were part of the Frank L. Van Voorhis Collection, and were donated to the Storm Lake School District in the 1950s. At an unknown date, the remains were given to the Buena Vista County Historical Society. In 1996, the Office of the State Archaeologist Bioarchaeology Program received the human remains from the Van Voorhis collection. The individual is an older juvenile or young adult, and is represented by dental remains (Burial Project 1104). No known individuals were identified. No associated funerary objects are present.
At an unknown date, possibly May 20, 1984, human remains representing, at minimum, one individual were removed from the Brewster Site (13CK15) in Cherokee County, IA. The human remains were collected by an unknown individual and ended up in the collections of the Sanford Museum in Cherokee, IA. In 1998, the human remains were transferred to the Office of the State Archaeologist Bioarchaeology Program. The individual is a juvenile approximately 12-15 years old, and is represented by a single tooth (Burial Project 1372). No known individuals were identified. No associated funerary objects are present.
At an unknown date, human remains representing, at minimum, two individuals were removed from the Brewster Site (13CK15) in Cherokee County, IA. The human remains were collected by an unknown individual and ended up in the collections of the Sanford Museum in Cherokee, IA. The human remains were transferred to the Office of the State Archaeologist Bioarchaeology Program in two donations, one in 2007 and the second in 2014. The two individuals are a middle-aged adult, represented by a left maxilla (Burial Project 2159), and a subadult 8-10 years old is represented by three loose teeth (Burial Project 3038). No known individuals were identified. No associated funerary objects are present.
In 1970, human remains representing, at minimum, two individuals were removed from the Brewster Site in Cherokee County, IA. These human remains were excavated by the University of Wisconsin-Madison and were transferred, along with other materials, to the repository at the Office of the State Archaeologist. In 2011, the human remains were discovered in the repository and were transferred to the Office of the State Archaeologist Bioarchaeology Program. The two individuals are an adult, represented by cranial and dental remains, and a two to four-year-old child, represented by a cranial fragment (Burial Project 2584). No known individuals were identified. No associated funerary objects are present.
In the 1950s, human remains representing, at minimum, one individual were removed from the Phipps Site (13CK21) in Cherokee County, IA. Archeologist Reynold Ruppé supervised excavations at the site from 1952 to 1956, and most of the material collected during this work was housed in the repository of the Office of the State Archaeologist. In 2002, human remains were identified during an examination of the material from the site, and were immediately transferred to the Office of the State Archaeologist Bioarchaeology Program. The individual is a subadult between 1.0 and 5.6 years old, and is represented by a single tooth (Burial Project 1538). No known individuals were identified. No associated funerary objects are present.
On several different dates, human remains representing, at minimum, seven individuals were removed from the Phipps Site (13CK21) in Cherokee County, IA, and were stored at the Sanford Museum in Cherokee, IA. Some human remains were collected during Ellison Orr's 1934 excavations. Reynold J. Ruppé's 1952-1956 excavations also recovered human remains. In 1963, the University of Wisconsin-Madison conducted excavations and collected human remains. Human remains were also collected from the site surface by avocational archeologists. In 2007 and 2014, all human remains collected from the Phipps Site were transferred from the Sanford Museum to the Office of the State Archaeologist Bioarchaeology Program. Two of the individuals are a juvenile 16.1-16.9 years old and an infant 1.8-2.1 years old, both of whom are represented by dental remains. Additional human remains represent a young adult male, an adult female of indeterminate age, an older juvenile/young adult, a young to middle-aged adult, and an older adult (Burial Projects 2160 and 3060). No known individuals were identified. No associated funerary objects are present.
In 1999, human remains representing, at minimum, two individuals were removed from the Broken Kettle Site (13PM1) in Plymouth County, IA. The human remains were excavated during the summer archeological field school conducted by the University of Iowa, Department of Anthropology. These human remains were transferred to the Office of the State Archaeologist Bioarchaeology Program. The two individuals are a young adult and a subadult (Burial Project 1330). No known individuals were identified. No associated funerary objects are present.
At an unknown date, human remains representing, at minimum, two individuals were removed from the Broken Kettle Site (13PM1) in Plymouth County, IA. The human remains were identified among archeological materials donated to the Office of the State Archaeologist by an avocational archeologist in 2002. These human remains were transferred to the Office of the State Archaeologist Bioarchaeology Program. The two individuals are an older juvenile/young adult and a subadult aged 7.1-9.6 years, and are represented by a phalanx and two teeth (Burial Project 1593). No known individuals were identified. No associated funerary objects are present.
At an unknown date, human remains representing, at minimum, one individual were removed from the Broken Kettle Site (13PM1) in Plymouth County, IA. The site was the subject of amateur investigations in 1895 and 1910, and excavation by Ellison Orr in 1934 and 1939. Additional excavations also took place in 1967. It is unknown which fieldwork resulted in the collection of the human remains, which consisted of a single tooth. In 2010, the tooth was found in materials transferred from the University of Wisconsin-Madison to the repository at the Office of the State Archaeologist. The tooth was then transferred to the Office of the State Archaeologist Bioarchaeology Program. The individual is approximately 15 to 20 years old, and is represented by the tooth (Burial Project 2586). No known individuals were identified. No associated funerary objects are present.
In June 1969, human remains representing, at minimum, one individual were removed from the Kimball Site (13PM4) in Plymouth County, IA. A partial mandible was collected from the surface of the site and ended up in the repository of the Luther College Archaeology Laboratory in Decorah, IA. A long bone fragment from the Kimball Site, collected at an unknown date, was also found in the Luther College repository. At an unknown date, the human remains were transferred to the Office of the State Archaeologist Bioarchaeology Program.
In 1963, human remains representing, at minimum, four individuals were removed from the Kimball Site (13PM4) in Plymouth County, IA. Archeological excavations at the site were conducted by the University of Wisconsin in 1963. Material from the excavation was transferred to the Office of the State Archaeologist in 2010. In addition to the human remains from a primary burial excavated at this site, human remains were also found among the faunal remains collected during the 1963 fieldwork. The four individuals are a young female, an adult of indeterminate age and sex, a subadult of unknown age, and a subadult 2.5 to 3.5 years old (Burial Project 2671). No known individuals were identified. The 165 associated funerary objects are one bone fish gorge, one bone beaming tool or flesher, one possible flaker, one pipe fragment, 24 nonhuman bones or fragments, one noncultural rock, one piece of burned earth, one piece of flaking debris, two pieces of unworked paralava, 11 fire-cracked rocks, and 121 pot sherds.
At an unknown date, human remains representing, at minimum, two individuals were removed from 13WD402 in Woodbury County. These human remains were transferred to the Office of the State Archaeologist in the late 1970s, and most of them were reburied in 1980 at a cemetery in Iowa designated for the reinterment of Native American human remains. In 2014, nine skeletal elements and partial elements that had not been reburied were discovered in the Office of the State Archaeologist Bioarchaeology Laboratory. The two individuals are an older male and an adult of indeterminate age and sex (Burial Project 57). No known individuals were identified. No associated funerary objects are present.
Around 1970, human remains representing, at minimum, one individual were removed from site 13WD402 in Woodbury County, IA. A Sioux City resident had collected the human remains from the surface of the site. In 2000, the resident gave the human remains to the Department of Natural Resources officer from Stone State Park (Woodbury County, IA). The human remains were transferred to the Office of the State Archaeologist Bioarchaeology Program in 2000. The individual is a young to middle-age adult, possibly male, and is represented by the cranial and postcranial remains (Burial Project 1428). No known individuals were identified. No associated funerary objects are present.
In the 1970s, human remains representing, at minimum, 21 individuals were removed from site 13WD402 in Woodbury County, IA. A Sioux City resident collected the human remains from the surface of the site and had kept them in his garage. The Sioux City Police Department recovered the human remains from the garage in 2009 and transferred them to the Office of the State Archaeologist Bioarchaeology Program. The 21 individuals are one infant, four children, six adolescents, one young to middle-aged adult male, one young to middle-aged adult female, two young to middle-aged adults of indeterminate sex, one old adult of indeterminate sex, three females of indeterminate age, and two adults of indeterminate age and sex, each of whom is represented by cranial and postcranial remains (Burial Project 2378). No known individuals were identified. No associated funerary objects are present.
Around May 2013, human remains representing, at minimum, two individuals were removed from site 13WD402 in Woodbury County, IA. A hiker found the bones on the surface of the site and turned them over to Kevin Pape, Park Ranger at Stone State Park. Subsequent surface collections were performed by archeologist Christy Rickers and by Shirley Schermer, then director of the Office of the State Archaeologist Bioarchaeology Program. All the human remains were transferred to the Bioarchaeology Program. The two individuals are one subadult aged two to six years old, and a possible male adult of indeterminate age (Burial Project 2894). No known individuals were identified. No associated funerary objects are present.
All of the above described human remains have been identified as Native American based on documented association with ancient Native American sites classified as Mill Creek culture (A.D. 1100-1300). Mill Creek manifestations are grouped within the Initial variant of the Middle Missouri Tradition. Archeological and ethnohistorical evidence links later Middle Missouri groups with the Mandan and Hidatsa, who are present-day members of the Three Affiliated Tribes of the Fort Berthold Reservation, North Dakota.
At an unknown date, human remains representing, at minimum, three individuals were removed from an unknown location in Cherokee County, IA. These human remains were collected by a local avocational archeologist and donated to the Sanford Museum in Cherokee, IA. The Sanford Museum transferred the human remains to the Office of the State Archaeologist Bioarchaeology Program in 2001. The three individuals are an adult male, a possible male 15.9-20.7 years old, and a subadult 5.0-5.5 years old, each of whom is represented by mandibular, cranial, and dental remains (Burial Project 1460). No known individuals were identified. No associated funerary objects are present.
These human remains have been identified as Native American based on the condition of the bone and on archival information. Sanford Museum documentation lists the human remains as “probably local Mill Creek.” Mill Creek manifestations are grouped within the Initial variant of the Middle Missouri Tradition. Archeological and ethnohistorical evidence links later Middle Missouri groups with the Mandan and Hidatsa, who are present-day members of the Three Affiliated Tribes of the Fort Berthold Reservation, North Dakota.
Around 1910, human remains representing, at minimum, two individuals were removed from an unknown site in Woodbury County, IA. A boy collected the human remains from the ground surface in the vicinity of Stone State Park, in Woodbury County. In 2000, the human remains were donated by the collector's son to the Office of the State Archaeologist Bioarchaeology Program. The two individuals are a middle-aged to old adult female and a young adult of indeterminate sex, each of whom is represented by the cranial remains and femora (Burial Project 1424). No known individuals were identified. No associated funerary objects are present.
These human remains have been identified as likely Mill Creek culture due to the proximity of several known Mill Creek sites to the discovery area, Stone State Park. Mill Creek manifestations are grouped within the Initial variant of the Middle Missouri Tradition. Archeological and ethnohistorical evidence links later Middle Missouri groups with the Mandan and Hidatsa, who are present-day members of the Three Affiliated Tribes of the Fort Berthold Reservation, North Dakota.
Officials of the Office of the State Archaeologist Bioarchaeology Program have determined that:
• Pursuant to 25 U.S.C. 3001(9), the human remains described in this notice
• Pursuant to 25 U.S.C. 3001(3)(A), the 165 objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• Pursuant to 25 U.S.C. 3001(2), there is a relationship of shared group identity that can be reasonably traced between the Native American human remains and associated funerary objects and the Three Affiliated Tribes of the Fort Berthold Reservation, North Dakota.
Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request with information in support of the request to Lara Noldner, Office of the State Archaeologist Bioarchaeology Program, University of Iowa, 700 S. Clinton Street, Iowa City, IA 52242, telephone (319) 384-0740, email
The Office of the State Archaeologist Bioarchaeology Program is responsible for notifying the Three Affiliated Tribes of the Fort Berthold Reservation, North Dakota that this notice has been published.
National Park Service, Interior.
Notice.
The Office of the State Archaeologist Bioarchaeology Program, previously the Office of the State Archaeologist Burials Program, has completed an inventory of human remains, in consultation with the appropriate Indian tribes or Native Hawaiian organizations, and has determined that there is a cultural affiliation between the human remains and present-day Indian tribes or Native Hawaiian organizations. Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains should submit a written request to the Office of the State Archaeologist Bioarchaeology Program. If no additional requestors come forward, transfer of control of the human remains to the lineal descendants, Indian tribes, or Native Hawaiian organizations stated in this notice may proceed.
Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains should submit a written request with information in support of the request to the Office of the State Archaeologist Bioarchaeology Program at the address in this notice by June 1, 2016.
Lara Noldner, Office of the State Archaeologist Bioarchaeology Program, 700 S. Clinton Street, Iowa City, IA 52242, telephone (319) 384-0740, email
Notice is here given in accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), 25 U.S.C. 3003, of the completion of an inventory of human remains under the control of the Office of the State Archaeologist Bioarchaeology Program, Iowa City, IA. The human remains were removed from Allamakee, Clay, Des Moines, Louisa and Woodbury Counties, Iowa.
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA, 25 U.S.C. 3003(d)(3). The determinations in this notice are the sole responsibility of the museum, institution, or Federal agency that has control of the Native American human remains. The National Park Service is not responsible for the determinations in this notice.
A detailed assessment of the human remains was made by the Office of the State Archaeologist Bioarchaeology Program professional staff in consultation with representatives of the Iowa Tribe of Kansas and Nebraska; the Iowa Tribe of Oklahoma; the Otoe-Missouria Tribe of Indians, Oklahoma; the Omaha Tribe of Nebraska; the Ponca Tribe of Indians of Oklahoma; and the Ponca Tribe of Nebraska.
At an unknown date, human remains representing, at minimum, five individuals were removed from site 13AM1 in Allamakee County, IA, by avocational archeologist H.P. Field. These human remains were discovered by Luther College in Decorah, IA, among the archeological materials from the site that had not received from Field. Following their discovery, Luther College transferred the human remains to the Office of the State Archaeologist Bioarchaeology Program in 2001. Four of the individuals are adults and are represented by four incomplete femora. The fifth individual, a child or young juvenile, is represented by a hand phalanx. Other incomplete adult bone fragments could not be assigned to any specific individual (Burial Project 1518). No known individuals were identified. No associated funerary objects are present.
At an unknown date, human remains representing, at minimum, one individual were removed from site 13AM10 in Allamakee County, IA. These human remains were discovered among archeological materials received from Luther College, in Decorah, IA, by the Missouri Department of Transportation. After being identified as originating from Iowa, the human remains were returned to Iowa and transferred to the Office of the State Archaeologist Bioarchaeology Program. Former Luther College anthropology professor Dale Henning reported the tooth originally may have been part of the Gavin Sampson Collection at the Luther College Archaeological Repository. The tooth represents a middle-aged to older adult of indeterminate sex (BP 2385). No known individuals were identified. No associated funerary objects are present.
At an unknown date, human remains representing, at minimum, one individual were removed from site 13AM21 in Allamakee County, IA, by avocational archeologist H.P. Field. These human remains were identified by Luther College, in Decorah, IA, among the archeological materials from the site that it had received from Field. Following their discovery, Luther College transferred the human remains to the Office of the State Archaeologist Bioarchaeology Program in 2001. The individual is represented by a nearly complete right temporal bone and is estimated to be approximately 2.5 to 3.5 years old (BP 1475). No known individuals were identified. No associated funerary objects are present.
In 1958, human remains representing, at minimum, one individual were removed from site 13AM43 in Allamakee County, IA. Additional human remains excavated from the same site, representing, at minimum, 29 individuals, were published in a previous Notice of Inventory Completion (62 FR, 53023-53025), and were reburied in Iowa in 1997 by the Office of the State Archaeologist Bioarchaeology Program. The human remains of one subadult had been mislabeled and were therefore not identified until recently. The individual is represented by a fairly complete skeleton and is estimated to be approximately 6-12 months old (BP 115). No known individuals were identified. No associated funerary objects are present.
At an unknown date, human remains representing, at minimum, three individuals were removed from site 13AM52 in Allamakee County, IA. Gavin Sampson, an avocational archeologist, collected materials from archeological sites primarily in Winneshiek and Allamakee Counties from the 1940s through the 1960s. In 1969, he donated his collection to Luther College in Decorah, IA. Among the Sampson Collection were human skeletal remains from site 13AM52. In 1995, Luther College transferred the human remains to the Office of the State Archaeologist Bioarchaeology Program. A young to middle-aged adult, possibly male, is represented by a hand phalanx and 22 foot bones. Two of the individuals are subadults, each of whom is represented by a single tooth. Their respective ages are estimated to be 9.7 to 11.1 years and 15.1 to 15.8 years (Burial Project 921). No known individuals were identified. No associated funerary objects are present.
At an unknown date, human remains representing, at minimum, seven individuals were removed from site 13AM59 in Allamakee County, IA. Somehow, these human remains were in the collections of Effigy Mounds National Monument. In 1987, Effigy Mounds National Monument transferred these human remains to the Office of the State Archaeologist Bioarchaeology Program. The incomplete and fragmentary human remains represent two subadults and five adults (BP 226). No known individuals were identified. No associated funerary objects are present.
In 1965, human remains representing, at minimum, one individual were removed from site 13AM60 in Allamakee County, IA. Avocational archeologist Gavin A. Sampson conducted several surface surveys of the Malone Cemetery (13AM60). Sampson salvaged several burials and the associated artifacts that had been disturbed by hog rooting activity. Human remains were also displaced from a burial on a ridge adjacent to the site. All human remains and artifacts were curated at Luther College in Decorah, IA. Human remains of the individual reported here were transferred from Luther College to the Office of the State Archaeologist Bioarchaeology Program, likely in the 1970s. The human remains represent an adult female approximately 25 to 35 years in age (BP 3094). No known individuals were identified. No associated funerary objects are present.
In 2002, human remains representing, at minimum, one individual were removed from site 13AM200 in Allamakee County, IA during an archeological field school conducted by Luther College, Decorah, IA. A bone fragment found at the base of a pit feature was identified as possibly human during laboratory analysis of the material recovered from the excavation. It was transferred to the Office of the State Archaeologist Bioarchaeology Program in 2002. The bone fragment, an incomplete left innominate fragment, represents an adult of indeterminate age and sex (BP 1589). No known individuals were identified. No associated funerary objects are present.
In either 1976 or 1980, human remains representing, at minimum, one individual were removed from site 13AM210 in Allamakee County, IA. Cultural and osteological material collected from the surface were housed at the Luther College Archaeological Laboratory, in Decorah, IA. During examination of the collections, two bone fragments collected in 1980 were identified as human. They were transferred to the Office of the State Archaeologist Bioarchaeology Program in 2003. The individual is represented by two long bone fragments. The individual is of an indeterminate age and sex (BP 1620). No known individuals were identified. No associated funerary objects are present.
At an unknown date, human remains representing, at minimum, one individual were removed from site 13AM404 in Allamakee County, IA. The human remains consist of a single human tooth recovered from the Oneota component of 13AM404 during Phase II archeological testing conducted by Bear Creek Archaeology Inc. in Cresco, IA. In 2006, the tooth was transferred to the Office of the State Archaeologist Bioarchaeology Program from the Luther College Archaeology Lab, Decorah, IA. The molar represents an adult of unknown age and sex (Burial Project 1971). No known individuals were identified. No associated funerary objects are present.
In 1998, human remains representing, at minimum, one individual were recovered from site 13CY2, Gillet Grove, in Clay County, IA, during an excavation by the Iowa Lakeside Laboratory Archaeological Field School under the direction of Joseph Tiffany. Soil samples were taken from storage pit features at the site, and then processed at the Iowa State University Archaeological Laboratory (ISUAL), in Ames, IA. A human tooth recovered from one of the samples and was transferred to the Office of the State Archaeologist Bioarchaeology Program in 1998. The tooth represents a young to middle-aged adult of unknown sex (Burial Project 1248). No known individuals were identified. No associated funerary objects are present.
In 1968, human remains representing, at minimum, three individuals were removed from site 13DM3 in Des Moines County, IA, during a summer field school excavation of the site by Grinnell College and University of Iowa students under the direction of Dean Straffin. All materials excavated were taken to the University of Iowa Geology Repository. In December 1996, University of Iowa geology professor Holmes Semken identified human skeletal remains in the Geology Repository collection from site 13DM3. The human remains were removed from the collection and transferred to the Office of the State Archaeologist Bioarchaeology Program. A radiocarbon date reported from the feature from which the human remains were removed is A.D. 1400 ± 95 years. The three individuals represent an older juvenile to young adult, and two subadults, aged about 3.5-4.5 years old and about 7-9 years (Burial Project 1097). No known individuals were identified. No associated funerary objects are present.
In 1971 and 1972, human remains representing, at minimum, two individuals were removed from site 13DM101 in Des Moines County, IA, during archeological excavations. The excavations were carried out by Dean Straffin, then of Parsons College, Fairfield, IA, under the auspices of the Office of the State Archaeologist. One cranial fragment was recovered, and was identified as human during laboratory examination of the collections in 1994 and 1995. The human remains were immediately transferred to the Office of the State Archaeologist Bioarchaeology Program. The human remains represent two older juvenile to young adult
In 1972, human remains representing, at minimum, two individuals were removed from site 13DM140 in Des Moines, IA. The human remains were exposed during the digging of a house foundation by homeowner Mike Kelley, who immediately stopped construction, removed the exposed bones, and contacted the Iowa Assistant State Archaeologist. An emergency archeological excavation was conducted at the site. The materials collected during the archeological excavation were kept at Parsons College in Fairfield, IA. Following the closure of Parsons College, the 13DM140 site collection was transferred to the Office of the State Archaeologist. During a meeting with R. Eric Hollinger in 1996, Kelley turned over the human skeletal remains he himself had collected from the exposed burial in 1972. These human remains were then transferred to the Office of the State Archaeologist Bioarchaeology Program, where they joined additional human remains from the same site. The human remains represent two adults, one aged 25-35 years, possibly female, and a possible male of unknown age (Burial Project 993). No known individuals were identified. No associated funerary objects are present.
In 1970 and 1996, human remains representing, at minimum, 14 individuals were removed from site 13LA1 in Louisa County, IA. The site has been the subject of archeological excavations on several occasions. Several test units were excavated at 13LA1 in 1970. In 1996, a summer field school was conducted by the University of Illinois-Urbana Department of Anthropology and the Iowa Archaeological Society at the site. All materials recovered in both 1970 and 1996 were housed in the Office of the State Archaeologist. All human remains collected were transferred to the Office of the State Archaeologist Bioarchaeology Program. The human remains represent four subadults, two older juveniles to young adults, six adults, and two individuals who could be either subadults or adults (BP 973, 1029, 1422). No known individuals were identified. No associated funerary objects are present.
At an unknown date, human remains representing, at minimum, two individuals were removed from site 13WD6 in Woodbury County, IA. These human remains were housed at the Sanford Museum in Cherokee, IA, until their transfer to the Office of the State Archaeologist Bioarchaeology Program, in 1997 and 2009. The human remains were likely removed during salvage excavations conducted in 1957 by members of the Iowa Archaeological Society, following disturbance to the site caused by quarrying operations. Other human remains known to have been recovered from this site in 1957 have previously been published in a notice (62 FR, 53023-53025) and reburied in Iowa. The human remains reported here represent one juvenile and one adult (Burial Project 1160, 3035). No known individuals were identified. No associated funerary objects are present.
At an unknown date, human remains representing, at minimum, one individual were removed from site 13WD7 in Woodbury County, IA. These human remains were collected by Amy Harvey, whose doctoral research focused on Oneota sites in Iowa. She received her doctorate degree from the University of Wisconsin-Madison in the 1960s. Later, she took a teaching position at Stephens College in Columbia, MO, and stored the materials she had collected for her doctoral research there. In 2010, the Office of the State Archaeologist located the human skeletal remains from site 13WD7 still stored at Stephens College, and in 2013, it transferred them to the Office of the State Archaeologist Bioarchaeology Program. How the human remains came to be in Harvey's possession is unknown. The individual is estimated to be an older juvenile or young adult (BP 2952). No known individuals were identified. No associated funerary objects are present.
In 1993, 1994, and 1996, human remains representing, at minimum, seven individuals were removed from site 13WD8 in Woodbury County, IA. In 1993, flood damage and erosion of 13WD8 exposed human remains at the site. On two separate occasions, an unknown collector, on an unknown date removed exposed human remains from the site. Human remains were also recovered during an archeological salvage excavation of the site in 1994. In 1996, students on a field trip reported additional human remains eroding from the west cut-bank of the Little Sioux River to the Woodbury County Sheriff, and the Office of the State Archaeologist was notified. All human remains were transferred to the Office of the State Archaeologist Bioarchaeology Program. They represent two young adults (one possible female and one of indeterminate sex), an adult of indeterminate sex, an older adult of indeterminate sex, a 25 to 35 year old male, a young juvenile of indeterminate sex, and a subadult approximately one to three years old (BP 950). No known individuals were identified. No associated funerary objects are present.
In 2000, human remains representing, at minimum, one individual were removed from site 13WD55 in Woodbury County, IA. In the spring of 2000, the Office of the State Archaeologist Bioarchaeology Program and members of the office's Indian Advisory Council visited site 13WD55 after being contacted by the Woodbury County Medical Examiner's office regarding exposed human remains in a burial near the Little Sioux River. Site 13WD55 is a late prehistoric, open habitation Oneota site with isolated burials. The individual is represented by a nearly complete skeleton and is estimated to be approximately 8-10 years of age (Burial Project 1391). No known individuals were identified. No associated funerary objects are present.
All human remains originating from the sites described above were determined to be associated with the Oneota tradition based on archeological evidence.
At an unknown date, human remains representing, at minimum, 14 individuals were removed from site 13AM60 in Allamakee County, IA. These human remains were part of the Collection made by Amy Harvey (described above). Human skeletal remains from 13AM60, which had been stored at Stephens College, were transferred to the Office of the State Archaeologist Bioarchaeology Program in 2013. How the human remains came to be in Harvey's possession is unknown. The commingled human remains represent 11 adults and three subadults. Among the adults are five possible males and two females. The three subadults represented are: A newborn-1.5 year-old, a 2.5-3.5 year-old, and a 7.5-9.5 year-old (Burial Project 2566, 2567). No known individuals were identified. No associated funerary objects are present.
The human remains from site 13AM60 are identified as associated with the Oneota tradition based on archeological and archival evidence.
At an unknown date, human remains representing, at minimum, two individuals were removed from an unknown site somewhere in Woodbury County, IA. The human remains were found by an unknown individual along the Little Sioux River, south of Correctionville, IA. Deputies from the Correctionville Sheriff's Office collected the human remains and additional materials from two other areas located farther south along the river. All human remains and artifacts collected were transferred to the Office of the State
The human remains from Woodbury County, IA, have been identified as associated with the Oneota tradition based on their proximity to several other Oneota sites in the area.
At an unknown date, human remains representing, at minimum, two individuals were removed from an unknown site in Iowa. These human remains were part of the collection made by Amy Harvey (described above). Human skeletal remains found in material labeled as “NE Iowa, Orr Focus,” which had been stored at Stephens College, were transferred to the Office of the State Archaeologist Bioarchaeology Program in 2010 and 2013. How the human remains came into Harvey's possession is unknown. The human remains represent an adult male aged approximately 30-50 years and an older adult of indeterminate sex (Burial Project 2893, 2955). No known individuals were identified. No associated funerary objects are present.
The human remains from the unknown site in Iowa have been identified as associated with the Oneota tradition based on osteological and archival evidence. All human remains reported in this Notice were identified as Native American based on documented association with, or proximity to, Oneota archeological sites.
Officials of the Office of the State Archaeologist Bioarchaeology Program have determined that:
• Pursuant to 25 U.S.C. 3001(9), the human remains described in this notice represent the physical remains of 73 individuals of Native American ancestry.
• Pursuant to 25 U.S.C. 3001(3)(A), there are no associated funerary objects included in this Notice.
• Pursuant to 25 U.S.C. 3001(2), there is a relationship of shared group identity that can be reasonably traced between the Native American human remains and the Iowa Tribe of Kansas and Nebraska; the Iowa Tribe of Oklahoma; the Otoe-Missouria Tribe of Indians, Oklahoma; the Omaha Tribe of Nebraska; the Ponca Tribe of Nebraska; and the Ponca Tribe of Indians of Oklahoma.
Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains should submit a written request with information in support of the request to Lara Noldner, Office of the State Archaeologist Bioarchaeology Program, University of Iowa, 700 S. Clinton Street, Iowa City, IA 52242, telephone (319) 384-0740, email
The Office of the State Archaeologist Bioarchaeology Program is responsible for notifying the Iowa Tribe of Kansas and Nebraska; the Iowa Tribe of Oklahoma; the Otoe-Missouria Tribe of Indians, Oklahoma; the Omaha Tribe of Nebraska; the Ponca Tribe of Nebraska; and the Ponca Tribe of Indians of Oklahoma that this notice has been published.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has found a violation of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337 (“section 337”) in the above-captioned investigation. The Commission has determined to issue a limited exclusion order. The investigation is terminated.
Megan M. Valentine, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 708-2301. Copies of non-confidential documents filed in connection with this investigation are or will be available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 205-2000. General information concerning the Commission may also be obtained by accessing its Internet server at
The Commission instituted this investigation on October 27, 2014, based on a Complaint filed by Nobel Biocare Services AG of Kloten, Switzerland and Nobel Biocare USA, LLC of Yorba Linda, California (collectively, “Nobel”), as supplemented. 79 FR 63940-41 (Oct. 27, 2014). The Complaint alleges violations of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337 (“section 337”), in the sale for importation, importation, and sale within the United States after importation of certain dental implants by reason of infringement of certain claims of U.S. Patent Nos. 8,714,977 (“the '977 patent”) and 8,764,443 (“the '443 patent”). The Complaint further alleges the existence of a domestic industry. The Commission's Notice of Investigation named as respondents Neodent USA, Inc., of Andover, Massachusetts and JJGC Indústria e Comércio de Materiais Dentários S/A of Curitiba, Brazil (collectively, “Respondents”). The Commission previously terminated the investigation in part as to certain claims of the '443 patent. Notice (Apr. 29, 2015); Order No. 22 (Apr. 8, 2015). The Commission also amended the Notice of Investigation to reflect the corporate name change of Neodent USA, Inc. to Instradent USA, Inc. Notice (May 6, 2015); Order No. 24 (Apr. 9, 2015). The use of the term “Respondents” herein refers to the current named respondents.
On October 27, 2015, the ALJ issued his final ID, finding a violation of section 337 with respect to asserted claims 15, 18, 19, 30, and 32 of the '443 patent, and finding no violation with respect to asserted claim 17 of the '443 patent and all of the asserted claims of the '977 patent. In particular, the final ID finds that the accused products infringe claims 1-5 and 19 of the '977
On November 10, 2015, the ALJ issued his recommended determination (“RD”) on remedy and bonding. The RD recommended that the appropriate remedy is a limited exclusion order barring entry of Respondents' infringing dental implants. The RD did not recommend issuance of a cease and desist order against any respondent. The RD recommended the imposition of a bond of $120 per imported unit during the period of Presidential review.
On November 9, 2015, Nobel filed a petition for review of the final ID's finding of no violation with respect to claims 1-5 of the '977 patent. In particular, Nobel requested review of the final ID's finding that the March 2003 Product Catalog of Alpha Bio Tec, Ltd. (“the 2003 Alpha Bio Tec Catalog”) constitutes prior art under 35 U.S.C. 102(b), arguing that the catalog was not sufficiently publicly accessible prior to the critical date. Nobel also requested, if the Commission determines not to review the ID's prior art finding, that the Commission review the final ID's construction of the limitation “the coronal region having a frustoconical shape” recited in claim 1 of the '977 patent and, accordingly, review the final ID's finding that the accused products do not infringe claims 1-5 of the '977 patent under Nobel's proposed construction of that limitation. Nobel further argued that, should the Commission agree partially with Nobel concerning the proper construction of the limitation “the coronal region having a frustoconical shape,” the 2003 Alpha-Bio Tec Catalog does not anticipate the asserted claims of the '977 patent.
No party petitioned for review of the final ID's finding that there is a violation of section 337 with respect to the '443 patent.
On November 17, 2015, Respondents and the Commission investigative attorney each filed responses opposing Nobel's petition for review.
On December 10, 2015, Respondents submited a post-RD statement on the public interest pursuant to Commission Rule 210.50(a)(4). On December 14, 2015, Nobel submited a post-RD statement on the public interest pursuant to Commission Rule 210.50(a)(4). No responses were filed by the public in response to the post-RD Commission Notice issued on November 12, 2015.
On January 14, 2016, the Commission determined to review the Final ID in part with respect to the '977 patent. 81 FR 3471-3473 (Jan. 21, 2016). Specifically, the Commission determined to review the final ID's construction of the limitation “coronal region having a frustoconical shape” recited in claim 1 of the '977 patent with regard to whether or not the term “frustoconical shape” is an adjective that modifies the claimed “coronal region” or whether the term is an independent structure that may comprise only a portion of the claimed “coronal region.” In accordance with its claim construction review, the Commission further determined to review the final ID's infringement findings with respect to claims 1-5 of the '977 patent, as well as the final ID's finding that the technical prong of the domestic industry requirement is satisfied with respect to claims 1-5 of the '977 patent. The Commission also determined to review the final ID's finding that the 2003 Alpha Bio Tec Catalog is a printed publication under 35 U.S.C. 102. The Commission further determined to review the final ID's finding that the 2003 Alpha Bio Tec Catalog anticipates claims 1-5 of the '977 patent. In connection with its review, the Commission requested briefing on several questions.
The Commission determined not to review the remaining issues decided in the final ID, including any of the Final ID's findings with respect to the '443 patent. The Commission also denied a motion filed by Nobel to amend the Administrative Protective Order issued in this investigation to add specific provisions permitting the use of discovery from this investigation in two co-pending proceedings in the U.S. Patent and Trademark Office captioned as
On January 21, 2016, the parties filed initial submissions in response to the Commission's request for written submissions. On January 28, 2016, the parties filed response submissions.
Having examined the record of this investigation, including the final ID, the petitions for review, and the responses thereto, and the parties' submissions on review, the Commission has determined to find that a violation of section 337 has occurred. The Commission has determined that the appropriate form of relief is a limited exclusion order under 19 U.S.C. 1337(d)(1), prohibiting the unlicensed entry of dental implants that infringe any of claims 1-5 of the '977 patent and claims 15, 18, 19, 30, and 32 of the '443 patent.
The Commission has further determined that consideration of the public interest factors enumerated in section 337(d) (19 U.S.C. 1337(d)) does not preclude issuance of the limited exclusion order. The Commission has determined that the bond for temporary importation during the period of Presidential review (19 U.S.C. 1337(j)) shall be in the amount of $120 per unit of articles subject to the exclusion order. The Commission's order was delivered to the President and the United States Trade Representative on the day of its issuance.
The investigation is terminated.
The authority for the Commission's determination is contained in section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in Part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).
By order of the Commission.
United States International Trade Commission.
Notice.
The Commission hereby gives notice that it has instituted a review pursuant to the Tariff Act of 1930 (“the Act”), as amended, to determine whether revocation of the antidumping
Mary Messer (202-205-3193), Office of Investigations, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its Internet server (
(1)
(2) The
(3) The
(4) The
(5) An
Former Commission employees who are seeking to appear in Commission five-year reviews are advised that they may appear in a review even if they participated personally and substantially in the corresponding underlying original investigation or an earlier review of the same underlying investigation. The Commission's designated agency ethics official has advised that a five-year review is not the same particular matter as the underlying original investigation, and a five-year review is not the same particular matter as an earlier review of the same underlying investigation for purposes of 18 U.S.C. 207, the post employment statute for Federal employees, and Commission rule 201.15(b) (19 CFR 201.15(b)), 79 FR 3246 (Jan. 17, 2014), 73 FR 24609 (May 5, 2008). Consequently, former employees are not required to seek Commission approval to appear in a review under Commission rule 19 CFR 201.15, even if the corresponding underlying original investigation or an earlier review of the same underlying investigation was pending when they were Commission employees. For further ethics advice on this matter, contact Carol McCue Verratti, Deputy Agency Ethics Official, at 202-205-3088.
(1) The name and address of your firm or entity (including World Wide Web address) and name, telephone number, fax number, and Email address of the certifying official.
(2) A statement indicating whether your firm/entity is a U.S. producer of the
(3) A statement indicating whether your firm/entity is willing to participate in this proceeding by providing information requested by the Commission.
(4) A statement of the likely effects of the revocation of the antidumping duty order on the
(5) A list of all known and currently operating U.S. producers of the
(6) A list of all known and currently operating U.S. importers of the
(7) A list of 3-5 leading purchasers in the U.S. market for the
(8) A list of known sources of information on national or regional prices for the
(9) If you are a U.S. producer of the
(a) Production (quantity) and, if known, an estimate of the percentage of total U.S. production of the
(b) Capacity (quantity) of your firm to produce the
(c) the quantity and value of U.S. commercial shipments of the
(d) the quantity and value of U.S. internal consumption/company transfers of the
(e) the value of (i) net sales, (ii) cost of goods sold (COGS), (iii) gross profit, (iv) selling, general and administrative (SG&A) expenses, and (v) operating income of the
(10) If you are a U.S. importer or a trade/business association of U.S. importers of the
(a) The quantity and value (landed, duty-paid but not including antidumping duties) of U.S. imports and, if known, an estimate of the percentage of total U.S. imports of
(b) the quantity and value (f.o.b. U.S. port, including antidumping and/or countervailing duties) of U.S.
(c) the quantity and value (f.o.b. U.S. port, including antidumping duties) of U.S. internal consumption/company transfers of
(11) If you are a producer, an exporter, or a trade/business association of producers or exporters of the
(a) Production (quantity) and, if known, an estimate of the percentage of total production of
(b) Capacity (quantity) of your firm(s) to produce the
(c) the quantity and value of your firm's(s') exports to the United States of
(12) Identify significant changes, if any, in the supply and demand conditions or business cycle for the
(13) (Optional) A statement of whether you agree with the above definitions of the
This proceeding is being conducted under authority of Title VII of the Tariff Act of 1930; this notice is published pursuant to section 207.61 of the Commission's rules.
By order of the Commission.
Federal Bureau of Investigation (FBI), DOJ.
Meeting notice.
The purpose of this notice is to announce the meeting of the Federal Bureau of Investigation's Criminal Justice Information Services (CJIS) Advisory Policy Board (APB). The CJIS APB is a federal advisory committee established pursuant to the Federal Advisory Committee Act (FACA). This meeting announcement is being published as required by Section 10 of the FACA.
The APB will meet in open session from 8:30 a.m. until 5 p.m., on June 8-9, 2016.
The meeting will take place at Norfolk Waterside Marriott Hotel & Convention Center, 235 East Main Street, Norfolk, VA 23510, telephone (757) 627-4200.
Inquiries may be addressed to Ms. Kara Delmont; Management Program Assistant; CJIS Training and Advisory Process Unit, Resources Management Section; FBI CJIS Division, Module C2, 1000 Custer Hollow Road, Clarksburg, West Virginia 26306-0149; telephone (304) 625-5859, facsimile (304) 625-5090.
The FBI CJIS APB is responsible for reviewing policy issues and appropriate technical and operational issues related to the programs administered by the FBI's CJIS Division, and thereafter, making appropriate recommendations to the FBI Director. The programs administered by the CJIS Division are the Next Generation Identification, Interstate Identification Index, Law Enforcement Enterprise Portal, National Crime Information Center, National Instant Criminal Background Check System, National Incident-Based Reporting System, National Data Exchange, and Uniform Crime Reporting.
This meeting is open to the public. All attendees will be required to check-in at the meeting registration desk. Registrations will be accepted on a space available basis. Interested persons whose registrations have been accepted may be permitted to participate in the discussions at the discretion of the meeting chairman and with approval of the Designated Federal Officer (DFO). Any member of the public may file a written statement with the Board. Written comments shall be focused on the APB's current issues under discussion and may not be repetitive of previously submitted written statements. Written comments should be provided to Mr. R. Scott Trent, DFO, at least seven (7) days in advance of the meeting so that the comments may be made available to the APB for their consideration prior to the meeting.
Anyone requiring special accommodations should notify Mr. Trent at least seven (7) days in advance of the meeting.
On April 22, 2016, the Department of Justice lodged two proposed consent decrees with the United States District Court for the Eastern District of Tennessee in the lawsuit entitled
The United States, on behalf of the U.S. Environmental Protection Agency (“EPA”), and the State of Tennessee, on behalf of the Tennessee Department of Environment and Conservation (“TDEC”), filed this lawsuit under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The complaint requests performance of response actions to address Operable Units 3 and 5 of the Copper Basin Mining District Superfund Site in Polk County, Tennessee, recovery of costs that the United States has incurred responding to releases of hazardous substances at the site, and recovery of costs that the United States and the State of Tennessee will incur overseeing implementation of the remedies at Operable Units 3 and 5 at the site.
The proposed consent decrees would resolve the claims alleged in the complaint and provides for implementation of remedies at Operable Units 3 and 5 that EPA and TDEC will oversee. The proposed Operable Unit 3 consent decree requires OXY USA Inc. to implement the remedy selected by EPA for Operable Unit 3, pay EPA $10,779,509 in unreimbursed response costs at the site, and to pay future response costs incurred by EPA and TDEC at Operable Unit 3. The proposed Operable Unit 3 consent decree also includes the United States Departments of the Army, Commerce, and Defense as settling federal agencies as the successor to the former federal government owner and operator of the site, and provides that the United States, on behalf of those agencies, will reimburse OXY USA Inc. for a portion of its costs incurred at the site.
The proposed Operable Unit 5 consent decree requires OXY USA Inc. to implement the remedy selected by EPA for Operable Unit 5, and to pay future response costs incurred by EPA and TDEC at Operable Unit 5. The proposed Operable Unit 5 consent decree also includes the Tennessee Valley Authority as an implementing federal agency that will participate in the implementation of the remedial action selected by EPA.
The publication of this notice opens a period for public comment on the consent decrees. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the proposed consent decrees may be examined and downloaded at this Justice Department Web site:
Please enclose a check or money order for $79.25 for the proposed Operable Unit 3 consent decree and/or $102 for the proposed Operable Unit 5 consent decree (25 cents per page reproduction cost) payable to the United States Treasury. For a paper copy without the exhibits and signature pages, the cost is $12.25 for the proposed Operable Unit 3 consent decree and $13 for the proposed Operable Unit 5 consent decree.
Notice.
The Department of Labor (DOL) is submitting the Bureau of Labor Statistics (BLS) sponsored information collection request (ICR) revision titled, “Consumer Expenditure Surveys: Quarterly Interview and Diary,” to the Office of Management and Budget (OMB) for review and approval for use in accordance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501
The OMB will consider all written comments that agency receives on or before June 1, 2016.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov Web site at
Submit comments about this request by mail or courier to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-BLS, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202-395-5806 (this is not a toll-free number); or by email:
Michel Smyth by telephone at 202-693-4129, TTY 202-693-8064, (these are not toll-free numbers) or sending an email to
This ICR seeks approval under the PRA for revisions to the Consumer Expenditure Surveys: Quarterly Interview and Diary. The BLS uses the Consumer Expenditure Surveys to gather information on expenditures, income, and other related subjects. These data are used periodically to update the national Consumer Price Index. In addition, the data are used by a variety of researchers in academia, government agencies, and the private sector. The data are collected from a national probability sample of households designed to represent the total civilian non-institutional population. This information collection has been classified as a revision, because of the
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
44 U.S.C. 3507(a)(1)(D).
Notice.
The Department of Labor (DOL) is submitting the Bureau of Labor Statistics (BLS) sponsored information collection request (ICR) titled, “American Time Use Survey—Eating and Health Supplement,” to the Office of Management and Budget (OMB) for review and approval for continued use, without change, in accordance with the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501
The OMB will consider all written comments that agency receives on or before June 1, 2016.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov Web site at
Submit comments about this request by mail or courier to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-BLS, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202-395-5806 (this is not a toll-free number); or by email:
Michel Smyth by telephone at 202-693-4129, TTY 202-693-8064, (these are not toll-free numbers) or by email at
This ICR seeks to extend PRA authority for the American Time Use Survey-Eating and Health Supplement information collection. The Eating and Health module supplement includes questions about respondents' eating and drinking behaviors, food assistance participation, grocery and meal shopping, food preparation, and food sufficiency. It also includes questions on general health and physical exercise. Information collected in the supplement will be published as a public use data set to facilitate research on numerous topics, such as the association between eating patterns, body mass index, and obesity; time-use patterns of food assistance program participants and low-income nonparticipants; time-use patterns and eating and activity levels; and how time-use varies by health status. The supplement is asked of respondents immediately upon their completion of the American Time Use Survey. The supplement surveys individuals aged 15 and up from a nationally representative sample of approximately 2,100 sample households each month. The BLS Authorizing Statue authorizes this information collection.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject
OMB authorization for an ICR cannot be for more than three (3) years without renewal, and the current approval for this collection is scheduled to expire on June 30, 2016. The DOL seeks to extend PRA authorization for this information collection for use through June 2017, without any change to existing requirements. The DOL notes that existing information collection requirements submitted to the OMB receive a month-to-month extension while they undergo review. For additional substantive information about this ICR, see the related notice published in the
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
44 U.S.C. 3507(a)(1)(D).
Notice.
The Department of Labor (DOL) is submitting the Wage and Hour Division (WHD) sponsored information collection request (ICR) titled, “Requests to Approve Conformed Wage Classifications and Unconventional Fringe Benefit Plans Under the Davis-Bacon and Related Acts and Contract Work Hours and Safety Standards Act,” to the Office of Management and Budget (OMB) for review and approval for continued use, without change, in accordance with the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501
The OMB will consider all written comments that agency receives on or before June 1, 2016.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov Web site at
Submit comments about this request by mail or courier to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-WHD, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202-395-5806 (this is not a toll-free number); or by email:
Michel Smyth by telephone at 202-693-4129, TTY 202-693-8064, (these are not toll-free numbers) or by email at
This ICR seeks to extend PRA authority for the Requests to Approve Conformed Wage Classifications and Unconventional Fringe Benefit Plans Under the Davis-Bacon and Related Acts and Contract Work Hours and Safety Standards Act information collection. Regulations 29 CFR part 5 prescribe labor standards for Federally financed and assisted construction contracts subject to the Davis-Bacon Act (DBA), 40 U.S.C. 3141
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
OMB authorization for an ICR cannot be for more than three (3) years without renewal, and the current approval for this collection is scheduled to expire on May 31, 2016. The DOL seeks to extend PRA authorization for this information collection for three (3) more years, without any change to existing requirements. The DOL notes that existing information collection requirements submitted to the OMB receive a month-to-month extension while they undergo review. For additional substantive information about this ICR, see the related notice published in the
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
44 U.S.C. 3507(a)(1)(D).
Notice.
The Department of Labor (DOL) is submitting the Employment and Training Administration (ETA) sponsored information collection request (ICR) titled, “Worker Profiling and Reemployment Services Activities and Worker Profiling and Reemployment Outcomes,” to the Office of Management and Budget (OMB) for review and approval for continued use, without change, in accordance with the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501
The OMB will consider all written comments that agency receives on or before June 1, 2016.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov Web site at
Submit comments about this request by mail or courier to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-ETA, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202-395-5806 (this is not a toll-free number); or by email:
Michel Smyth by telephone at 202-693-4129, TTY 202-693-8064, (these are not toll-free numbers) or by email at
This ICR seeks to extend PRA authority for the Worker Profiling and Reemployment Services Activities and Worker Profiling and Reemployment Outcomes information collection. Reporting Forms ETA-9048 and ETA-9049 are used to identify those claimants who are most likely to exhaust their Unemployment Insurance benefits and to provide reemployment services to expedite those beneficiaries return to suitable work. The ETA-9048 report provides a count of the claimants who were referred to Worker Profiling and Reemployment Services (WPRS) and a count of those who completed the services. The ETA-9049 report provides the subsequent collection of wage records, which is a useful management tool for monitoring the success of the WPRS program in the State. This ICR also covers preliminary activities when States collect information from program beneficiaries. Social Security Act sections303 (a)(6) and (j) authorize this information collection.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
OMB authorization for an ICR cannot be for more than three (3) years without renewal, and the current approval for this collection is scheduled to expire on May 31, 2016. The DOL seeks to extend PRA authorization for this information collection for three (3) more years, without any change to existing requirements. The DOL notes that
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
44 U.S.C. 3507(a)(1)(D).
National Aeronautics and Space Administration.
Notice of intent to grant exclusive license.
This notice is issued in accordance with 35 U.S.C. 209(e) and 37 CFR 404.7(a)(1)(i). NASA hereby gives notice of its intent to grant an exclusive license in the United States to practice the invention described and claimed NASA Case Number MFS-33317-1 entitled “Disruptive Tuned Mass (DTM)” to Linc Research, Inc., having its principal place of business in Huntsville, Alabama. The patent rights in this invention have been assigned to the United States of America as represented by the Administrator of the National Aeronautics and Space Administration and to Linc Research, Inc. The prospective exclusive license will comply with the terms and conditions of 35 U.S.C. 209 and 37 CFR 404.7. NASA has not yet made a determination to grant the requested license and may deny the requested license even if no objections are submitted within the comment period.
The prospective exclusive license may be granted unless, within fifteen (15) days from the date of this published notice, NASA receives written objections including evidence and argument that establish that the grant of the license would not be consistent with the requirements of 35 U.S.C. 209 and 37 CFR 404.7. Competing applications completed and received by NASA within fifteen (15) days of the date of this published notice will also be treated as objections to the grant of the contemplated exclusive license.
Objections submitted in response to this notice will not be made available to the public for inspection and, to the extent permitted by law, will not be released under the Freedom of Information Act, 5 U.S.C. 552.
Objections relating to the prospective license may be submitted to Mr. James J. McGroary, Chief Patent Counsel/LS01, Marshall Space Flight Center, Huntsville, AL 35812, (256) 544-0013.
Mr. Sammy A. Nabors, Technology Transfer Office/ZP30, Marshall Space Flight Center, Huntsville, AL 35812, (256) 544-5226. Information about other NASA inventions available for licensing can be found online at
Institute of Museum and Library Services, National Foundation for the Arts and the Humanities
Notice, request for comments, collection of information.
The Institute of Museum and Library Service (“IMLS”) as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act (44 U.S.C. 3501
A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Written comments must be submitted to the office listed in the
IMLS is particularly interested in comments that help the agency to:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information including the validity of the methodology and assumptions used;
• Enhance the quality, utility and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology,
For a copy of the documents contact: Kim A. Miller, Grants Specialist (Detailee), Office of the Chief Financial Officer, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW., Suite 4000, Washington, DC 20024-2135. Ms. Miller can be reached by
The Institute of Museum and Library Services (IMLS) is an independent Federal grant-making agency and is the primary source of federal support for the Nation's 123,000 libraries and 35,000 museums. IMLS provides a variety of grant programs to assist the Nation's museums and libraries in improving their operations and enhancing their services to the public. The IMLS Grants to States program is the largest source of federal funding support for library services in the United States. Using a population-based formula, more than $150 million is distributed among the State Library Administrative Agencies.
The Library Services and Technology Act requires each State Library Administrative Agency to submit a plan that details library services goals for a five-year period. Pursuant to 20 U.S.C. 9134, each State Library Administrative Agency (SLAA) that receives an IMLS grant under the Grants to States Program is required to evaluate and report to the agency, prior to the end of their five-year plan, regarding the activities assisted under the LSTA. Each SLAA receives IMLS funding to support the five year period through a series of overlapping two year grant awards. Each SLAA must file interim and final financial reports, as well as final performance reports for each of these two year grants through IMLS' State Program Reporting (SPR) system. The purpose of the proposed information collection is to enhance the reporting of the two year grants through enhanced evaluation and performance measures of beneficiaries.
Stephanie Burwell, Chief Information Officer, Office of the Chief Information Officer, Institute of Museum and Library Services, 955 L'Enfant Plaza North SW., Suite 4000, Washington, DC 20024-2135. Ms. Burwell can be reached by
9:30 a.m., Tuesday, May 17, 2016.
NTSB Conference Center, 429 L'Enfant Plaza SW., Washington, DC 20594.
The one item is open to the public.
Telephone: (202) 314-6100.
The press and public may enter the NTSB Conference Center one hour prior to the meeting for set up and seating.
Individuals requesting specific accommodations should contact Rochelle Hall at (202) 314-6305 or by email at
The public may view the meeting via a live or archived webcast by accessing a link under “News & Events” on the NTSB home page at
Schedule updates, including weather-related cancellations, are also available at
Candi Bing at (202) 314-6403 or by email at
Peter Knudson at (202) 314-6100 or by email at
On January 6, 2016, The NASDAQ Stock Market LLC (“Nasdaq” or the “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”)
Nasdaq proposes to list and trade Shares of the Fund under Nasdaq Rule 5735, which governs the listing and trading of Managed Fund Shares on the Exchange. The Shares will be offered by the First Trust Exchange-Traded Fund III (“Trust”), a Massachusetts business trust registered with the Commission as an open-end investment company.
The Exchange has made the following representations and statements in describing the Fund and its investment strategy, including other portfolio holdings and investment restrictions.
The primary investment objective of the Fund will be to generate current income that is exempt from regular federal income taxes, and its secondary objective will be long-term capital appreciation. Under normal market conditions,
Under normal market conditions, the Fund will invest at least 65% of its net assets in Municipal Securities that are, at the time of investment, rated below investment grade (
The Exchange represents that the non-principal investments listed below would consist of investments that are not included in the Fund's 80% Policy. Such assets may be invested in the Fixed Income Instruments and other instruments, as described below.
Under normal market conditions, the Fund will invest substantially all of its assets to meet its investment objectives as described above. In addition, the Fund may invest its assets or hold cash as generally described below.
The Exchange represents that the Fund may invest up to 10% of its net assets in taxable municipal securities. The Fund may also invest up to 10% of its net assets in short-term debt instruments,
With respect to up to 20% of its net assets, the Fund may (i) invest in the securities of other investment companies registered under the 1940 Act, including money market funds, other ETFs, open-end funds (other than money market funds and other ETFs), and closed-end funds and (ii) acquire short positions in the securities of the foregoing investment companies.
With respect to up to 20% of its net assets, the Fund may (i) invest in exchange-listed options on U.S. Treasury securities, exchange-listed options on U.S. Treasury futures contracts, and exchange-listed U.S. Treasury futures contracts and (ii) acquire short positions in the foregoing derivatives. Transactions in the foregoing derivatives may allow the Fund to obtain net long or short exposures to selected interest rates. These derivatives may also be used to hedge risks, including interest rate risks and credit risks, associated with the Fund's portfolio investments. The Fund's investments in derivative instruments will be consistent with the Fund's investment objectives and the 1940 Act and will not be used to seek to achieve a multiple or inverse multiple of an index.
The Exchange represents that the Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment), including Rule 144A securities deemed illiquid by the Adviser.
The Fund may not invest 25% or more of the value of its total assets in securities of issuers in any one industry, although this restriction does not apply to (a) Municipal Securities issued by governments or political subdivisions of governments, (b) obligations issued or guaranteed by the U.S. government, its agencies or instrumentalities, or (c) securities of other investment companies.
The Fund will be actively managed and will not be tied to an index. Under normal market conditions, on a continuous basis determined at the time of purchase, its portfolio of Municipal Securities
The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act
Pursuant to Section 19(b)(2)(B) of the Act,
The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposal is consistent with Section 6(b)(5) or any other provision of the Act, or the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4, any request for an opportunity to make an oral presentation.
Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved by May 23, 2016. Any person who wishes to file a rebuttal to any other person's submission must file that rebuttal by June 6, 2016. The Commission asks that commenters address the sufficiency of the Exchange's statements in support of the proposal, which are set forth in the Notice
The Exchange provides that the Fund may invest in one or more of the following broad categories of Municipal Securities:
Apart from these broad representations, the Exchange provides no other information about the kinds of municipal bonds in which the Fund may invest. Accordingly, the Commission seeks comment on whether the Exchange's representations relating to the Municipal Securities to be held by the Fund are sufficient to limit the susceptibility of the portfolio to manipulation, and are consistent with the requirements of Section 6(b)(5) of the Act, which, among other things, requires that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices.
Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On March 4, 2016, New York Stock Exchange LLC (“Exchange” or “NYSE”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend NYSE Rule 98 to provide that when DMMs
The Exchange represents that in 2014 it amended NYSE Rule 98 to adopt a principles-based approach to prohibit the misuse of material nonpublic information by a member organization that operates a DMM unit and to make conforming changes to other Exchange rules.
The Exchange states that NYSE Rule 98(c) sets forth specific restrictions on the operation of a DMM unit.
According to the Exchange, because NYSE Rule 98(c)(4) currently requires that any interest entered into Exchange systems by the DMM unit in DMM securities be identifiable as DMM interest, a DMM unit that is integrated with a customer-facing unit and that sends customer orders in DMM securities to the Exchange in a proprietary capacity must identify those customer orders as DMM interest. As a result, although agency orders are not subject to DMM rules, customer-driven interest entered by a DMM unit on a proprietary basis is subject to all DMM rules.
The Exchange states that none of its member organizations operating a DMM have integrated a DMM unit with a customer-facing trading unit. The Exchange believes that the current rule requiring customer-driven orders that are represented on a proprietary basis to be designated as DMM interest has served as a barrier to achieving such integration.
The Exchange proposes to replace the phrase “any interest” with the phrase “proprietary interest” in NYSE Rule 98(c)(4) to clarify that the existing rule only governs proprietary interest of a DMM unit,
The Exchange also proposes to amend NYSE Rule 98(c)(4) to specify that a DMM unit must use a unique mnemonic that identifies to the Exchange its customer-driven orders in DMM securities. Such mnemonics may not be used for trading activity at the Exchange in DMM securities that are not customer-driven orders, but may be used for trading activities in securities not assigned to the DMM. The Exchange believes that requiring a separate mnemonic for customer-driven orders would assist the Exchange in monitoring DMM unit compliance with the proposed rule.
The Exchange further proposes to amend NYSE Rule 98(d) to specify that the rules, fees, or credits applicable to DMM quoting or trading activity would apply only to a DMM unit's quoting or trading in its DMM securities that is for its own account at the Exchange and that has been identified as DMM interest. In addition, the Exchange proposes to add text to NYSE Rule 98(d) to state that (1) customer-driven orders for the account of a DMM unit that have not been identified as DMM interest would not be subject to DMM rules or be eligible for any fees or credits applicable to DMM quoting or trading activity; and (2) customer-driven orders not designated as DMM interest would not be subject to DMM rules, which include restrictions on the availability of certain order types and the entry of specified orders during the last ten minutes of trading.
The Exchange represents that the NYSE Rule 98(c)(5) obligation to provide the Exchange with real-time net position information in DMM securities would continue to be applicable to the DMM unit's position in DMM securities together with any position of a Regulation SHO independent trading unit of which the DMM unit may be included, regardless of whether they are positions resulting from trades in away markets, trades as a result of DMM interest entered at the Exchange, or customer-driven orders routed to the Exchange that were not identified as DMM interest.
After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
The Commission believes that the proposed rule change will help to remove impediments to and perfect the mechanism of a free and open market and a national market system, and to protect investors and the public interest, because the Exchange has proposed a mechanism that is reasonably designed to distinguish a DMM unit's own proprietary trading on the Exchange in its assigned securities from a DMM unit's activity in representing customer orders as principal. In light of the market-making privileges and obligations of DMMs, the Exchange has
The Commission also notes that the Exchange's proposal includes certain safeguards that should help to prevent potential mismarking of orders as “customer-driven orders” and to assist the Exchange in monitoring for compliance by DMM units with Rule 98 as amended. The Commission notes that, under the proposal, all proprietary interest entered into Exchange systems by the DMM unit in DMM securities will be considered DMM unit interest unless that interest is (1) for the purpose of facilitating the execution of an order that has already been received from a customer (whether the DMM unit's own customer or the customer of another broker-dealer); and (2) represented on a riskless principal basis, or on a principal basis to provide price improvement to the customer. Moreover, the Commission notes that a DMM unit must use a unique mnemonic that identifies to the Exchange its customer-driven orders in DMM securities.
Finally, the Commission notes that the Exchange represents that this proposed rule change would not alter in any way a member organization's existing obligations under Section 15(g) of the Act,
For the above reasons, the Commission finds that the proposal, as modified by Amendment No. 1, is consistent with the requirements of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether Amendment No. 1 to the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 1, prior to the 30th day after the date of publication of notice of Amendment No. 1 in the
The Commission believes that the revisions proposed in Amendment No. 1 are designed to prevent abuse and facilitate surveillance of the new rules. Therefore, the Commission finds that Amendment No. 1 is consistent with the protection of investors and the public interest.
Accordingly, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (“PRA”) (44 U.S.C. 3501
Section 6 of the Act sets out a framework for the registration and regulation of national securities exchanges. Under Rule 6a-3, one of the rules that implements Section 6, a national securities exchange (or an exchange exempted from registration as a national securities exchange based on limited trading volume) must provide certain supplemental information to the Commission, including any material (including notices, circulars, bulletins, lists, and periodicals) issued or made generally available to members of, or participants or subscribers to, the exchange. Rule 6a-3 also requires the exchanges to file monthly reports that set forth the volume and aggregate dollar amount of certain securities sold on the exchange each month.
The information required to be filed with the Commission pursuant to Rule 6a-3 is designed to enable the Commission to carry out its statutorily mandated oversight functions and to ensure that registered and exempt exchanges continue to be in compliance with the Act.
The Commission estimates that each respondent makes approximately 12 such filings on an annual basis at an average cost of approximately $20 per response. Currently, 19 respondents (19 national securities exchanges) are subject to the collection of information requirements of Rule 6a-3. The Commission estimates that the total burden for all respondents is 114 hours and $4,560 per year.
Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number.
Please direct your written comments to: Pamela Dyson, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street NE., Washington, DC 20549, or send an email to:
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The proposed rule change consists of amendments to NSCC's Rules and Procedures (“Rules”) to remove from the DTCC Limit Monitoring tool the alert that is sent to Members when trading activity in any of their Risk Entities reaches 50% of the pre-set trading limits for that Risk Entity and to make technical revisions, as described in greater detail below.
In its filing with the Commission, the clearing agency included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The clearing agency has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
NSCC provides its Members with a risk management tool called DTCC Limit Monitoring, for which certain types of Members are required to register.
Since the implementation of DTCC Limit Monitoring in 2014, NSCC has
Additionally, NSCC is proposing to make technical revisions to Procedure XVII (DTCC Limit Monitoring Procedure) primarily to revise the verb tense and add clarity regarding use of the tool.
The proposed rule change would address concerns that (1) the 50% early warning alert is set too low and, thus, may not provide Members with useful information for purposes of effective post-trade monitoring; (2) the frequency of the 50% early warning alert could have a negative impact on Member responsiveness to more critical alerts; and (3) the verb tense and certain other language in the Rule may be unclear and/or technically inaccurate.
The proposed rule change would remove the 50% early warning alert from DTCC Limit Monitoring. DTCC Limit Monitoring would retain the 75% and 90% early warning alerts, which continue to provide Members with valuable notice of changes in their post-trade activity for purposes of effective risk management.
Additionally, the proposed rule change would make certain technical changes that would clarify the Rule, primarily by updating the verb tense from future tense to present tense to reflect the present applicability of the Rule and by making certain other technical clarifications to language used in the Rule.
Members that use DTCC Limit Monitoring would no longer receive the 50% early warning alert, but they would continue to receive alerts when their trading activity in each Risk Entity reaches 75% and 90% of their pre-set trading limits. No other changes are proposed with respect to the functioning of DTCC Limit Monitoring.
The proposed technical changes are not anticipated to have any effect on Members that use DTCC Limit Monitoring.
Members that use DTCC Limit Monitoring would not have to take any action as a result of the proposed rule change, and NSCC is not aware of any problems that Members would have in continuing to comply with the Rules
As stated above, the proposed technical changes are not anticipated to have any effect on Members that use DTCC Limit Monitoring.
In order to implement this proposed rule change, NSCC would amend Section 4 of Procedure XVII (DTCC Limit Monitoring Procedure) of the Rules to remove reference to the 50% early warning alert and to make certain technical clarifications to language used in the Rule, primarily by updating the verb tense used therein. No other changes to the Rules are contemplated by this proposed rule change.
Section 17A(b)(3)(F) of the Act requires, in part, that the Rules be designed to promote the prompt and accurate clearance and settlement of securities transactions and to protect investors and the public interest.
By removing the 50% early warning limit alert, which may not provide Members with information that is useful for purposes of post-trade monitoring, but, rather, may distract Members from such information, the proposed rule change would make DTCC Limit Monitoring a more effective tool for Members to monitor their post-trade activity and would enhance their ability to manage risks, facilitating the protection of investors and the public interest from such risks.
Additionally, the proposed technical changes to the Rule, which primarily update the verb tense from future tense to present tense, would provide additional clarity to NSCC Members and would ensure the accuracy of it [sic] Rules by reflecting the current, rather than the future, applicability of the DTCC Limit Monitoring Rule.
Therefore, NSCC believes the proposed rule change would protect investors and the public interest, consistent with the requirements of Section 17A(b)(3)(F) of the Act, cited above.
NSCC does not believe that the proposed rule change would have any impact on competition because the proposal would apply equally to all Members that use DTCC Limit Monitoring.
NSCC has not received any written comments relating to this proposal. NSCC will notify the Commission of any written comments received by NSCC.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (“PRA”) (44 U.S.C. 3501
Regulation ATS sets forth a regulatory regime for “alternative trading systems” (“ATSs”), which are entities that carry out exchange functions but which are not required to register as national securities exchanges under the Act. In lieu of exchange registration, an ATS can instead opt to register with the Commission as a broker-dealer and, as a condition to not having to register as an exchange, must instead comply with Regulation ATS. Rule 303 of Regulation ATS (17 CFR 242.303) describes the record preservation requirements for ATSs. Rule 303 also describes how such records must be maintained, what entities may perform this function, and how long records must be preserved.
Under Rule 303, ATSs are required to preserve all records made pursuant to Rule 302, which includes information relating to subscribers, trading summaries, and time-sequenced order information. Rule 303 also requires ATSs to preserve any notices provided to subscribers, including, but not limited to, notices regarding the ATSs operations and subscriber access. For an ATS subject to the fair access requirements described in Rule 301(b)(5)(ii) of Regulation ATS, Rule 303 further requires the ATS to preserve at least one copy of its standards for access to trading, all documents relevant to the ATS's decision to grant, deny, or limit access to any person, and all other documents made or received by the ATS in the course of complying with Rule 301(b)(5) of Regulation ATS. For an ATS subject to the capacity, integrity, and security requirements for automated systems under Rule 301(b)(6) of Regulation ATS, Rule 303 requires an ATS to preserve all documents made or received by the ATS related to its compliance, including all correspondence, memoranda, papers, books, notices, accounts, reports, test scripts, test results, and other similar records. As provided in Rule 303(a)(1), ATSs are required to keep all of these records, as applicable, for a period of at least three years, the first two in an easily accessible place. In addition, Rule 303 requires ATSs to preserve records of partnership articles, articles of incorporation or charter, minute books, stock certificate books, copies of reports filed pursuant to Rule 301(b)(2), and records made pursuant to Rule 301(b)(5) for the life of the ATS.
The information contained in the records required to be preserved by Rule 303 will be used by examiners and other representatives of the Commission, state securities regulatory authorities, and the self-regulatory organizations to ensure that ATSs are in compliance with Regulation ATS as well as other applicable rules and regulations. Without the data required by the Rule, regulators would be limited in their ability to comply with their statutory obligations, provide for the protection of investors, and promote the maintenance of fair and orderly markets.
Respondents consist of ATSs that choose to register as broker-dealers and comply with the requirements of Regulation ATS. There are currently 84 respondents. To comply with the record preservation requirements of Rule 303, these respondents will spend approximately 1,260 hours per year (84 respondents at 15 burden hours/respondent).
Written comments are invited on (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number.
Please direct your written comments to: Pamela Dyson, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street NE., Washington, DC 20549, or send an email to:
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to require that an issuer of securities listed under the Rule 5700 Series notify Nasdaq about the replacement of the index, portfolio, or reference asset underlying the security and pay a fee in connection with the change.
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
Nasdaq rules require issuers to notify Nasdaq about substitution listing events and impose fees associated with those notifications. Specifically, Rule 5005(a)(40) defines a “Substitution Listing Event” as certain changes in the equity or legal structure of a company
Nasdaq proposes to expand the definition of a Substitution Listing Event to include cases where an issuer of securities listed under the Rule 5700 Series replaces, or significantly modifies, the index, portfolio, or reference asset underlying its security (including, but not limited to, a significant modification to the index methodology, a change in the index provider, or a change in control of the index provider). This type of change requires that Nasdaq review the changes to the index, portfolio, or reference asset for compliance with the applicable listing requirements and may require Nasdaq to make a rule filing with the Commission to continue listing the product with the revised index, portfolio, or reference asset.
Nasdaq believes it is appropriate to require notification of these changes in the same manner as other Substitution Listing Events,
Nasdaq also proposes to modify Rule 5701 to highlight that a change to the index, portfolio, or reference asset underlying a security is a Substitution Listing Event that requires 15 calendar days' notice. The new language also emphasizes that such a change may affect the company's compliance with the listing requirements and may require Nasdaq to file a new rule filing pursuant to Section 19(b)(1) of the Act
Nasdaq also believes that it is appropriate in these instances to charge the $5,000 fee assessed for Substitution Listing Events,
Finally, Nasdaq proposes to remove transitional language within Rule 5005(a)(40), which excluded a business combination that was publicly announced prior to October 15, 2013,
Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
Nasdaq believes that the proposed requirement that the issuer of securities listed under the Rule 5700 Series notify Nasdaq 15 calendar days in advance of changes to the index, portfolio, or reference asset underlying the security is consistent with the investor protection objectives of Section 6(b)(5) of the Act in that it is designed to promote just and equitable principles of trade, to remove impediments to a free and open market and national market system, and in general to protect investors and the public interest.
Specifically, the proposed change will help ensure that Nasdaq has sufficient time to review the revised index, portfolio, or reference asset and determine whether the product complies with Nasdaq's listing requirements and whether a rule filing must be filed by Nasdaq pursuant to Section 19(b)(1) of the Act and approved by the Commission or otherwise take effect (as applicable), which will help protect investors.
Moreover, by including this category of changes in the definition of a Substitution Listing Event, Nasdaq will charge a $5,000 fee in connection with the changes, which will help ensure that adequate resources are available for Nasdaq to conduct this review. In addition, the proposed change will clarify that Nasdaq will halt a security if the issuer implements a change that requires a rule filing before that rule filing is approved or effective (as applicable), and delist the security if Nasdaq determines not to file or withdraws the rule filing, or the SEC disapproves the rule filing, thereby protecting investors.
Including changes to the index, portfolio, or reference asset underlying a security in the list of Substitution Listing Events subject to a $5,000 fee is reasonable and equitably allocated in that it is designed to compensate Nasdaq for the work required in connection with effecting changes that the issuer has initiated. As noted above, changes made to a security's underlying index, portfolio or reference assets require Nasdaq to review the issuer's listing compliance and may require Nasdaq to submit a rule filing to the Commission. It is reasonable and equitable to allocate the costs of these actions to the issuer that implements the change or event, just as Nasdaq does in connection with other Substitution Listing Events.
The proposed change to eliminate transitional language from Rule 5005(a)(40) will simplify Nasdaq's rules, thereby removing a potential impediment to a free and open market and national market system.
Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. This rule proposal is not primarily based on competition, but rather is designed to ensure that Nasdaq staff has adequate time and resources to review a change to an index, portfolio, or reference asset for compliance with the listing requirements and to file and obtain approval or effectiveness of a rule change, if necessary. As such, Nasdaq believes the proposed change will have no impact on competition.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. The Exchange states that the proposal will help ensure that the Exchange has sufficient time to review a revised index, portfolio, or reference asset underlying a security listed under the Rule 5700 Series to determine whether the product complies with the Exchange's listing requirements and
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The purpose of this proposed rule change is to amend the Exchange's Schedule of Fees to explain that while 100% of eligible traded volume preferenced to a Market Maker counts towards that member's volume tiers, Market Makers not preferenced on an order will receive credit for the volume those non-preferenced members execute. The text of the proposed rule change is available on the Exchange's Web site (
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements.
On March 10, 2016, ISE Mercury introduced fee and rebate tiers for Market Maker
On March 10, 2016, the Exchange adopted ADV tiers that are based on preferenced volume
The Exchange believes that the proposed rule change is consistent with the requirements of the Act, and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.
In accordance with Section 6(b)(8) of the Act,
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties.
Because the proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Securities and Exchange Commission (“Commission”).
Notice of an application for an order under sections 57(a)(4) and 57(i) of the Investment Company Act of 1940 (the “Act”) and rule 17d-1 under the Act permitting certain joint transactions otherwise prohibited by section 57(a)(4) of the Act and rule 17d-1 under the Act.
Terra Capital Partners, LLC (the “Sponsor”), Terra Income Fund 6, Inc. (the “Company”), Terra Income Advisors, LLC (the “Advisor”), on behalf of itself and its successors,
The application was filed on April 25, 2016.
An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on May 17, 2016, and should be accompanied by proof of service on the applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0-5 under the Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. Applicants, Bruce D. Batkin, Terra Income Fund 6, Inc., c/o Terra Capital Partners, LLC, 805 Third Avenue, 8th Floor, New York, New York 10022.
Kieran G. Brown, Senior Counsel, at (202) 551-6773, or James M. Curtis, Branch Chief, at (202) 551-6712 (Chief Counsel's Office, Division of Investment Management).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or for an applicant using the Company name box, at
1. The Sponsor is a Delaware limited liability company and served as the organizer and sponsor of the Company. The Sponsor is also the parent company of the Advisor and the Dealer Manager. Since its formation in February 2001, the Sponsor has organized or acted as investment manager for multiple private real estate investment funds (“REITs”).
2. The Company, a Maryland corporation, is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the Act.
3. The Advisor is a Delaware limited liability company that is registered as an investment adviser under the Investment Advisers Act of 1940. The Advisor serves as the investment adviser to the Company.
4. The Dealer Manager is a Delaware limited liability company that serves as the dealer manager of the Company pursuant to a dealer manager agreement dated April 20, 2015 by and among the Company, the Advisor and the Dealer Manager (the “Dealer Manager Agreement”). The Dealer Manager is duly registered as a broker-dealer pursuant to the provisions of the 1934 Act, a member in good standing with the Financial Industry Regulatory Authority, Inc. (“FINRA”), and a broker dealer duly registered as such in those states where the Dealer Manager is required to be registered in order to carry out the Offering.
5. Currently, the Common Shares are sold at a public offering price of $12.50
6. The Board, including the Non-Interested Directors, has determined that it is in the best interests of the Common Shareholders to amend the Dealer Manager Agreement (the “Dealer Manager Agreement Amendment”) solely to change the Underwriting Compensation terms to reduce the Upfront Sales Load and implement an asset-based, ongoing distribution fee (a “Distribution Fee”). The proposed change would reduce the selling commissions and dealer manager fees from 6.0% and 3.0% to 3.0% and 1.5%, respectively, of gross offering proceeds or an aggregate reduction in Upfront Sales Load of 4.5%. The proposed change also implements the Distribution Fee of 1.125% of gross offering proceeds, payable annually for four years, or 4.5%. The maximum Distribution Fee of 4.5% is therefore equal to the reduction in the Upfront Sales Load. All Common Shares will continue to have an offering price of $12.50 per Common Share after the proposed change.
7. To ensure that, following the change in Underwriting Compensation, the net proceeds to the Company from the sale of all Common Shares will be equivalent, the Dealer Manager proposes to reimburse to the Company an amount equal to the Distribution Fee to be paid with respect to the Common Shares outstanding, or 4.5% of the gross proceeds from the Offering, before the implementation of the proposed Dealer Manager Agreement Amendment (the “Distribution Fee Reimbursement”). Once this amount is returned to the Company, (1) all Common Shares will become subject to the same 5.5% Upfront Sales Load; (2) all holders of Common Shares will become subject to the same aggregate Distribution Fee of 4.5%; (3) the net proceeds to the Company from the sale of all Common Shares (whether issued before or after the implementation of the Dealer Manager Agreement Amendment) will be the same, $11.25 per Common Share; and (4) all Common Shares will be subject to the same 10% in Underwriting Compensation, consistent with the limitations imposed by Conduct Rule 2310 of FINRA (“Conduct Rule 2310”).
8. Applicants believe that, if the Dealer Manager Agreement Amendment is entered into, a greater amount of the existing and future Common Shareholders' capital will be available for investment at an earlier stage in the Company's investment cycle. This would permit the Company and all Common Shareholders to benefit from the income generated from such investments while the Distribution Fee Payment is deferred, enable the Company to achieve its investment objectives and acquire a diversified portfolio, and lead to greater demand for the Company's Common Shares, which would further benefit the Common Shareholders because of the lower operating expense ratio and Company portfolio diversification resulting from such increased sales of Common Shares.
9. The Company believes that the Dealer Manager Agreement Amendment will enable the Common Shares to remain competitive with similar investments sold by broker-dealers. Because the per share estimated value of Common Shares that appears on customer account statements for Common Shares with a low Upfront Sales Load combined with a Distribution Fee is greater than the per share estimated value of Common Shares with a high Upfront Sales Load and no Distribution Fee, the Company believes that broker-dealers generally would prefer selling Common Shares with a with a low Upfront Sales Load and a Distribution Fee.
10. The Board, including the Non-Interested Directors, after reviewing and evaluating the proposed transactions and the Dealer Manager Agreement Amendment, determined that: (i) The Dealer Manager Agreement Amendment is in the best interests of the Company and its Common Shareholders; (ii) the services to be rendered by the Dealer Manager are required for the operation of the Company; (iii) the Dealer Manager can provide the services such that the nature and quality of the services are at least equal to those provided by others; and (iv) the fees charged are fair and reasonable in light of the usual and customary charges made by others for services of the same nature and quality.
11. The Company has filed a Post-Effective Amendment to its registration statement disclosing the changes to the Underwriting Compensation terms and will seek a declaration of effectiveness of such Post-Effective Amendment by the Commission prior to commencing sales of the Common Shares subject to the revised Underwriting Compensation as implemented by the Dealer Manager Agreement Amendment. All current Common Shares outstanding immediately prior to the implementation of the Dealer Manager Agreement Amendment and Common Shares to be issued upon effectiveness of the Post-Effective Amendment (exclusive of Common Shares to be issued pursuant to the Company's distribution reinvestment plan, as further described in the Prospectus) will be subject to the same Distribution Fee.
1. Section 57(a) of the Act prohibits certain transactions between a BDC and persons related to the BDC absent an order from the Commission. Specifically, section 57(a)(4) makes it unlawful for any person who is related to a BDC in a manner described in section 57(b), acting as principal, knowingly to effect any transaction in which the BDC or a company controlled by such BDC is a joint or a joint and several participant with that person in contravention of rules and regulations as the Commission may prescribe for the purpose of limiting or preventing participation by the BDC or controlled company on a basis less advantageous than that of the other participant. Section 57(b) specifies the persons to whom the prohibitions of section 57(a)(4) apply. Under section 57(b)(2), these persons include any investment adviser or promoter of, general partner in, principal underwriter for, or person directly or indirectly either controlling, controlled by, or under common control with a BDC (except the BDC itself and
2. Rule 17d-1 under the Act generally prohibits participation by a registered investment company and an affiliated person (as defined in section 2(a)(3) of the Act) or principal underwriter for that investment company, or an affiliated person of such affiliated person or principal underwriter, in any “joint enterprise or other joint arrangement or profit-sharing plan,” as defined in the rule, without prior approval by the Commission by order upon application. Although the Commission has not adopted any rules expressly under section 57(a)(4), section 57(i) provides that the rules (but not section 17(d) itself) under section 17(d) applicable to registered closed-end investment companies (
3. As the investment adviser and principal underwriter to the Company, the Advisor and the Dealer Manager, respectively, are subject to the prohibitions of section 57(a)(4) as a result of section 57(b)(2) of the Act. Moreover, the Sponsor may be deemed to control both the Advisor and the Dealer Manager and the Advisor may be deemed to control the Company within the meaning of section 2(a)(9) of the Act.
4. In passing upon applications under rule 17d-1, the Commission considers whether the company's participation in the joint transaction is consistent with the provisions, policies, and purposes of the Act and the extent to which such participation is on a basis different from or less advantageous than that of other participants.
5. Applicants believe that the representations and conditions set forth in the application will ensure that the Proposed Transactions are consistent with the protection of the Company's Shareholders, including the Current Common Shareholders (as herein defined), and with the purposes intended by the policies and provisions of the Act. Applicants state that the Company's participation in the Proposed Transactions will be consistent with the provisions, policies, and purposes of the Act and on a basis that is not different from or less advantageous than that of other participants.
Applicants agree that any order granting the requested relief will be subject to the following conditions:
1. The Company will ensure that total Underwriting Compensation payable in the Offering will not exceed 10% of the gross proceeds of the Offering, consistent with Conduct Rule 2310.
2. For the period of time in which the Distribution Fee is payable, the Dealer Manager will waive any annual Distribution Fee payment to which it is otherwise entitled in an amount sufficient to ensure that the total return experienced by the holders of the Company's Common Shares immediately prior to the implementation of the Dealer Manager Agreement Amendment (the “Current Common Shareholders”) is not less than the total return the Current Common Shareholders would have experienced if the Proposed Transactions had not occurred and the Dealer Manager Agreement had not been amended.
For the Commission, by the Division of Investment Management, under delegated authority.
It appears to the Securities and Exchange Commission that the public interest and the protection of investors require a suspension of trading in the securities of Pineapple Express, Inc. (CIK No. 1654672) because of recent, unusual and unexplained market activity in the company's stock that raises concerns about the adequacy of publicly-available information regarding the company. Pineapple Express, Inc. is a Wyoming corporation with its principal place of business listed as Los Angeles, California, with stock quoted on OTC Link (previously “Pink Sheets”) operated by OTC Markets Group, Inc. under the ticker symbol PNPL.
The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed company.
By the Commission.
On February 23, 2016, The NASDAQ Stock Market LLC (“Exchange” or “Nasdaq”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”
The Exchange proposes to list and trade the Shares of the Fund under Nasdaq Rule 5735, which governs the listing and trading of Managed Fund Shares on the Exchange. The Fund will be an actively managed exchange-traded fund (“ETF”). The Shares will be offered by the Trust,
Virtus ETF Advisers LLC will be the investment adviser (“Adviser”) to the Fund. iSectors, LLC will be the investment sub-adviser (“Sub-Adviser”) to the Fund. ETF Distributors LLC will be the principal underwriter and distributor of the Fund's Shares. The Bank of New York Mellon will act as the administrator, accounting agent, custodian, and transfer agent to the Fund. The Exchange states that, while the Adviser and Sub-Adviser are not registered as broker-dealers,
The Exchange has made the following representations and statements in describing the Fund and its investment strategy, including the Fund's portfolio holdings and investment restrictions.
The Fund's investment objective will be to provide growth of capital, with a secondary emphasis on capital preservation, independent of individual market conditions. The Fund will seek to achieve its investment objective by utilizing a long-only, tactically-managed exposure to sectors of the U.S. equity market and U.S. fixed income markets. To obtain this exposure, the Sub-Adviser will invest, under normal market conditions,
In order to seek its investment objective, the Fund will not employ other strategies outside of the above-described “Principal Investments.”
According to the Exchange, under normal market conditions, the Fund anticipates investing its total assets in shares of ETPs, individually selected U.S. exchange-traded common stocks, money market funds, U.S. treasuries, or money market instruments.
The Fund may hold up to an aggregate amount of 15% of its net assets in illiquid securities and other illiquid assets (calculated at the time of investment). The Fund will monitor its portfolio liquidity on an ongoing basis to determine whether, in light of current circumstances, an adequate level of liquidity is being maintained, and will consider taking appropriate steps in order to maintain adequate liquidity if, through a change in values, net assets, or other circumstances, more than 15% of the Fund's net assets are held in illiquid securities or other illiquid assets. Illiquid securities and other illiquid assets include securities subject to contractual or other restrictions on resale and other instruments that lack readily available markets as determined in accordance with Commission staff guidance.
The Exchange states that the Fund intends to qualify for and to elect to be treated as a separate regulated investment company under Subchapter M of the Internal Revenue Code. In addition, under the 1940 Act, the Fund's investment in investment companies will be limited to, subject to certain exceptions: (i) 3% Of the total outstanding voting stock of any one investment company; (ii) 5% of the Fund's total assets with respect to any one investment company; and (iii) 10% of the Fund's total assets with respect to investment companies in the aggregate.
The Fund's investments will be consistent with its investment objective. The Fund does not presently intend to engage in any form of borrowing for investment purposes, and it will not be operated as a “leveraged ETF,”
After careful review, the Commission finds that the Exchange's proposal is consistent with the Exchange Act and the rules and regulations thereunder applicable to a national securities exchange.
The Commission also finds that the proposal is consistent with Section 11A(a)(1)(C)(iii) of the Exchange Act,
The Commission also believes that the proposal to list and trade the Shares is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares appropriately and to prevent trading when a reasonable degree of transparency cannot be assured. The Exchange states that it will obtain a representation from the issuer of the Shares that the NAV per Share will be calculated daily and that the NAV and the Disclosed Portfolio will be made available to all market participants at the same time.
Nasdaq deems the Shares to be equity securities, thus rendering trading in the Shares subject to Nasdaq's existing rules governing the trading of equity securities. In support of this proposal, the Exchange has represented that:
(1) The Shares will be subject to Nasdaq Rule 5735, which sets forth the initial and continued listing criteria applicable to Managed Fund Shares.
(2) Nasdaq's surveillance procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to detect and help deter violations of Exchange rules and applicable federal securities laws.
(3) FINRA, on behalf of the Exchange, will communicate as needed regarding trading in the Shares and other exchange-traded securities and instruments, including the common stock and shares held by the Fund with other markets and other entities that are members of the ISG,
(4) The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions.
(5) Prior to commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks associated with trading the Shares. Specifically, the Information Circular will discuss the following: (a) The procedures for purchases and redemptions of Shares in Creation Units (and that Shares are not individually redeemable); (b) Nasdaq Rule 2111A, which imposes suitability obligations on Nasdaq members with respect to recommending transactions in the Shares to customers; (c) how information regarding the Intraday Indicative Value and Disclosed Portfolio is disseminated; (d) the risks involved in trading the Shares during the Pre-Market and Post-Market Sessions when an updated Intraday Indicative Value will not be calculated or publicly disseminated; (e) the requirement that members deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (f) trading information.
(6) For initial and continued listing, the Fund must be in compliance with Rule 10A-3 under the Act.
(7) The Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets.
(8) The Fund may invest in leveraged ETPs (
(9) The Fund will not use derivative instruments, including options, swaps, forwards, and futures contracts.
(10) A minimum of 100,000 Shares will be outstanding at the commencement of trading on the exchange.
The Exchange represents that all statements and representations made in the filing regarding (a) the description of the portfolio, (b) limitations on portfolio holdings or reference assets, or (c) the applicability of Exchange rules and surveillance procedures shall constitute continued listing requirements for listing the Shares on the Exchange. In addition, the issuer has represented to the Exchange that it will advise the Exchange of any failure by the Fund to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will monitor for compliance with the continued listing requirements.
This approval order is based on all of the Exchange's representations, including those set forth above, in the Notice, and in Amendment No. 1 to the proposed rule change. The Commission notes that the Fund and the Shares must comply with the requirements of Nasdaq Rule 5735, including those set forth in this proposed rule change, as modified by Amendment No. 1 thereto, to be listed and traded on the Exchange on an initial and continuing basis.
For the foregoing reasons, the Commission finds that the proposed rule change, as modified by Amendment No. 1 thereto, is consistent with Section 6(b)(5) of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Nasdaq proposes to list and trade the common shares of beneficial interest of the PowerShares Variable Rate Investment Grade Portfolio (the “Fund”), a series of the PowerShares Actively Managed Exchange-Traded Fund Trust (the “Trust”), under Nasdaq Rule 5735 (“Rule 5735”). The common shares of beneficial interest of the Fund are referred to herein as the “Shares.”
The text of the proposed rule change is available at
In its filing with the Commission, Nasdaq included statements concerning the purpose of, and basis for, the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to list and trade the Shares of the Fund under Rule 5735, which rule governs the listing and trading of Managed Fund Shares
Invesco PowerShares Capital Management LLC will serve as the investment adviser (the “Adviser”) to the Fund. Invesco Advisers, Inc. will serve as the sub-adviser to the Fund (“Sub-Adviser”). Invesco Distributors, Inc. (the “Distributor”) will serve as the principal underwriter and distributor of the Fund's Shares. The Bank of New York Mellon will act as the administrator, accounting agent, custodian (the “Custodian”) and transfer agent for the Fund.
Paragraph (g) of Rule 5735 provides that, if the investment adviser to an investment company issuing Managed Fund Shares is affiliated with a broker-dealer, such investment adviser shall erect a “fire wall” between the investment adviser and the broker-dealer with respect to access to information concerning the composition and/or changes to such investment company's portfolio.
Rule 5735(g) is similar to Nasdaq Rule 5705(b)(5)(A)(i), which applies to index-based funds and requires “fire-walls” between affiliated broker-dealers and investment advisers regarding the index-based fund's underlying benchmark index. Rule 5735(g), however, applies to the establishment of a “fire wall” between affiliated investment advisers and the broker-dealers with respect to the investment company's portfolio and not with respect to an underlying benchmark index, as is the case with index-based funds. The Adviser and the Sub-Adviser are not broker-dealers, but they are affiliated with the Distributor, a broker-dealer. The Adviser and the Sub-Adviser have therefore implemented, and will maintain, a fire wall between themselves and the Distributor with respect to access to information concerning the composition and/or changes to the Fund's portfolio. In the event (a) the Adviser or Sub-Adviser becomes newly affiliated with a different broker-dealer (or becomes a registered broker-dealer), or (b) any new adviser or sub-adviser to the Fund is a registered broker-dealer or becomes affiliated with a broker-dealer, each will implement and maintain a fire wall with respect to its relevant personnel and/or such broker-dealer affiliate, if applicable, regarding access to information concerning the composition and/or changes to the Fund's portfolio and will be subject to procedures designed to prevent the use and dissemination of material non-public information regarding such portfolio.
The Fund will be an actively managed ETF, and its investment objectives are to seek to generate current income while maintaining low portfolio duration as a primary objective and capital appreciation as a secondary objective.
The Fund will seek to achieve its investment objectives by investing, under normal market conditions,
At least 80% of the Fund's net assets will be invested in Variable Rate Debt Instruments or variable rate preferred stock that are, at the time of purchase, investment grade, or in ETFs that invest primarily in any or all of the foregoing securities. Under normal market conditions, Variable Rate Debt Instruments or variable rate preferred stock will be investment grade if, at the time of purchase they have a rating in one of the highest four rating categories of at least one nationally recognized statistical ratings organization (“NRSRO”) (
Under normal market conditions, the Fund will satisfy the following requirements on a continuous basis measured at the time of purchase: (i) At least 75% of the investments in the portfolio will be in Variable Rate Debt Instruments, with a minimum original principal amount outstanding of $100 million or more, variable rate preferred stock, or in ETFs that invest primarily in any or all of the foregoing securities;
In selecting Variable Rate Investments, for the Fund,
Under normal market conditions, the Fund will have investment exposure to a wide variety of Variable Rate Investments. During periods of market volatility, however, the Fund may allocate a significant portion of its net assets to floating rate U.S. Treasury debt securities and agency MBS. The Adviser expects that the Fund's portfolio will have average duration
According to the Registration Statement, under normal market conditions, the Fund will invest primarily in the Variable Rate Investments described above to meet its investment objectives. In addition, the Fund may invest up to 20% of its net assets in Variable Rate Debt Instruments or variable rate preferred stock that are rated below investment grade, and in fixed-rate debt instruments that are rated either investment grade or below investment grade. The Fund may invest in the following fixed-rate debt instruments: (i) Fixed-rate MBS and ABS (which includes fixed-rate commercial real estate CLOs); (ii) fixed-rate U.S. government and agency securities; (iii) fixed-rate corporate debt securities, which will be comprised of corporate notes, bonds, debentures, or loans, and may include 144A corporate securities;
The Fund may also take a temporary defensive position and hold a portion of its assets in cash and cash equivalents and money market instruments
The Fund may not concentrate its investments (
The Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment), including Rule 144A corporate debt securities deemed illiquid by the Adviser.
The Fund intends to qualify for and to elect to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code.
The Fund's investments will be consistent with the Fund's investment objectives. Additionally, the Fund may engage in frequent and active trading of portfolio securities to achieve its investment objective. The Fund does not presently intend to engage in any form of borrowing for investment purposes, and will not be operated as a “leveraged ETF,”
The Fund's administrator will calculate the Fund's net asset value (“NAV”) per Share as of the close of regular trading (normally 4:00 p.m., Eastern time (“E.T.”)) on each day the New York Stock Exchange (“NYSE”) is open for business (a “Business Day”). NAV per Share will be calculated for the Fund by taking the value of the Fund's total assets, including interest or dividends accrued but not yet collected, less all liabilities, and dividing such amount by the total number of Shares outstanding. The result, rounded to the nearest cent, will be the NAV per Share (although creations and redemptions will be processed using a price denominated to the fifth decimal point, meaning that rounding to the nearest cent may result in different prices in certain circumstances).
A market valuation generally means a valuation (i) obtained from an exchange, an independent pricing service (“Pricing Service”), or a major market maker (or dealer) or (ii) based on a price quotation or other equivalent indication of value supplied by an exchange, a Pricing Service, or a major market maker (or dealer).
Securities listed or traded on an exchange generally are valued at the last sales price or official closing price that day as of the close of the exchange where the security is primarily traded. However, certain securities, including some Variable Rate Debt Instruments (and Fixed Rate Debt Instruments, to the extent applicable), in which the Fund may invest will not be listed on any securities exchange or board of trade. Such securities will typically be bought and sold by institutional investors in individually negotiated private transactions that function in many respects like an over-the-counter secondary market, although typically no formal market makers will exist. Certain securities, particularly debt securities, will have few or no trades, or trade infrequently, and information regarding a specific security may not be widely available or may be incomplete. Accordingly, determinations of the fair value of debt securities may be based on infrequent and dated information. Because there is less reliable, objective data available, elements of judgment may play a greater role in valuation of debt securities than for other types of securities.
Typically, Variable Rate Debt Instruments, Fixed Rate Debt Instruments and other debt securities in which the Fund may invest (other than those specifically described below) will be valued using information provided by a Pricing Service. Debt securities having a remaining maturity of 60 days or less when purchased will be valued at cost adjusted for amortization of premiums and accretion of discounts, provided the Adviser has determined that the use of amortized cost is an appropriate reflection of fair value given market and issuer-specific conditions existing at the time of the determination.
ABS and MBS will generally be valued by using a Pricing Service. If a Pricing Service does not cover a particular asset-backed or mortgage-backed security, or discontinues covering a particular asset-backed or mortgage-backed security, the security will be priced using broker quotes generally provided by brokers that make or participate in markets in the security. To derive values, Pricing Services and broker-dealers may use matrix pricing and valuation models, as well as recent market transactions for the same or similar assets. As it deems appropriate, the Adviser may determine that a Pricing Service price does not represent an accurate value of an ABS or MBS, based on broker quotes it receives, a recent trade in the security by the Fund, information from a portfolio manager, or other market information. In the event that the Adviser determines that the Pricing Service price is unreliable or inaccurate based on such other information, broker quotes may be used. Additionally, if the Adviser determines that the price of an asset-backed or mortgage-backed security obtained from a Pricing Service and available broker quotes is unreliable or inaccurate due to market conditions or other reasons, or if a Pricing Service price or broker quote is unavailable, the security will be valued using fair value pricing, as described below.
Shares of open-end registered investment companies (
Certain securities, including certain Variable Rate Debt Instruments and Fixed Rate Debt Instruments, in which the Fund will invest will not be able to be priced by pre-established pricing methods. Such securities may be valued by the Trust's Board or its delegate at fair value. The use of fair value pricing by the Fund will be governed by the valuation policies and procedures and conducted in accordance with the provisions of the 1940 Act. Valuing the Fund's securities using fair value pricing will result in using prices for those securities that may differ from current market valuations or official closing prices on the applicable exchange. All valuations will be subject to review by the Board of Trustees of the Trust (“Board”) or its delegate.
In determining NAV, expenses will be accrued and applied daily and securities and other assets for which market quotations are readily available will be valued at market value. The NAV for the Fund will be calculated and disseminated daily. If a security's market price is not readily available, the security will be valued using pricing provided from independent pricing services or by another method that the Adviser, in its judgment, believes will
The Trust will issue Shares of the Fund at NAV only with authorized participants (“APs”) and only in aggregations of 50,000 shares (each aggregation is called a “Creation Unit”) or multiples thereof, on a continuous basis through the Distributor, without a sales load, at the NAV next determined after receipt, on any Business Day, of an order in proper form.
The consideration an AP must provide for purchase of Creation Units of the Fund may consist of (i) cash in lieu of all or a portion of the Deposit Securities, as defined below, in an amount calculated based on the NAV per Share, multiplied by the number of Shares representing a Creation Unit (“Deposit Cash”), plus certain transaction fees; or (ii) an “in-kind” deposit of a designated portfolio of securities determined by the Adviser that generally will conform to the holdings of the Fund consistent with its investment objective (the “Deposit Securities”) per each Creation Unit and generally an amount of cash (the “Cash Component”) computed as described below. Together, the Deposit Securities and the Cash Component (including the cash in lieu amount) will constitute the “Fund Deposit,” which will represent the minimum initial and subsequent investment amount for a Creation Unit of the Fund.
The Cash Component is sometimes also referred to as the Balancing Amount. The Cash Component will serve the function of compensating for any differences between the NAV per Creation Unit and the Deposit Amount (as defined below). For example, for a creation the Cash Component will be an amount equal to the difference between the NAV of Fund Shares (per Creation Unit) and the “Deposit Amount”—an amount equal to the market value of the Deposit Securities and/or cash in lieu of all or a portion of the Deposit Securities. If the Cash Component is a positive number (
Creation Units of the Fund generally will be sold partially in cash and partially in-kind plus a fixed and/or variable transaction fee.
To the extent that the Fund permits Creation Units to be issued principally or partially in-kind, the Custodian, through the National Securities Clearing Corporation (“NSCC”), will make available on each Business Day, prior to the opening of business of the NYSE (currently, 9:30 a.m., E.T.), the list of the names and the quantity of each Deposit Security to be included in the current Fund Deposit (based on information at the end of the previous Business Day), plus any estimated Cash Component, for the Fund. Such Fund Deposit will be applicable, subject to any adjustments as described below, to effect creations of Creation Units of the Fund until such time as the next-announced composition of the Deposit Securities is made available. Information on the specific names and holdings in a Fund Deposit also will be available at
To the extent that the Fund permits Creation Units to be redeemed in-kind, the Custodian, through the NSCC, will make available on each Business Day, prior to the opening of business of NYSE (currently, 9:30 a.m., E.T.), the identity of the Fund Securities that will be applicable (subject to possible amendment or correction) to redemption requests received in proper form on that day. Fund Securities received on redemption may not be identical to Deposit Securities that are applicable to creations of Creation Units.
When applicable, during times that the Fund permits in-kind creations, the identity and quantity of the Deposit Securities required for a Fund Deposit for the Shares may change as rebalancing adjustments and corporate action events occur and are reflected within the Fund from time to time by the Adviser, consistent with the investment objective of the Fund.
To be eligible to place orders with respect to creations and redemptions of Creation Units, an entity must be (i) a “Participating Party,”
All orders to create Creation Units must be received by the transfer agent no later than the closing time of the regular trading session on the NYSE (ordinarily, 4:00 p.m., E.T.) in each case on the date such order is placed in order for creations of Creation Units to be effected based on the NAV of Shares of the Fund as next determined on such date after receipt of the order in proper form.
In order to redeem Creation Units of the Fund, an AP must submit an order to redeem for one or more Creation Units. All such orders must be received by the Fund's transfer agent in proper form no later than the close of regular trading on the NYSE (ordinarily, 4:00 p.m. E.T.) in order to receive that day's closing NAV per Share.
The Fund's Web site (
In addition, to the extent the Fund permits full or partial creations in-kind, a basket composition file, which will include the security names and share quantities to deliver (along with requisite cash in lieu) in exchange for Shares, together with estimates and actual Cash Components, will be publicly disseminated daily prior to the opening of the Exchange via the NSCC and at
In addition, for the Fund, an estimated value, defined in Rule 5735(c)(3) as the “Intraday Indicative Value,” that reflects an estimated intraday value of the Fund's portfolio, will be disseminated. Moreover, the Intraday Indicative Value, available on the NASDAQ OMX Information LLC proprietary index data service
The dissemination of the Intraday Indicative Value, together with the Disclosed Portfolio, will allow investors to determine the value of the underlying portfolio of the Fund on a daily basis and will provide a close estimate of that value throughout the trading day.
Intraday executable price quotations on exchange listed securities, certain Variable Rate Debt Instruments, Fixed Rate Debt Instruments and other assets not traded on an exchange will be available from major broker-dealer firms or market data vendors, as well as from automated quotation systems, published or other public sources, or online information services. Additionally, the Trade Reporting and Compliance Engine (“TRACE”) of the Financial Industry Regulatory Authority (“FINRA”) will be a source of price information for corporate bonds, privately-issued securities, MBS and ABS to the extent transactions in such securities are reported to TRACE.
Investors also will be able to obtain the Fund's Statement of Additional Information (“SAI”), the Fund's Shareholder Reports, and its Trust's Form N-CSR and Form N-SAR, each of which is filed twice a year, except the SAI, which is filed at least annually. The Fund's SAI and Shareholder Reports will be available free upon request from the Trust, and those documents and the Form N-CSR and Form N-SAR may be viewed on-screen or downloaded from the Commission's Web site at
Additional information regarding the Fund and the Shares, including investment strategies, risks, creation and redemption procedures, fees, portfolio holdings disclosure policies, distributions and taxes, will be included in the Registration Statement.
The Shares will conform to the initial and continued listing criteria applicable to Managed Fund Shares, as set forth under Rule 5735. The Exchange represents that, for initial and/or continued listing, the Fund will be in compliance with Rule 10A-3
With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares of the Fund. Nasdaq will halt trading in the Shares under the conditions specified in Nasdaq Rules 4120 and 4121, including the trading pauses under Nasdaq Rules 4120(a)(11) and (12). Trading also may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (1) The extent to which trading is not occurring in the securities and/or the financial instruments constituting the Disclosed Portfolio of the Fund; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. Trading in the Shares also will be subject to Rule 5735(d)(2)(D), which sets forth circumstances under which Shares of the Fund may be halted.
Nasdaq deems the Shares to be equity securities, thus rendering trading in the Shares subject to Nasdaq's existing rules governing the trading of equity securities. Nasdaq will allow trading in the Shares from 4:00 a.m. until 8:00 p.m. E.T. The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions. As provided in Nasdaq Rule 5735(b)(3), the minimum price variation for quoting and entry of orders in Managed Fund Shares traded on the Exchange is $0.01.
The Exchange represents that trading in the Shares will be subject to the existing trading surveillances, administered by both Nasdaq and FINRA, on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws.
The surveillances referred to above generally focus on detecting securities trading outside their normal patterns, which could be indicative of manipulative or other violative activity. When such situations are detected, surveillance analysis follows and investigations are opened, where appropriate, to review the behavior of all relevant parties for all relevant trading violations. FINRA, on behalf of the Exchange, will communicate as needed regarding trading in the Shares and other exchange-traded securities (including ETFs and preferred stock) and instruments held by the Fund with other markets and other entities that are members of the ISG,
In addition, the Exchange may obtain information regarding trading in the Shares and other exchange-traded securities (including ETFs and preferred stock) and instruments held by the Fund from markets and other entities that are members of ISG, which includes securities exchanges, or with which the Exchange has in place a comprehensive surveillance sharing agreement.
In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees.
Prior to the commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks associated with trading the Shares. Specifically, the Information Circular will discuss the following: (1) The procedures for purchases and redemptions of Shares in Creation Units (and that Shares are not individually redeemable); (2) Nasdaq Rule 2111A, which imposes suitability obligations on Nasdaq members with respect to recommending transactions in the Shares to customers; (3) how information regarding the Intraday Indicative Value and the Disclosed Portfolio is disseminated; (4) the risks involved in trading the Shares during the Pre-Market and Post-Market Sessions when an updated Intraday Indicative Value will not be calculated or publicly disseminated; (5) the requirement that members purchasing Shares from the Fund for resale to investors deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (6) trading information.
In addition, the Information Circular will advise members, prior to the commencement of trading, of the prospectus delivery requirements applicable to the Fund. Members purchasing Shares from the Fund for resale to investors will deliver a prospectus to such investors. The Information Circular will also discuss any exemptive, no-action and interpretive relief granted by the Commission from any rules under the Exchange Act.
Additionally, the Information Circular will reference that the Fund is subject to various fees and expenses. The Information Circular will also discuss any exemptive, no-action and interpretive relief granted by the Commission from any rules under the Exchange Act. The Information Circular will also disclose the trading hours of the Shares of the Fund and the applicable NAV calculation time for the Shares. The Information Circular will disclose that information about the Shares of the Fund will be publicly available on the Fund's Web site.
All statements and representations made in this filing regarding (a) the description of the portfolio, (b) limitations on portfolio holdings or reference assets, or (c) the applicability of Exchange rules and surveillance procedures shall constitute continued listing requirements for listing the Shares on the Exchange. In addition, the issuer has represented to the Exchange that it will advise the Exchange of any failure by the Fund to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will monitor for compliance with the continued listing requirements. If the Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under the Nasdaq 5800 Series.
Nasdaq believes that the proposal is consistent with Section 6(b) of the Exchange Act in general, and Section 6(b)(5)
The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that the Shares will be listed and traded on the Exchange pursuant to the initial and continued listing criteria in Nasdaq Rule 5735. The Exchange represents that trading in the Shares will be subject to the existing trading surveillances, administered by both Nasdaq and FINRA, on behalf of the Exchange, which are designed to deter and detect violations of Exchange rules and applicable federal securities laws and are adequate to properly monitor trading in the Shares in all trading sessions. The Adviser and the Sub-Adviser are affiliated with a broker-dealer and have implemented, and will maintain, a fire wall with respect to its broker-dealer affiliate regarding access to information concerning the composition and/or changes to the Fund's portfolio. In addition, paragraph (g) of Nasdaq Rule 5735 further requires that personnel who make decisions on an open-end fund's portfolio composition must be subject to procedures designed to prevent the use and dissemination of material, non-public information regarding the open-end fund's portfolio.
FINRA may obtain information via ISG from other exchanges that are members of ISG. In addition, the Exchange may obtain information regarding trading in the Shares and other exchange-traded securities (including ETFs and preferred stock) and instruments held by the Fund from markets and other entities that are members of ISG, which includes securities exchanges, or with which the Exchange has in place a comprehensive surveillance sharing agreement. The Fund will limit its investments in illiquid securities or other illiquid assets to an aggregate amount of 15% of its net assets (calculated at the time of investment). The Fund also may invest directly in ETFs. The ETFs in which the Fund will not invest include: (i) “leveraged ETFs” (
Additionally, the Fund may engage in frequent and active trading of portfolio securities to achieve its investment objective. The Fund does not presently intend to engage in any form of borrowing for investment purposes, and will not be operated as a “leveraged ETF,”
The proposed rule change is designed to promote just and equitable principles of trade and to protect investors and the public interest in that the Exchange will obtain a representation from the issuer of the Shares that the NAV per Share will be calculated daily every day that the Fund is traded, and that the NAV and the Disclosed Portfolio will be made available to all market participants at the same time. In addition, a large amount of information will be publicly available regarding the Fund and the Shares, thereby promoting market transparency. Moreover, the Intraday Indicative Value, available on the NASDAQ OMX Information LLC proprietary index data service, will be widely disseminated by one or more major market data vendors at least every 15 seconds during the Exchange's Regular Market Session. On each Business Day, before commencement of trading in Shares in the Regular Market Session on the Exchange, the Fund will disclose on its Web site the Disclosed Portfolio of the Fund that will form the basis for the Fund's calculation of NAV at the end of the Business Day. Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services, and quotation and last-sale information for the Shares will be available via Nasdaq proprietary quote and trade services, as well as in accordance with the Unlisted Trading Privileges and the Consolidated Tape Association plans for the Shares. Quotation and last sale information for any exchange-traded instruments (including preferred stocks and ETFs) also will be available via the quote and trade service of their respective primary exchanges, as well as in accordance with the Unlisted Trading Privileges and the Consolidated Tape Association plans. Intraday executable price quotations on exchange listed securities, certain Variable Rate Debt Instruments, Fixed Rate Debt Instruments and other assets not traded on an exchange will be available from major broker-dealer firms or market data vendors, as well as from automated quotation systems, published or other public sources, or online information services. Additionally, FINRA's TRACE will be a source of price information for corporate bonds, privately-issued securities, MBS and ABS to the extent transactions in such securities are reported to TRACE. For exchange-traded assets, intraday pricing information will be available directly from the applicable listing exchange.
The Fund's Web site will include a form of the prospectus for the Fund and additional data relating to NAV and other applicable quantitative information. Moreover, prior to the commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks associated with trading the Shares. Trading in Shares of the Fund will be halted under the conditions specified in Nasdaq Rules 4120 and 4121 or because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable, and trading in the Shares will be subject to Nasdaq Rule 5735(d)(2)(D), which sets forth circumstances under which Shares of the Fund may be halted. In addition, as noted above, investors will have ready access to information regarding the Fund's holdings, the Intraday Indicative Value, the Disclosed Portfolio, and quotation and last sale information for the Shares.
The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of an additional type of actively-managed exchange-traded product that will enhance competition among market participants, to the benefit of investors and the marketplace.
For the above reasons, Nasdaq believes the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Exchange Act.
The Exchange does not believe that the proposed rule change will impose
Written comments were neither solicited nor received.
Within 45 days of the date of publication of this notice in the
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (“PRA”) (44 U.S.C. 3501
Regulation ATS sets forth a regulatory regime for “alternative trading systems” (“ATSs”), which are entities that carry out exchange functions but which are not required to register as national securities exchanges under the Act. In lieu of exchange registration, an ATS can instead opt to register with the Commission as a broker-dealer and, as a condition to not having to register as an exchange, must instead comply with Regulation ATS. Rule 302 of Regulation ATS (17 CFR 242.302) describes the recordkeeping requirements for ATSs. Under Rule 302, ATSs are required to make a record of subscribers to the ATS, daily summaries of trading in the ATS, and time-sequenced records of order information in the ATS.
The information required to be collected under Rule 302 should increase the abilities of the Commission, state securities regulatory authorities, and the self-regulatory organizations to ensure that ATSs are in compliance with Regulation ATS as well as other applicable rules and regulations. If the information is not collected or collected less frequently, the regulators would be limited in their ability to comply with their statutory obligations, provide for the protection of investors, and promote the maintenance of fair and orderly markets.
Respondents consist of ATSs that choose to register as broker-dealers and comply with the requirements of Regulation ATS. There are currently 84 respondents. These respondents will spend approximately 3,780 hours per year (84 respondents at 45 burden hours/respondent) to comply with the recordkeeping requirements of Rule 302. At an average cost per burden hour of $65, the resultant total related internal cost of compliance for these respondents is $245,700 per year (3,780 burden hours multiplied by $65/hour).
Written comments are invited on (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
Please direct your written comments to: Pamela Dyson, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street NE., Washington, DC 20549, or send an email to:
On February 26, 2016, the Chicago Stock Exchange, Inc. (“CHX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The SNAP is designed to facilitate the bulk trading of a security within the Exchange's matching system (“Matching System”). The SNAP is a fully-hidden, on-demand auction for a security that, under the Exchange's current rules, may be initiated only by the Exchange's Participants
Under the Exchange's current rules, only a Participant may initiate the SNAP Cycle by submitting a valid limit order marked Start SNAP.
In the instant proposed rule change, the Exchange proposes to permit
There would be restrictions on when the Exchange may initiate a SNAP Cycle. Proposed Rule 1A(c) prohibits the Exchange from initiating a SNAP Cycle:
(1) Within five minutes of the first two-sided quote in the subject security having been received by the Exchange from the primary market disseminated after either the beginning of the regular trading session or a trading halt, pause or suspension that required the Exchange to suspend trading in the subject security;
(2) within five minutes of the end of the regular trading session;
(3) during a SNAP Cycle;
(4) within one minute after the completion of the previous SNAP Cycle;
(5) if the CHX Routing Services are not available at the time of the market snapshot taken pursuant to be proposed Rule 1A(b);
(6) if the NBBO ascertained from the market snapshot taken pursuant to proposed Rule 1A(b) is crossed or a two-sided NBBO does not exist.
After careful review and consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange.
When it approved the SNAP, the Commission stated that it believed that the SNAP: (1) Was reasonably designed to facilitate the auction trading of securities on CHX in a fair and orderly manner, and could improve market quality for market participants seeking to execute bulk trading interests and for other market participants submitting orders in response to that interest;
Further, the Commission believes that the proposed rule change would further minimize information leakage from SNAP Cycles in that market participants would not know which initiating mechanism triggered a particular SNAP Cycle.
For the above reasons, the Commission finds that the proposed rule change is consistent with the requirements of the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to update Exchange Rule 3304 and to amend the public disclosure of the sources of data that the Exchange utilizes when performing (1) order handling and execution; (2) order routing; and (3) related compliance processes.
The text of the proposed rule change is below. Proposed new language is italicized and deleted language is bracketed.
The PSX System utilizes the below proprietary and network processor feeds for the handling, routing, and execution of orders, as well as for the regulatory compliance processes related to those functions. The Secondary Source of data is, where applicable, utilized only in emergency market conditions and only until those emergency conditions are resolved.
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to update and amend the table in Exchange Rule 3304 that sets forth on a market-by-market basis the specific network processor and proprietary data feeds that the Exchange utilizes for the handling, routing, and execution of orders, and for performing the regulatory compliance checks related to each of those functions.
Specifically, the table will be amended to update the symbol for the Chicago Stock Exchange, Inc. from “CSX” to “CHX”, as well as to update the primary and secondary sources in the table for CHX. The primary source will be CHX Book Feed and the former primary source, CQS/UQDF, will become the secondary source. The change to the primary source reflects the Exchange's effort to increase the amount of data it gathers.
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
The Exchange believes that its proposal to amend the table in Exchange Rule 3304 to update the symbol for the Chicago Stock Exchange, Inc. and to amend the primary and secondary sources of data for CHX that the Exchange utilizes when performing (1) order handling and execution; (2) order routing; and (3) related compliance processes will ensure that Exchange Rule 3304 correctly identifies and publicly states on a market-by-market basis all of the specific network processor and proprietary data feeds that the Exchange utilizes for the handling, routing, and execution of orders, and for performing the regulatory compliance checks related to each of those functions. The Exchange also believes that the proposed rule change removes impediments to and perfects the mechanism of a free and open market and protects investors and the public interest because it provides additional specificity, clarity and transparency.
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. To the contrary, the Exchange believes the proposal will enhance competition because including all of the correct information for the exchanges enhances transparency and enables investors to better assess the quality of the Exchange's execution and routing services.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (“PRA”) (44 U.S.C. 3501
Rule 17Ad-10 generally requires registered transfer agents to: (1) Create and maintain current and accurate securityholder records; (2) promptly and accurately record all transfers, purchases, redemptions, and issuances, and notify their appropriate regulatory agency if they are unable to do so; (3) exercise diligent and continuous attention in resolving record inaccuracies; (4) disclose to the issuers for whom they perform transfer agent functions and to their appropriate regulatory agency information regarding record inaccuracies; (5) buy-in certain record inaccuracies that result in a physical over issuance of securities; and (6) communicate with other transfer agents related to the same issuer. These requirements assist in the creation and maintenance of accurate securityholder records, enhance the ability to research errors, and ensure the transfer agent is aware of the number of securities that are properly authorized by the issuer, thereby avoiding over issuance.
The rule also has specific recordkeeping requirements. It requires registered transfer agents to retain certificate detail that has been deleted for six years and keep current an accurate record of the number of shares or principal dollar amount of debt securities that the issuer has authorized to be outstanding. These mandatory requirements ensure accurate securityholder records and assist the Commission and other regulatory agencies with monitoring transfer agents and ensuring compliance with the rule. This rule does not involve the collection of confidential information.
There are approximately 413 registered transfer agents. We estimate that the average number of hours necessary for each transfer agent to comply with Rule 17Ad-10 is approximately 80 hours per year, which generates an industry-wide annual burden of 33,040 hours (413 times 80 hours). This burden is of a recordkeeping nature but also includes a small amount of third party disclosure and SEC reporting burdens. At an average staff cost of $50 per hour, the industry-wide internal labor cost of compliance (a monetization of the burden hours) is approximately $1,652,000 per year (33,040 × $50). In addition, we estimate that each transfer agent will incur an annual external cost burden of $18,000 resulting from the collection of information. Therefore, the total annual external cost on the entire transfer agent industry is approximately $7,434,000 ($18,000 times 413). This cost primarily reflects ongoing computer operations and maintenance associated with generating, maintaining, and disclosing or providing certain information required by the rule.
The amount of time any particular transfer agent will devote to Rule 17Ad-10 compliance will vary according to the size and scope of the transfer agent's business activity. We note, however, that at least some of the records, processes, and communications required by Rule 17Ad-10 would likely be maintained, generated, and used for transfer agent business purposes even without the rule.
Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number.
Please direct your written comments to: Pamela Dyson, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street NE., Washington, DC 20549, or send an email to:
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend its Fees Schedule. The text of the proposed rule change is available on the Exchange's Web site (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend its Fees Schedule.
The Exchange first proposes to amend its Volume Incentive Program (“VIP”). By way of background, under VIP, the Exchange credits each Trading Permit Holder (“TPH”) the per contract amount set forth in the VIP table resulting from each public customer (“C” origin code) order transmitted by that TPH (with certain exceptions) which is executed electronically on the Exchange, provided the TPH meets certain volume thresholds in a month.
The Exchange next proposes to amend its Affiliate Volume Plan (“AVP”). By way of background, under AVP if a TPH Affiliate
The Exchange believes the increased credit rate will incentivize increased volume while also maintaining an incremental incentive for TPH's [sic] to strive for the highest tier level.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the Exchange believes it's reasonable to increase the lower threshold in the third tier of VIP (and thus the corresponding upper threshold in the second tier) because the change is designed to adjust the incentive tiers accordingly as competition requires while maintaining an incremental incentive for TPH's [sic] to strive for the highest tier level to reach the highest credits available. This change is also equitable and not unfairly discriminatory because it will be applied to all TPHs uniformly. The Exchange believes the proposed change will incentivize the sending of more simple and complex orders to the Exchange. The greater liquidity and trading opportunities should benefit not just public customers (whose orders are the only ones that qualify for the VIP) but all market participants.
The Exchange believes that increasing the Tier 3 and Tier 4 Sliding Scale Credits from 15% to 20% and 20% to 30%, respectively, is reasonable because it is increasing available credits. Additionally, enhancing the incentives under the Sliding Scale Credit further incentivizes a Market-Maker Affiliate to achieve the highest tier on the VIP so that the Market-Maker can achieve those higher credits, which thereby can result in greater customer liquidity. The resulting increased volume benefits all market participants (including Market-Makers or their affiliates who do not achieve the higher tiers on the VIP; indeed, this increased volume may allow them to reach these tiers).
The Exchange believes that limiting the Sliding Scale Credit to Market-Makers is equitable and not unfairly discriminatory because Market-Makers are valuable market participants that provide liquidity in the marketplace and incur costs that other market participants do not incur. For example, Market-Makers have a number of obligations, including quoting obligations that other market participants do not have.
The Exchange also believes that it's equitable and not unfairly discriminatory to limit the discounts under the Sliding Scale Credit to Market-Makers with Affiliates that reach certain tiers under VIP. The Exchange notes that in the options industry, many options orders are routed by consolidators, which are firms that have both order router and Market-Maker operations. The Exchange is aware not only of the importance of providing credits on the order routing side in order to encourage the submission of orders (which is [sic] currently does via VIP), but also of the operations costs on the Market-Maker side. The Exchange believes the Sliding Scale Credit allows the Exchange to provide further relief to the Market-Maker side via the discount, which incents these Market- Makers to tighten market widths due to the reduced costs the incentives provide. Additionally, the Exchange believes the discount attracts more volume and liquidity to the Exchange, which benefits all Exchange participants through increased opportunities to trade as well as enhancing price discovery. The Exchange also notes that incentivizing a Market-Maker Affiliate to achieve higher tiers on the VIP, so that the Market-Maker can achieve higher tiers under the Sliding Scale Credit, can result in greater customer liquidity, and the resulting increased volume also benefits all market participants (including Market-Makers that do not have Affiliates or whose Affiliates do not achieve the higher tiers on the VIP; indeed, this increased volume may allow them to reach these tiers). Lastly, other options exchanges also provide credits to Market-Makers if a Market-Maker's affiliate adds a certain amount of customer liquidity to that exchange.
The Exchange does not believe that the proposed rule changes will impose any burden on competition that are not necessary or appropriate in furtherance of the purposes of the Act. In particular, the Exchange believes the proposed change to amend certain tier thresholds in VIP does not impose a burden on intramarket competition because it applies uniformly to all TPHs and incentivizes the sending of more simple and complex orders to the Exchange, which provides greater liquidity and trading opportunities. Additionally, the Exchange does not believe increasing credits under Tiers 3 and 4 of the Liquidity Provider Sliding Scale Credit imposes a burden on intramarket competition because, although it applies only to Market-Makers, Market-Makers are valuable market participants that provide liquidity in the marketplace and incur costs that other market participants do not incur. Market-Makers also have a number of obligations, including quoting obligations that other market participants do not have. Additionally, the Exchange notes that although the Sliding Scale Credit is limited to Market-Makers with an Affiliate, incentivizing a Market-Maker Affiliate to achieve higher tiers on the VIP, so that the affiliated Market-Maker can achieve higher tiers under the Sliding Scale Credit, can result in greater liquidity (including customer liquidity), and the resulting increased volume benefits all market participants.
The Exchange does not believe that the proposed rule changes will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed changes are intended to promote competition and better improve the Exchange's competitive position and make CBOE a more attractive marketplace in order to encourage market participants to bring increased volume to the Exchange (while still covering costs as necessary). Further, the proposed changes only affect trading on CBOE. To the extent that the proposed changes make CBOE a more attractive marketplace for market participants at other exchanges, such market participants are welcome to become CBOE market participants.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
The Charter of the Department of State's Cultural Property Advisory Committee (CPAC) has been renewed for an additional two years. The Charter of the Cultural Property Advisory Committee is being renewed for a two-year period. The Committee was established by the Convention on Cultural Property Implementation Act of 1983, 19 U.S.C. 2601
Cultural Heritage Center, U.S. Department of State, Bureau of Educational and Cultural Affairs, 2200 C Street NW., Washington, DC 20522. Telephone: (202) 632-6301; Fax: (202) 632-6300.
The Department of State announces a meeting of the U.S. State Department—Overseas Security Advisory Council on June 7 and 8, 2016. Pursuant to Sec. 10(d) of the Federal Advisory Committee Act (5 U.S.C. Appendix), 5 U.S.C. 552b(c)(4), and 5 U.S.C. 552b(c)(7)(E), it has been determined that the meeting will be closed to the public. The meeting will focus on an examination of corporate security policies and procedures and will involve extensive discussion of trade secrets and proprietary commercial information that is privileged and confidential, and will discuss law enforcement investigative techniques and procedures. The agenda will include updated committee reports, a global threat overview, and other matters relating to private sector security policies and protective programs and the protection of U.S. business information overseas.
For more information, contact Marsha Thurman, Overseas Security Advisory Council, U.S. Department of State, Washington, DC 20522-2008, phone: 571-345-2214.
Department of State.
Notice of Withdrawal of Request for Re-Consideration Concerning the Scope of Authorizations by Plains LPG Services, L.P. for Existing Pipeline Facilities on the Border of the United States and Canada Under the St. Clair River.
On May 23, 2014, the Department of State (Department) issued a Presidential Permit to Plains LPG Services, L.P. (Plains LPG) based on Plains LPG's acquisition of six existing pipelines under the St. Clair River. After the new permits were issued, Plains LPG provided new information that altered the Department's understanding of the historic authorization for two of the six St. Clair pipelines. In light of this additional information, the Department was revisiting Plains LPG's 2012 application and considering whether to issue a new permit for these two St. Clair pipelines that would authorize the
This action is effective on May 2, 2016.
Office of Energy Diplomacy, Energy Resources Bureau (ENR/EDP/EWA) Department of State 2201 C St. NW., Ste,. 4428, Washington, DC 20520, Attn: Sydney Kaufman, Tel: 202-647-2041. Email:
Additional information related to the Department's review Presidential Permit applications, including information concerning the St. Clair pipeline facilities, can be found at
The Department of State has renewed the charter of the Advisory Committee on International Law. ACIL is a critical forum for receiving informed public opinion and specialized advice on important legal matters. The Committee follows procedures prescribed by the Federal Advisory Committee Act (FACA). Its meetings are open to the public unless a determination is made in accordance with the FACA and 5 U.S.C. 552b(c) that a meeting or portion of a meeting should be closed to the public. Notice of each meeting will be published in the
60-day notice of intent to seek extension of approval: Information Collection Activities: Recordations (Rail and Water Carrier Liens), Water Carrier Tariffs, and Agricultural Contract Summaries.
Surface Transportation Board.
As required by the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3521 (PRA), the Surface Transportation Board (STB or Board) gives notice of its intent to seek from the Office of Management and Budget (OMB) an extension of the information collections required under 49 U.S.C. 11301 and 49 CFR 1177 (rail or water carrier equipment liens (recordations)), under 49 U.S.C. 13702(b) and 49 CFR 1312 (water carrier tariffs), and under 49 U.S.C. 10709(d) and 49 CFR 1313 (rail agricultural contract summaries). The information collections are described in more detail below.
Comments are requested concerning: (1) The accuracy of the Board's burden estimates; (2) ways to enhance the quality, utility, and clarity of the information collected; (3) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology when appropriate; and (4) whether the collection of information is necessary for the proper performance of the functions of the Board, including whether the collection has practical utility. Submitted comments will be summarized and included in the Board's request for OMB approval.
Comments on this information collection should be submitted by July 1, 2016.
Direct all comments to Chris Oehrle, Surface Transportation Board, 395 E Street SW., Washington, DC 20423-0001, or to
Under the PRA, a federal agency that conducts or sponsors a collection of information must display a currently valid OMB control number. A collection of information, which is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c), includes agency requirements that persons submit reports, keep records, or provide information to the agency, third parties, or the public. Under § 3506(c)(2)(A) of the PRA, federal agencies are required to provide, prior to an agency's submitting a collection to OMB for approval, a 60-day notice and comment period through publication in the
Surface Transportation Board.
60-day notice of intent to seek extension of approval: Arbitration Option Notices.
As required by the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3521 (PRA), the Surface Transportation Board (STB or Board) gives notice of its intent to seek approval from the Office of Management and Budget (OMB) for an extension of the process for filing Arbitration Option Notices. This information collection is described in detail below.
Comments on this information collection should be submitted by July 1, 2016.
Direct all comments to Chris Oehrle, Surface Transportation Board, 395 E Street SW., Washington, DC 20423-0001, or to
Under the PRA, a federal agency that conducts or sponsors a collection of information must display a currently valid OMB control number. A collection of information, which is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c), includes agency requirements that persons submit reports, keep records, or provide information to the agency, third parties, or the public. Under § 3506(c)(2)(A) of the PRA, federal agencies are required to provide, prior
Surface Transportation Board.
60-day notice of intent to seek extension of approval: System Diagram Maps.
As required by the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3521 (PRA), the Surface Transportation Board (STB or Board) gives notice of its intent to seek approval from the Office of Management and Budget (OMB) for an extension of the system diagram maps, described below.
Comments on this information collection should be submitted by July 1, 2016.
Direct all comments to Chris Oehrle, Surface Transportation Board, 395 E Street SW., Washington, DC 20423-0001, or to
Under the PRA, a federal agency that conducts or sponsors a collection of information must display a currently valid OMB control number. A collection of information, which is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c), includes agency requirements that persons submit reports, keep records, or provide information to the agency, third parties, or the public. Under § 3506(c)(2)(A) of the PRA, federal agencies are required to provide, prior to an agency's submitting a collection to OMB for approval, a 60-day notice and comment period through publication in the
Surface Transportation Board.
60-Day notice of intent to seek extension of approval: Rail Depreciation Studies.
As required by the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3521 (PRA), the Surface Transportation Board (STB or Board) gives notice of its intent to seek approval from the Office of Management and Budget (OMB) for an extension of the Rail Depreciation Studies. This information collection is described in detail below.
Comments are requested concerning: (1) The accuracy of the Board's burden estimates; (2) ways to enhance the quality, utility, and clarity of the information collected; (3) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology, when appropriate; and (4) whether the collection of information is necessary for the proper performance of the functions of the Board, including whether the collection has practical utility. Submitted comments will be summarized and included in the Board's request for OMB approval.
Comments on this information collection should be submitted by July 1, 2016.
Direct all comments to Chris Oehrle, Surface Transportation Board, 395 E Street SW., Washington, DC 20423-0001, or to
Under the PRA, a federal agency that conducts or sponsors a collection of information must display a currently valid OMB control number. A collection of information, which is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c), includes agency requirements that persons submit reports, keep records, or provide information to the agency, third parties, or the public. Under § 3506(c)(2)(A) of the PRA, federal agencies are required to provide, prior to an agency's submitting a collection to OMB for approval, a 60-day notice and comment period through publication in the
Federal Highway Administration (FHWA), DOT.
Notice.
This notice provides information regarding FHWA's finding that a Buy America waiver is appropriate for the use of non-domestic motor and machinery brakes for Southern Boulevard (SR 80) Bascule Bridge Replacement project that meet AASHTO Moveable Highway Bridge Design specifications (MHBDS) 5.5, 5.6, 6.7.13 in the State of Florida.
The effective date of the waiver is May 3, 2016.
For questions about this notice, please contact Mr. Gerald Yakowenko, FHWA Office of Program Administration, (202) 366-1562, or via email at
An electronic copy of this document may be downloaded from the
The FHWA's Buy America policy in 23 CFR 635.410 requires a domestic manufacturing process for any steel or iron products (including protective coatings) that are permanently incorporated in a Federal-aid construction project. The regulation also provides for a waiver of the Buy America requirements when the application would be inconsistent with the public interest or when satisfactory quality domestic steel and iron products are not sufficiently available. This notice provides information regarding FHWA's finding that a Buy America waiver is appropriate for use of non-domestic motor and machinery brake systems for Southern Boulevard (SR 80) Bascule Bridge Replacement project in the State of Florida.
In accordance with Division K, section 122 of the “Consolidated and Further Continuing Appropriations Act, 2015” (Pub. L. 113-235), FHWA published a notice of intent to issue a waiver on its Web site
In accordance with the provisions of section 117 of the SAFETEA-LU Technical Corrections Act of 2008 (Pub. L. 110-244, 122 Stat. 1572), FHWA is providing this notice as its finding that a waiver of Buy America requirements is appropriate. The FHWA invites public comment on this finding for an additional 15 days following the effective date of the finding. Comments may be submitted to FHWA's Web site via the link provided to the waiver page noted above.
23 U.S.C. 313; Pub. L. 110-161, 23 CFR 635.410).
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of applications for exemptions; request for comments.
FMCSA announces receipt of applications from 21 individuals for exemption from the vision requirement
Comments must be received on or before June 1, 2016. All comments will be investigated by FMCSA. The exemptions will be issued the day after the comment period closes.
You may submit comments bearing the Federal Docket Management System (FDMS) Docket No. FMCSA-2016-0027 using any of the following methods:
•
•
•
•
Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption from the Federal Motor Carrier Safety Regulations for a 2-year period if it finds “such exemption would likely achieve a level of safety that is equivalent to or greater than the level that would be achieved absent such exemption.” FMCSA can renew exemptions at the end of each 2-year period. The 21 individuals listed in this notice have each requested such an exemption from the vision requirement in 49 CFR 391.41(b)(10), which applies to drivers of CMVs in interstate commerce. Accordingly, the Agency will evaluate the qualifications of each applicant to determine whether granting an exemption will achieve the required level of safety mandated by statute.
Mr. Barajas Ramirez, 54, has had a retinal detachment in his left eye since 2009. The visual acuity in his right eye is 20/20, and in his left eye, hand motion. Following an examination in 2016, his ophthalmologist stated, “In my medical opinion I see no ocular reason to exclude Mr. Barajas from driving or operating a commercial vehicle.” Mr. Barajas Ramirez reported that he has driven tractor-trailer combinations for 13 years, accumulating 140,000 miles. He holds a Class A CDL from Illinois. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Bottorf, 61, has had amblyopia in his left eye since childhood. The visual acuity in his right eye is 20/20, and in his left eye, 20/80. Following an examination in 2015, his optometrist stated, “I certify that, in my medical opinion, Curt Bottorf has sufficient vision to perform the driving tasks required to operate a commercial vehicle.” Mr. Bottorf reported that he has driven straight trucks for 23 years, accumulating 345,000 miles. He holds an operator's license from Pennsylvania. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Boyd, 51, has had corneal ectasia in his right eye since 2013. The visual acuity in his right eye is 20/50, and in his left eye, 20/20. Following an examination in 2015, his ophthalmologist stated, “Ronnie has sufficient vision to perform the driving tasks required to operate a commercial vehicle.” Mr. Boyd reported that he has driven straight trucks for 1 year, accumulating 7,000 miles and tractor-trailer combinations for 6 years, accumulating 480,000 miles. He holds a Class A CDL from Minnesota. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Casey, 56, has had amblyopia in his right eye since birth. The visual acuity in his right eye is 20/400, and in his left eye, 20/40. Following an examination in 2016, his ophthalmologist stated, “Mr. Casey has sufficient vision to operate a commercial vehicle.” Mr. Casey reported that he has driven straight trucks for 34 years, accumulating 153,000 miles, and tractor-trailer combinations for 34 years, accumulating 2.04 million miles. He holds a Class AM CDL from Massachusetts. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Dillon, 47, has macular scarring in his left eye due to a traumatic incident in 1991. The visual acuity in his right eye is 20/20, and in his left eye, counting fingers. Following an examination in 2016, his optometrist stated, “It is my medical opinion that Mr. Dillion has sufficient vision to perform the driving tests required to operate a commercial vehicle under your guidelines.” Mr. Dillon reported that he has driven straight trucks for 23 years, accumulating 11,500 miles and tractor-trailer combinations for 10 years, accumulating 30,000 miles. He holds a Class A CDL from Minnesota. His driving record for the last 3 years shows
Mr. Ellis, 48, has had a prosthetic right eye since 2000. The visual acuity in his right eye is no light perception, and in his left eye, 20/20. Following an examination in 2015, his optometrist stated, “In regards to his visual competence, Mr. Ellis is quite sufficiently equipped to operate commercial vehicles.” Mr. Ellis reported that he has driven tractor-trailer combinations for 30 years, accumulating 2.4 million miles. He holds a Class A CDL from Iowa. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Ellis, 52, has had a retinal scar in his right eye since childhood. The visual acuity in his right eye is 20/50, and in his left eye, 20/20. Following an examination in 2015, his optometrist stated, “. . . Mr. Ellis has stable vision that hasn't changed and he is safe to operate a commercial motor vehicle as he has been successfully doing for years.” Mr. Ellis reported that he has driven straight trucks for 35 years, accumulating 280,000 miles, tractor-trailer combinations for 5 years, accumulating 390,000 miles and buses for 2 years, accumulating 2,400 miles. He holds a Class A CDL from North Carolina. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Garris, 47, has had a cataract in his right eye since birth. The visual acuity in his right eye is hand motion, and in his left eye, 20/20. Following an examination in 2015, his ophthalmologist stated, “Given his long-term record of safely driving with one good eye, I see no reason to deny him continued privilege of driving as a commercial driver.” Mr. Garris reported that he has driven tractor-trailer combinations for 25 years, accumulating 1.63 million miles. He holds a Class A CDL from Oklahoma. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Hammond, 27, has had amblyopia in his right eye since childhood. The visual acuity in his right eye is 20/400 and in his left eye, 20/20. Following an examination in 2015, his optometrist stated, “The patient states that he has safely driven commercial vehicles for many years with no troubles. I think the patient should be able to drive safely with his excellent vision (left eye) and his excellent visual field with both eyes.” Mr. Hammond reported that he has driven straight trucks for 2 years, accumulating 28,080 miles. He holds a Class D CDL from Ohio. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Kosinko, 55, has a scar in his right eye due to a traumatic incident in 2011. The visual acuity in his right eye is 20/600, and in his left eye, 20/30. Following an examination in 2015, his optometrist stated, “In my medical opinion Russell does have sufficient vision to perform the driving tasks required to operate a commercial vehicle.” Mr. Kosinko reported that he has driven straight trucks for 20 years, accumulating 2 million miles, and tractor-trailer combinations for 20 years, accumulating 520,000 miles. He holds a Class AM CDL from Pennsylvania. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Liston, 47, has had a chorioretinal scar in his right eye since birth. The visual acuity in his right eye is 20/70, and in his left eye, 20/20. Following an examination in 2016, his optometrist stated, “It is my opinion that Mr. Liston has sufficient vision to perform driving tasks required to operate a commercial vehicle as it relates to his vision.” Mr. Liston reported that he has driven straight trucks for 11 years, accumulating 126,720 miles, and tractor-trailer combinations for 11 years, accumulating 31,680 miles. He holds a Class AM CDL from Tennessee. His driving record for the last 3 years shows one crash, to which he did not contribute and for which he was not cited, and no convictions for moving violations in a CMV.
Mr. Miller, 72, has had a prosthetic right eye since 1969. The visual acuity in his right eye is no light perception, and in his left eye, 20/25. Following an examination in 2015, his optometrist stated, “In my professional medical opinion, Mr. Larry Miller has sufficient vision to perform the driving tasks required to operate a commercial vehicle.” Mr. Miller reported that he has driven straight trucks for 10 years, accumulating 250,000 miles, and tractor-trailer combinations for 43 years, accumulating 4.3 million miles. He holds a Class A CDL from Missouri. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Miller, 52, has had exotropia in both eyes since childhood, preventing him from using both eyes together. The visual acuity in his right eye is 20/20, and in his left eye, 20/20. Following an examination in 2016, his optometrist stated, “In my opinion Mr. Miller has vision adequate to drive a commercial vehicle, especially in light of his long work history doing this very job with an apparently successful track record.” Mr. Miller reported that he has driven straight trucks for 25 years, accumulating 50,000 miles. He holds a Class B CDL from Louisiana. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Patterson, 56, has had amblyopia in his left eye since childhood. The visual acuity in his right eye is 20/20, and in his left eye, counting fingers. Following an examination in 2015, his ophthalmologist stated, “I do feel that Mr. Patterson, in my medical opinion, has sufficient vision to perform the driving tasks required to operative [
Mr. Peterson, 67, had a retinal detachment in his left eye in 1965. The visual acuity in his right eye is 20/20, and in his left eye, counting fingers. Following an examination in 2015, his ophthalmologist stated, “His color vision is completely normal, and in my medical opinion, he has sufficient vision to perform the driving tasks required to operate a commercial vehicle.” Mr. Peterson reported that he has driven straight trucks for 3 years, accumulating 30,000 miles, and tractor-trailer combinations for 20 years, accumulating 1 million miles. He holds a Class A CDL from Ohio. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Pitre Rodriguez, 57, has had amblyopia in his right eye since childhood. The visual acuity in his right eye is 20/400, and in his left eye, 20/20. Following an examination in 2015, his optometrist stated, “Mr. Pitre has sufficient vision to perform the driving test required and to operate a commercial vehicle.” Mr. Pitre Rodriguez reported that he has driven straight trucks for 23 years, accumulating 61,600 miles. He holds a Class A CDL from FL. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Rueckert, 63, had a retinal detachment in his left eye in 2013. The visual acuity in his right eye is 20/20, and in his left eye, 20/100. Following an examination in 2015, his optometrist stated, “In my opinion, John has sufficient vision to perform the driving tasks required to operate a commercial vehicle.” Mr. Rueckert reported that he has driven straight trucks for 45 years, accumulating 2.25 million miles and tractor-trailer combinations for 39 years, accumulating 5.85 million miles. He holds a Class A CDL from South Dakota. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Schmit, 54, has a prosthetic left eye due to a traumatic incident in 1987. The visual acuity in his right eye is 20/20, and in his left eye, no light perception. Following an examination in 2016, his optometrist stated, “It is my medical opinion that he has sufficient vision to perform the driving tasks required to operate a commercial vehicle.” Mr. Schmit reported that he has driven straight trucks for 20 years, accumulating 250,000 miles and tractor-trailer combinations for 4 years, accumulating 22,000 miles. He holds a Class A CDL from Nebraska. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Strickland, 25, has had refractive amblyopia in his right eye since childhood. The visual acuity in his right eye is 20/400, and in his left eye, 20/20. Following an examination in 2015, his optometrist stated, “He should be cleared to drive a commercial vehicle from a visual standpoint in my opinion.” Mr. Strickland reported that he has driven straight trucks for 8 years, accumulating 12,800 miles. He holds a Class C CDL from North Carolina. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Szudor, 44, has had amblyopia in his right eye since childhood. The visual acuity in his right eye is 20/200, and in his left eye, 20/20. Following an examination in 2015, his optometrist stated, “Yes, Mr. Szudor has sufficient vision to perform the driving tasks to operate commercial vehicle.” Mr. Szudor reported that he has driven buses for 8 years, accumulating 320,000 miles. He holds an operator's license from Florida. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Zimmerman, 69, has had amblyopia in his right eye since childhood. The visual acuity in his right eye is light perception, and in his left eye, 20/20. Following an examination in 2015, his optometrist stated, “In my medical opinion Mr. Zimmerman has sufficient vision to perform the driving tasks required to operate a commercial vehicle.” Mr. Zimmerman reported that he has driven tractor-trailer combinations for 40 years, accumulating 5.2 million miles. He holds a Class A CDL from Pennsylvania. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
FMCSA encourages you to participate by submitting comments and related materials.
If you submit a comment, please include the docket number for this notice, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. 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
FMCSA will consider all comments and material received during the comment period. FMCSA may issue a final determination at any time after the close of the comment period.
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice of intent (NOI) to prepare an Environmental Impact Statement (EIS).
Through this Notice, FRA announces its intent to jointly prepare an environmental impact statement (EIS) with the New Jersey Transit Corporation (NJ TRANSIT) for the Hudson Tunnel Project (the Proposed Action or the Project) under the National Environmental Policy Act (NEPA). The Proposed Action is
FRA invites the public and all interested parties to provide comments on the scope of the EIS, including the proposed purpose and need, the Proposed Action and alternatives to be considered in the EIS, potential environmental impacts of concern and methodologies to be used in the EIS, the approach for public and agency involvement, and any other particular concerns about the potential impacts of the Proposed Action.
Persons interested in providing written comments on the scope of the EIS must do so by May 31, 2016. Please submit written comments via the internet, email, or mail, using the contact information provided below.
Persons may also provide comments orally or in writing at the public scoping meetings. FRA and NJ TRANSIT will hold two scoping meetings on the following dates:
• May 17, 2016, at the Hotel Pennsylvania, Gold Ballroom, 3rd Floor, 401 Seventh Avenue at West 33rd Street, New York, New York 10001.
• May 19, 2016, at Union City High School, 2500 Kennedy Boulevard, Union City, New Jersey 07087.
Both days will include an afternoon session from 3 to 5 p.m. with a brief presentation about the Proposed Action at 4 p.m., and an evening session from 6 to 8 p.m. with a brief presentation about the Proposed Action at 7 p.m. The public can review Project information, talk informally with members of the study staff, and formally submit comments to the FRA (to a stenographer or in writing). The meeting facilities will be accessible to persons with disabilities. Spanish language translators will be present. If you need special translation or signing services or other special accommodations, please contact the Project team five days prior to the meeting at 973-261-8115, or email
FRA and NJ TRANSIT will give equal consideration to oral and written comments.
The public and other interested parties are encouraged to comment via the internet at the Project's Web site (
Amishi Castelli, Ph.D., Environmental Protection Specialist, Office of Railroad Policy and Development, USDOT Federal Railroad Administration, One Bowling Green, Suite 429, New York, NY 10004, or
FRA and NJ TRANSIT will prepare the EIS in compliance with NEPA, the Council on Environmental Quality (CEQ) regulations implementing NEPA (40 CFR parts 1500-1508), and the FRA Procedures for Considering Environmental Impacts (FRA's Environmental Procedures) (64 FR 28545, May 26, 1999; 78 FR 2713, Jan. 14, 2013). Consistent with Section 11503 of the Fixing America's Surface Transportation Act of 2015 (FAST Act), FRA and NJ TRANSIT will prepare the EIS consistent with 23 U.S.C. 139. After release and circulation of a Draft EIS for public comment, FRA intends to issue a single document that consists of the Final EIS and Record of Decision under Public Law 112-141, 126 Stat. 405, Section 1319(b) unless it determines the statutory criteria or practicability considerations preclude issuing a combined document.
The EIS will also document compliance with other applicable Federal, state, and local environmental laws and regulations, including Section 106 of the National Historic Preservation Act (NHPA); the Conformity requirements of the Clean Air Act; the Clean Water Act; Section 4(f) of the Department of Transportation Act of 1966 (Section 4(f)); the Endangered Species Act; Executive Order 11988 and USDOT Order 5650.2 on Floodplain Management; Executive Order 11990 on Protection of Wetlands; the Magnuson-Stevens Act related to Essential Fish Habitat; the Coastal Zone Management Act; and Executive Order 12898 on Environmental Justice. The EIS will provide FRA, NJ TRANSIT, and other cooperating and participating agencies and the public with information about alternatives that meet the Proposed Action's purpose and need, including their environmental impacts and appropriate measures to avoid, minimize, and mitigate those impacts.
The Proposed Action may affect historic properties and will be subject to the requirements of Section 106 of the NHPA (54 U.S.C. 306108). Consistent with regulations issued by the Advisory Council on Historic Preservation (36 CFR part 800), FRA intends to coordinate compliance with Section 106 of the NHPA with the preparation of the EIS. The public and interested parties may also provide input relevant to FRA's review under Section 106 including identifying potentially eligible resources and the potential effect of the Proposed Action on those resources. In addition, the public or other interested parties may also request to participate in the Section 106 process as a consulting party under 36 CFR part 800.
The existing NEC rail tunnel beneath the Hudson River is known as the North River Tunnel. This tunnel is used by Amtrak for intercity passenger rail service and by NJ TRANSIT for commuter rail service. The approach to the tunnel begins east of NJ TRANSIT's Frank R. Lautenberg Station in Secaucus, New Jersey (which is 5 miles east of Amtrak and NJ TRANSIT's Newark Penn Station). East of the Secaucus station, the NEC has two tracks that approach the tunnel on a raised embankment through the towns of Secaucus and North Bergen, New Jersey. Tracks enter a tunnel portal in North Bergen, passing beneath Union City and Weehawken, New Jersey and the Hudson River before emerging within the Penn Station New York (PSNY) rail complex in New York City. The tunnel has two separate tubes, each accommodating a single track for electrically powered trains, and extends approximately 2.5 miles from the tunnel portal in North Bergen to PSNY. The existing North River Tunnel is a critical NEC asset and is the only intercity passenger rail crossing into New York City from New Jersey and areas west and south.
The NEC is the most heavily used passenger rail line in the U.S., both in terms of ridership and service frequency. Amtrak operates over the
Extensive engineering work and environmental documentation have been prepared over the past two decades for a new Hudson River rail tunnel. This has included the detailed studies and design conducted for the Access to the Region's Core (ARC) project from 1995 through 2010. The ARC project evaluated several options for construction of a new tunnel under the Hudson River in combination with an expansion of station capacity in midtown Manhattan to accommodate growing passenger demand. In addition, Amtrak conducted the Gateway Program Feasibility Study in 2011-2013, which assessed options for constructing a new Hudson River tunnel. Amtrak's Gateway Program envisions a series of improvement projects to upgrade and expand the capacity of the NEC. While many of the Gateway improvements are still being fully defined, a new Hudson Tunnel on the NEC is urgently needed to maintain existing service.
In 2012, the FRA launched the NEC FUTURE study to consider the role of rail passenger service in the context of current and future transportation demands and to evaluate the appropriate level of capacity improvements to make across the NEC. The intent of the NEC FUTURE program is to help develop a long-term vision and investment program for the NEC. Through NEC FUTURE, FRA is currently evaluating overall capacity improvements and environmental consequences associated with improved NEC rail services, including trans-Hudson service. However, as described above, this Proposed Action addresses a specific need due to the deterioration of the existing North River Tunnel and can be considered independently from the other projects analyzed in the NEC FUTURE EIS. All three build alternatives evaluated in the NEC FUTURE Tier 1 Draft EIS FRA released in November 2015 included new Hudson River tunnel investments similar to this Proposed Action. This EIS may incorporate the appropriate analysis and other relevant elements from the NEC FUTURE Tier 1 EIS while focusing on the issues specific to this independent Project.
As appropriate, FRA and NJ TRANSIT will use the work conducted for the ARC project and Amtrak's feasibility study to provide baseline information for the study of the Proposed Action. While the Proposed Action addresses maintenance and resilience of the NEC Hudson River crossing, it would not increase rail capacity. At the same time, the Proposed Action would not preclude other future projects to expand rail capacity in the area. Accordingly, although the Proposed Action may also be an element of a larger program to expand rail capacity, it would meet an urgent existing need and will be evaluated as a separate project from any larger initiative. Ultimately, an increase in service between Newark Penn Station and PSNY would not occur until other substantial infrastructure capacity improvements are built in addition to a new Hudson River rail tunnel. These improvements will be the subject of one or more separate design, engineering, and appropriate environmental reviews.
The purpose of the Proposed Action is: (1) To preserve the current functionality of Amtrak's NEC service and NJ TRANSIT's commuter rail service between New Jersey and PSNY by repairing the deteriorating North River Tunnel; and (2) to strengthen the NEC's resiliency to support reliable rail service by providing redundant capacity under the Hudson River for Amtrak and NJ TRANSIT NEC trains between New Jersey and the existing PSNY. These improvements must be achieved while maintaining uninterrupted commuter and intercity rail service and by optimizing the use of existing infrastructure.
Service reliability through the tunnel has been compromised due to damage to tunnel components Superstorm Sandy caused, when it inundated both tubes in the North River Tunnel with seawater in October 2012. That storm resulted in the cancellation of all Amtrak and NJ TRANSIT service into New York City for five days. Although the tunnel was restored to service and is now safe for travel, chlorides from the seawater remain in the tunnel's concrete liner and bench walls, causing ongoing damage to the bench walls, imbedded steel, track, and signaling and electrical components.
The damage Superstorm Sandy caused is compounded by the tunnel's age and the intensity of its current use (operating at capacity to meet current demands), resulting in frequent delays due to component failures within the tunnel. With no other Hudson River passenger rail crossing into PSNY, single-point failures can suspend rail service, causing delays that cascade up and down the NEC as well as throughout NJ TRANSIT's commuter system, disrupting service for hundreds of thousands of passengers. For example, on March 17, 2016, a NJ TRANSIT train became disabled in one of the tunnel's tubes during the morning peak period, resulting in delays to 57 other Amtrak and NJ TRANSIT trains headed into and out of PSNY that day. Service disruptions will continue and will over time happen more frequently as the deterioration from the seawater inundation continues and components fail in an unpredictable manner.
Because of the importance of the North River Tunnel to essential commuter and intercity rail service between New Jersey and New York, City, rehabilitation of the existing North River Tunnel must be accomplished without unacceptable reductions in weekday service. Removing one tube in the existing North River Tunnel from operation without new capacity in place would reduce weekday service to volumes well below the current maximum capacity of 24 peak direction trains per hour.
In addition, the existing two-track North River Tunnel is operating at full capacity and does not provide redundancy for reliable train operations during disruptions or maintenance. Therefore, any service disruption results in major passenger delays and substantial reductions to overall system flexibility, reliability and on-time performance. This condition is exacerbated by the need to perform increased maintenance to address damage Superstorm Sandy caused. These maintenance demands are difficult to meet because of the intensity of rail service in the tunnel. Efforts to maintain the North River Tunnel in a functional condition currently require nightly and weekend tunnel outages with reductions in service due to single-track operations. Train service is adjusted to allow the closure of one tube of the North River Tunnel each weekend for maintenance for a 55-hour window beginning Friday evening and ending early Monday morning.
The Proposed Action, the Hudson Tunnel Project, consists of:
• A new NEC rail tunnel with two tubes and electrified tracks beneath the Hudson River, extending from a new tunnel portal in North Bergen, New Jersey to the PSNY rail complex;
• Ventilation shaft buildings above the tunnel on both sides of the Hudson River to provide smoke ventilation during emergencies;
• Modifications to the existing NEC tracks in New Jersey and additional track on the NEC to connect the new tunnel to the NEC, beginning just east of Frank R. Lautenberg Station in Secaucus, New Jersey, and approaching the new tunnel portal in North Bergen, New Jersey;
• Modifications to connecting rail infrastructure at PSNY to connect the new tunnel's tracks to the existing tracks at PSNY; and
• Rehabilitation of the existing North River Tunnel.
In addition to those permanent features, the Proposed Action would involve the following types of construction activities, which will be described and evaluated in the Draft EIS:
• Construction of new tracks along the NEC between Frank R. Lautenberg Station and the new tunnel portal;
• Construction of the new tunnel using Tunnel Boring Machine (TBM) technology, which is conducted underground from a tunnel portal. At this time, it is anticipated that tunneling would likely occur from the New Jersey side of the new tunnel;
• Construction staging sites near the tunnel portal and at the vent shaft site in New Jersey. These locations would be used to access the tunnel and to remove rock from the tunnel while it is being bored;
• Construction staging site at the vent shaft site in Manhattan; and
• Potential construction activities that affect the Hudson River riverbed above the tunnel location.
Alternatives will be developed based on the purpose of and need for the Project, information obtained through the scoping process, and information from previous studies. The EIS process will consider a No Action Alternative and a reasonable range of Build Alternatives identified through an alternatives development process. The Draft EIS will document the alternatives development and screening process. On the basis of that screening process and further analysis in the Draft EIS itself, FRA anticipates that the Draft EIS will also identify and describe the Preferred Alternative consistent with 40 CFR 1502.14(e).
Consistent with NEPA and FRA's Environmental Procedures, the EIS will consider the potential direct, indirect, and cumulative effects of the Project alternatives on the social, economic, and environmental resources in the study area. This analysis will include identification of study areas; documentation of the affected environment; evaluation of direct and indirect effects of the alternatives; and identification of measures to avoid and/or mitigate adverse impacts.
The analysis will include detailed consideration of impacts that would occur during the Project's construction—including construction of the new tunnel and rehabilitation of the existing tunnel—as well as consideration of the impacts once the construction is complete. The Proposed Action would not expand capacity on this portion of the NEC as compared to the No Action Alternative, and therefore service changes are not an anticipated consequence of the Proposed Action. FRA and NJ TRANSIT will evaluate direct, indirect and cumulative changes to the human and natural environment resulting from the alternatives, including analyses of the following resource areas:
• Transportation;
• Social and economic conditions;
• Property acquisition;
• Parks and recreational resources;
• Visual and aesthetic resources;
• Historic and archaeological resources;
• Air quality;
• Greenhouse gas emissions and resilience;
• Noise and vibration;
• Ecology (including wetlands, water and sediment quality, floodplains, and biological resources);
• Threatened and endangered species;
• Contaminated materials; and
• Environmental justice.
This NOI initiates the scoping process under NEPA, which helps guide the development of the Draft EIS. FRA and NJ TRANSIT invite all interested individuals, organizations, and federal, state, and local agencies to comment on the scope of the EIS. Comments are encouraged on the Proposed Action's purpose and need; the alternatives to consider in the EIS; the analyses to include in the EIS and the study area and methodologies to be used; the approach for public and agency involvement; and any particular concerns about the anticipated impacts of the Proposed Action.
Public agencies with jurisdiction are requested to advise FRA of the applicable permit and environmental review requirements of each agency, and the scope and content of the environmental information germane to the agency's statutory responsibilities in connection with the Proposed Action. Public agencies are requested to advise FRA if they anticipate taking a major action in connection with the Proposed Action and if they wish to cooperate in the preparation of the EIS under 40 CFR 1501.16.
FRA will coordinate with participating agencies during development of the Draft EIS under 23 U.S.C. 139. FRA will also coordinate with federally recognized tribes and Consulting Parties established under Section 106 of the NHPA.
The lead agencies will invite all Federal and non-Federal agencies and Native American tribes that may have an interest in the Proposed Action to become participating agencies for the EIS. If an agency or tribe is not invited and would like to participate, please contact FRA at the contact information listed above. The lead agencies will develop a Coordination Plan summarizing how they will engage the public, agencies, and tribes in the process. The Coordination Plan will be posted to the Project Web site (
National Highway Traffic Safety Administration (NHTSA), Department of Transportation.
Notice of proposed extension, without change, of a currently approved collection of information.
Before a federal agency may collect certain information from the public, the agency must receive approval from the Office of Management and Budget (“OMB”). Under procedures established by the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Comments must be submitted on or before July 1, 2016.
You may submit comments to the docket number identified in the heading of this document by any of the following methods:
•
•
•
•
Regardless of how you submit your comments, please be sure to mention the docket number of this document and cite OMB Clearance No. 2127-0609, “Criminal Penalty Safe Harbor Provision.”
You may call the Docket at 202-366-9322.
Note that all comments received will be posted without change to
Kerry Kolodziej, Office of the Chief Counsel, NCC-100, National Highway Traffic Safety Administration, 1200 New Jersey Avenue SE., Washington, DC 20590 (telephone: 202-366-5263). Please identify the relevant collection of information by referring to OMB Clearance Number 2127-0609 “Criminal Penalty Safe Harbor Provision.”
Under the Paperwork Reduction Act of 1995, before an agency submits a proposed collection of information to OMB for approval, it must publish a document in the
(i) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(ii) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(iii) how to enhance the quality, utility, and clarity of the information to be collected; and
(iv) how to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
In compliance with these requirements, NHTSA asks for public comment on the following proposed extension, without change, of a currently approved collection of information:
We believe that there will be very few criminal prosecutions under section 30170, given its elements. Since the safe harbor related rule has been in place, the Agency has not received any reports. Accordingly, the rule is not likely to be a substantial motivating force for a submission of a proper report. We estimate that no more than one person a year would invoke this new collection of information, and we do not anticipate receiving more than one report a year from any particular person.
As stated before, we estimate that no more than one person a year would be subject to this collection of information. Incrementally, we estimate that on average it will take no longer than two hours for a person to compile and submit the information we are requiring to be reported. Therefore, the total burden hours on the public per year is estimated to be a maximum of two hours.
Since nothing in the rule requires those persons who submit reports pursuant to this rule to keep copies of any records or reports submitted to us, recordkeeping costs imposed would be zero hours and zero costs.
44 U.S.C. 3506; delegation of authority at 49 CFR 1.95.
Notice of open meeting.
This notice announces an open meeting of the Community Development Advisory Board (the Advisory Board), which provides advice to the Director of the Community Development Financial Institutions Fund (CDFI Fund). The meeting will be open to the public via live webcast at
The meeting will be held from 9:00 a.m. to 4:00 p.m. Eastern Daylight Time on Tuesday, May 17, 2016.
The Advisory Board meeting will be held in the Cash Room at the U.S. Department of the Treasury located at 1500 Pennsylvania Avenue NW., Washington, DC 20220.
In general, the CDFI Fund will make all statements available in their original format, including any business or personal information provided such as names, addresses, email addresses, or telephone numbers, for public inspection and photocopying at the CDFI Fund. The CDFI Fund is open on official business days between the hours of 9:00 a.m. and 5:00 p.m. You can make an appointment to inspect statements by emailing
Bill Luecht, Senior Advisor, Office of Legislative and External Affairs, CDFI Fund, 1500 Pennsylvania Avenue NW., Washington, DC 20220, (202) 653-0322 (this is not a toll free number) or
Section 104(d) of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4703(d)) established the Advisory Board. The charter for the Advisory Board has been filed in accordance with the Federal Advisory Committee Act, as amended (5 U.S.C. App.), and with the approval of the Secretary of the Treasury.
The function of the Advisory Board is to advise the Director of the CDFI Fund (who has been delegated the authority to administer the CDFI Fund) on the policies regarding the activities of the CDFI Fund. The Advisory Board does not advise the CDFI Fund on approving or declining any particular application for monetary or non-monetary awards. The Advisory Board shall meet at least annually.
It has been determined that this document is not a major rule as defined in Executive Order 12291 and therefore regulatory impact analysis is not required. In addition, this document does not constitute a rule subject to the Regulatory Flexibility Act (5 U.S.C. chapter 6).
In accordance with section 10(a) of the Federal Advisory Committee Act, 5 U.S.C. App. 2 and the regulations thereunder, Bill Luecht, Designated Federal Officer of the Advisory Board, has ordered publication of this notice that the Advisory Board will convene an open meeting which will be held in the Cash Room at the U.S. Department of the Treasury located at 1500 Pennsylvania Avenue NW., Washington, DC 20220, from 9:00 a.m. to 4:00 p.m. Eastern Daylight Time on Tuesday, May 17, 2016. The room will accommodate up to 50 members of the public on a first-come, first-served basis.
Because the meeting will be held in a secure federal building, members of the public who wish to attend the meeting must register in advance. The link to the online registration system can be found in the meeting announcement found at the top of
The Advisory Board meeting will include a report from the CDFI Fund Director on the activities of the CDFI Fund since the last Advisory Board meeting and on Fiscal Year 2016 priorities, and a discussion on the development of a five-year strategic plan.
12 U.S.C. 4703.
Veterans Health Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521), this notice announces that the Veterans Health Administration (VHA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden; it includes the actual data collection instrument.
Comments must be submitted on or before June 1, 2016.
Submit written comments on the collection of information through
Crystal Rennie, Enterprise Records Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 632-7492 or email
1. Learners' Perceptions Survey PR, VA Form 10-0439.
2. Learners' Perceptions Survey AH, VA Form 10-0439.
Under the authority of Federal Law 38 U.S.C. Part V, Chapter 73, Section 7302, the Department of Veterans Affairs (VA) provides education and training to over 120,000 national cohorts of health care trainees per year to assist in providing an adequate supply of health personnel for VA and the Nation. VA is further required to evaluate this program on a continuing basis and determine its effectiveness in achieving its goals (Federal Law, 38 U.S.C. Part I, Chapter 5, Section 527). In addition, the Government Performance and Results Act (GPRA) of 1993, requires Federal agencies to set goals, measure performance, and report on the accomplishments.
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
a. Learners' Perceptions Survey PR, VA Form 10-0439—3,750 hours.
b. Learners' Perceptions Survey AH, VA Form 10-0439—3,750 hours.
a. Learners' Perceptions Survey PR, VA Form 10-0439—15 minutes.
b. Learners' Perceptions Survey AH, VA Form 10-0439—15 minutes.
a. Learners' Perceptions Survey PR, VA Form 10-0439—15,000.
b. Learners' Perceptions Survey AH, VA Form 10-0439—15,000.
By direction of the Secretary.
Copyright Royalty Board, Library of Congress.
Final rule and order.
The Copyright Royalty Judges announce their determination of rates and terms for two statutory licenses (permitting certain digital performances of sound recordings and the making of ephemeral recordings) for the period beginning January 1, 2016, and ending on December 31, 2020.
LaKeshia Keys, Program Specialist, at 202-707-7658 or
The Copyright Royalty Judges (Judges) hereby issue their written determination of royalty rates and terms to apply from January 1, 2016, through December 31, 2020, to digital performance of sound recordings over the Internet by nonexempt, noninteractive transmission services and to the making of ephemeral recordings to facilitate those performances.
The rate for commercial subscription services in 2016 is $0.0022 per performance. The rate for commercial nonsubscription services in 2016 is $0.0017 per performance. The rates for the period 2017 through 2020 for both subscription and nonsubscription services shall be adjusted to reflect the increases or decreases, if any, in the general price level, as measured by the Consumer Price Index applicable to that rate year, as set forth in the regulations adopted by this determination.
The rates for noncommercial webcasters are: $500 annually for each station or channel for all webcast transmissions totaling not more than 159,140 Aggregate Tuning Hours (ATH) in a month, for each year in the rate term. In addition, if, in any month, a noncommercial webcaster makes total transmissions in excess of 159,140 ATH on any individual channel or station, the noncommercial webcaster shall pay per-performance royalty fees for the transmissions it makes on that channel or station in excess of 159,140 ATH at the rate of $0.0017 per performance. The rates for transmissions over 159,140 ATH per month for the period 2017 through 2020 shall be adjusted to reflect the increases or decreases, if any, in the general price level, as measured by the Consumer Price Index applicable to that rate year, as set forth in the regulations adopted by this determination.
The Judges also determine herein details relating to the rates for each category of webcasting service, such as minimum fee and administrative terms. The regulatory language codifying the rates and terms of the Judges' determination
The licenses at issue in the captioned proceeding,
The Act requires that the Judges “shall establish rates and terms that most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller.” 17 U.S.C. 114(f)(2)(B). The marketplace the Judges look to is a hypothetical marketplace, free of the influence of compulsory, statutory licenses.
Following the timeline prescribed by the Act, the Judges published notice of commencement of this proceeding in the
The Judges published notice of the CBI-SoundExchange settlement in November 2014.
The NPR-CPB settlement with SoundExchange proposed creation of a new Subpart D to part 380 of the Regulations entitled Certain Transmissions by Public Broadcasting Entities. IBS was the only commenting party. IBS made procedural and substantive objections to the settlement. Notwithstanding, the Judges concluded that, as the proposed settlement would bind only the “Covered Entities,”
The Act provides that the Judges shall make their determinations “on the basis of a written record, prior determinations and interpretations of the Copyright Royalty Tribunal, Librarian of Congress . . .” and their own prior determinations to the extent those determinations are “not inconsistent with a decision of the Register of Copyrights . . .” 17 U.S.C. 803(a). Pursuant to 17 U.S.C. 803(b), the Judges conduct a hearing to create that “written record,” in order to issue their determination as required by 17 U.S.C. 801(b)(1) and 803(1).
To that end, non-settling parties appeared before the Judges for a determination hearing. At the hearing, SoundExchange, Inc. (SoundExchange), a member organization comprised of copyright owners and performing artists, and the designated Collective in this proceeding, and Mr. George Johnson, dba GEO Music, represented the interests of licensors. Seven licensees participated in the hearing.
The hearing commenced on April 27, 2015, and concluded on June 3, 2015. The parties submitted proposed findings and conclusions (and responses thereto) in writing, prior to their closing arguments on July 21, 2015. During the hearing, the Judges heard oral testimony from 47 witnesses, some of them for both direct case and rebuttal testimony. The witnesses included 16 qualified experts. The Judges admitted 660 exhibits into evidence, consisting of over 12,000 pages of documents, and considered numerous illustrative and demonstrative materials that focused on aspects of the admitted evidence and the permitted oral testimony.
On December 16, 2015, the Judges issued their Determination of Rates and Terms. Pursuant to 17 U.S.C. 803(c)(2) and 37 CFR part 353, SoundExchange and George Johnson dba GEO Music Group (GEO) filed motions for rehearing. The Judges sought responses to the issues raised in the SoundExchange motion, but did not solicit written responses to the GEO Music motion.
Congress created the exclusive sound recordings digital performance copyright in 1995.
The Copyright Office commenced the first webcasting rate determination in November 1998. The resulting rates, published in July 2002, covered a rate period from October 1998 through December 2002.
In November 2004, Congress passed the Copyright Royalty and Distribution Reform Act of 2004 (Reform Act), which became effective in May 2005. The Reform Act established the Copyright Royalty Judges as the institutional successor to the arbitration panel program managed by the Copyright Office. The new statute continued the extant 2004 rates through 2005 to enable the newly created Copyright Royalty Judges program to initiate rate proceedings. The new statute also expanded the rate period to five years.
The Judges published the determination from their first webcasting rate proceeding, covering the period 2006 to 2010, on May 1, 2007 (
Intercollegiate Broadcasting System, Inc. (IBS) appealed the amount of the minimum fee as it applied to noncommercial webcasters. The U.S. Court of Appeals for the D.C. Circuit remanded the issue for further fact-finding.
After the Library published the
On January 5, 2009, the Judges commenced a proceeding to establish rates and terms for webcasting for the period January 1, 2011, through December 31, 2015 (
CBI's participation was limited to its defense of a proposed settlement it negotiated with SoundExchange. Under the CBI/SoundExchange agreement, the Judges were asked to adopt regulations that established a subcategory of noncommercial webcasters,
For the commercial webcaster rates, SoundExchange and Live365 each proposed a per-performance rate structure. Live365 attempted to reach a per-performance rate by way of a revenue analysis, factoring in the webcasting services' costs and a presumed 20% profit, and applying the remainder of revenue to royalties. SoundExchange approached the calculation by analyzing comparable market “benchmark” agreements, with adjustments as necessary to account for differences in the services. SoundExchange relied on interactive services rate agreements.
The
IBS appealed the
IBS appealed the Judges' remand determination on May 2, 2014. The D.C. Circuit affirmed the determination on August 11, 2015.
When the Judges commenced the present proceeding (Web IV) in January 2014, they invited all potentially affected entities to consider in the presentation of their respective cases: (1) The pros and cons of revenue-based rates, (2) the existence or propriety of price differentiation in a market in which the product (digital sound recordings) can be reproduced at a near-zero marginal cost, and (3) economic variations among buyers and sellers in the relevant market.
In the evidence presented during the hearing, the Services established a potentially meaningful dichotomy between rates they pay to Major Labels and those they pay to independent record companies (Indies). Put simply, in the marketplace, Services have agreed to pay higher royalty rates to Majors than to Indies.
The Act provides that the Judges must differentiate rates based upon differences in the webcasting services, but is less clear on whether the Judges may also establish differential rates based on differences among copyright owners as revealed by the evidence. To gain clarity on the latter issue, the Judges referred to the Register of Copyrights the novel question whether the Copyright Act permits the Judges to differentiate based on types of licensors. After careful review, the Register concluded that the Judges' question “d[id] not meet the statutory criteria for referral,” and declined to answer it.
Citing the fact that no party in the proceeding had proposed a rate structure that differentiated among licensors, the Register found that “such a structure was not understood to be a subject of litigation.”
Section 802(f)(1)(B) provides that the Register's timely decision of a novel question is binding on the Judges. Because the Register has
Nevertheless, the Judges acknowledge that interpretation of the evidence out of context and without adequate input of the parties would be capricious. Moreover, reopening the proceeding at this juncture, long after the closing of the record pursuant to 37 CFR 351.12, for further evidence and argument on this issue would be improper. The Judges, therefore, do not resolve the legal issue they referred to the Register and do not set rates in this proceeding that distinguish among classes of copyright owners.
In accordance with the statutory direction to “distinguish among the different types of eligible nonsubscription transmission services,” 17 U.S.C. 114(f)(2)(A), the Judges (and the Librarian of Congress before them) have recognized noncommercial webcasters as a separate rate category from commercial webcasters in prior proceedings.
The record in the instant proceeding demonstrates some of the reasons why, in a hypothetical marketplace, a noncommercial webcaster's willingness to pay for sound recordings would be lower than a commercial webcaster's willingness to pay. For example, a noncommercial religious broadcaster that streams a simulcast of its broadcasts is prohibited under FCC regulations from selling advertising.
Indeed, the NRBNMLC and SoundExchange both proposed that the Judges adopt a different rate structure for noncommercial webcasters than for commercial webcasters, which suggests to the Judges that there is continued support in the marketplace for a different rate structure for commercial and noncommercial webcasters.
Therefore, for all of the foregoing reasons, and in accordance with the Judges' reasoning from
The NAB participated in this proceeding on behalf of its member terrestrial radio stations that simulcast over-the-air broadcasts on the Internet. iHeartMedia (iHeart) also owns and operates terrestrial broadcasting stations that simulcast, in whole or in large part, their over-the-air programming. In this proceeding, the Judges focus solely on the Internet transmissions of these broadcasters.
The NAB argues that simulcasting is different from other forms of commercial webcasting. Given these purported differences, the NAB advocates for a separate (lower) rate for simulcasters than for other commercial webcasters. The NAB avers that simulcasting constitutes a distinct submarket in which buyers and sellers would be willing to agree to lower royalty rates than their counterparts in the commercial webcasting market.
As the proponent of a rate structure that treats simulcasters as a separate class of webcasters, the NAB bears the burden of demonstrating not only that simulcasting differs from other forms of commercial webcasting, but also that it differs in ways that would cause willing buyers and willing sellers to agree to a lower royalty rate in the hypothetical market. As discussed below, based on the record in the current proceeding, the Judges do not believe that the NAB satisfied that burden. Therefore, the Judges do not adopt a different rate structure for simulcasters than that which applies to other commercial webcasters.
No prior rate determination has treated simulcasters differently from other webcasters. In
In
The record before us fails to persuade us that these simulcasters operate in a submarket separate from and noncompetitive with other commercial webcasters. Indeed, there is substantial evidence to the contrary in the record indicating that commercial webcasters . . . and simulcasters . . . regard each other as competitors in the marketplace.
The NAB reached a WSA settlement with SoundExchange prior to the conclusion of
In the current proceeding, the NAB presented no benchmarks in support of its rate proposal, opting instead for an alternative economic analysis.
The only agreements in the record that relate specifically to simulcasting are the NAB WSA settlement agreement and the 27 direct licenses between iHeartMedia and independent record labels (the iHeart/Indie Agreements). The NAB settlement (which the NAB repudiates as a benchmark) does not support the NAB proposal. The average of the settlement rates over the
The Judges cannot compare the iHeart/Indie rates directly to the NAB settlement rate because they do not employ a per-performance royalty rate. Instead those agreements set royalties at the record company's pro-rata share of [REDACTED]% of [REDACTED].
In lieu of quantitative benchmarks, the NAB offers several qualitative arguments why willing buyers and sellers would agree to lower simulcasting rates. Each argument proceeds from two basic premises: (1) The programming content on a simulcast stream is the same as programming content on terrestrial radio; and (2) terrestrial radio is fundamentally different from music services.
Radio broadcasters, which are licensed and regulated by the Federal Communications Commission (FCC), are legally required to act in the public interest.
The NAB's witnesses testified persuasively that the public interest requirement is a key consideration for radio broadcasters as they conduct their business.
NAB witnesses testified that radio broadcasters focus on their local market both in their terrestrial broadcasts and in their simulcast streams. They attribute this local focus to their legal obligations under FCC regulations, 5/20/15 Tr. at 5075 (Newberry), to the needs of their advertisers to reach customers proximate to their places of business,
The NAB stresses the role of on-air personalities, news, weather, and other non-music content in cultivating the loyalty of radio listeners and distinguishing a radio station from its competitors. Once again, the NAB ably demonstrated a distinction between simulcasting and other webcasting, but failed to articulate why that distinction supports differential royalty rates for simulcasters.
The NAB cites a survey conducted by Professor Dominique Hanssens that concluded that 12.2% of the value that simulcast listeners derive from listening to music-formatted stations is attributable to “hosts, DJs, and other on-air personalities.” NAB Ex. 4012 ¶ 62, App. 8 (Hanssens WRT); NAB Ex. 4015 ¶ 67, Table 5 (Katz AWRT). The NAB presents no evidence, however, that the on-air time consumed by on-air personalities exceeds, on a percentage basis, the value that listeners attribute to them. By including non-music content in their transmissions, simulcasters reduce the number of performances of recorded music, thus reducing their royalty obligation under a per-performance rate structure. The NAB failed to present any evidence that the value of non-music content is not fully accounted for in this reduction of royalties.
The NAB argues that simulcasters should pay a lower royalty rate in recognition of the fact that simulcast transmissions are the least interactive form of webcasting. The NAB contends that three SoundExchange fact witnesses—Dennis Kooker, Raymond Hair, and Aaron Harrison—conceded as much in their testimony and pretrial depositions. NAB PFF ¶¶ 114-118.
Dennis Kooker, President, Global Digital Business at Sony Music Entertainment, testified that
Even accepting Mr. Kooker's testimony at face value,
In his hearing testimony, Raymond Hair, International President of the American Federation of Musicians, confirmed that he had previously expressed
The strongest evidence the NAB offers on this point is Aaron Harrison's testimony. Mr. Harrison, Senior Vice President, Business and Legal Affairs of UMG Recordings, agreed with the statement “the higher the level of interactivity, the higher the rate” because “higher levels of interactivity are more substitutional than less on-demand.” 4/30/15 Tr. at 1101 (Harrison). Mr. Harrison also agreed that “simulcast is the least substitutional.”
As a record company executive, Mr. Harrison's testimony provides some evidence that record companies would be willing to accept lower royalties from services that are less interactive, because those services are less likely to displace sales of sound recordings. The probative value of his evidence in determining whether a differential rate is justified for simulcasters is limited, however. First, Mr. Harrison was responding to a question posed in the abstract, rather than identifying specific transactions that he had witnessed or in which he had participated. Second, Mr. Harrison stated that he was aware of no empirical data on the subject, and was merely testifying as to his “perception from being in the industry.”
Nevertheless, Mr. Harrison's testimony provides little support for the NAB's assertion that simulcasters generally should be entitled to pay lower royalty rates than other commercial webcasters. While the NAB posits that simulcasting is less interactive than custom webcasting, it has not established (or attempted to establish) that simulcasting as a rule is materially less interactive than any other form of non-custom, noninteractive webcasting, all of which would be subject to the general commercial webcasting rates. The statutory license is available to services that offer a continuum of features, including various levels of interactivity, which are offered in a manner consistent with the license. On the record before them, the Judges find little support for attempting to parse the levels of interactivity that the various statutory services offer to try to cobble together a customized rate structure among categories of commercial webcasters based solely on statutorily permissible levels of interactivity.
The record of this proceeding is replete with statements concerning the promotional value of terrestrial radio play for introducing new artists and new songs to the public and stimulating sales of sound recordings.
The consensus breaks down, however, when it comes to the promotional effect of webcasting, including simulcasting. The NAB offers a somewhat tautological argument: Simulcasting is, by definition, simultaneous retransmission of the content of a terrestrial radio broadcast over the Internet; it is, therefore, the same as radio; therefore, it must have the same promotional impact as terrestrial radio. NAB PFF ¶¶ 107-113;
As SoundExchange points out, there are a number of differences between terrestrial radio and simulcasting. For example, terrestrial radio broadcasts are (as the NAB stresses) locally-focused; simulcasts, by contrast, can be accessed throughout the country or even overseas.
These differences may affect listening habits in a way that diminishes the promotional effect of simulcasting. This is supported by uncontroverted evidence that radio advertisers are generally unwilling to pay to promote their products and services on simulcast streams,
In short, there is no empirical evidence in the record that simulcasting is promotional to the same degree as terrestrial radio, and the narrative the NAB puts forward to support that proposition is flawed at best. The Judges need not, however, decide that particular question in order to determine whether simulcasters should receive a discounted rate. Whether or not simulcasting is as promotional as terrestrial radio simply is not the relevant question. The relevant questions are (1) whether simulcasting is
The licensee services introduced two studies in this proceeding to demonstrate empirically that statutory webcasting is promotional. Pandora presented a study by Dr. Stephen McBride that examined the effect on sales of particular albums (in the case of new music) or songs (in the case of catalog material) in particular geographic regions if Pandora did not play that music in that region.
Dr. McBride's study concluded that Pandora has a positive effect on music sales.
Dr. Kendall's study compares the promotional effect of interactive and noninteractive streaming services, finding that noninteractive services have a greater promotional effect.
The Judges are well aware of SoundExchange's criticisms of these two studies. However, for purposes of assessing the strength of the NAB's argument for a separate rate for simulcasters, it suffices to note that these studies do not even purport to answer the central question whether simulcasting has a greater promotional effect than other forms of commercial webcasting. In conclusion, the record does not support a separate rate for simulcasters on the basis of any purported promotional effect simulcasting may have.
Simulcasters and other commercial webcasters compete for listeners. The record shows that Pandora, the largest commercial webcasting service, regards iHeartRadio, one of the largest services that aggregates simulcast streams (as well as providing a custom streaming service), as a competitor, and vice versa.
The NAB proposes to define “broadcast retransmissions” (the term used to denote simulcasts in the Judges' regulations) as follows:
Broadcast Retransmissions means transmissions made by or on behalf of a Broadcaster over the Internet, wireless data networks, or other similar transmission facilities that are primarily retransmissions of terrestrial over-the-air broadcast programming transmitted by the Broadcaster through its AM or FM radio station, including transmissions containing (1) substitute advertisements; (2) other programming substituted for programming for which requisite licenses or clearances to transmit over the Internet, wireless data networks, or such other transmission facilities have not been obtained, (3) substituted programming that does not contain Performances licensed under 17 U.S.C. 112(e) and 114, and; (4) occasional substitution of other programming that does not change the character of the content of the transmission.
iHeartMedia proposes to amend the current definition of “broadcast retransmission” in 37 CFR 380.11 by adding:
[A] Broadcast Retransmission does not cease to be a Broadcast Retransmission because the Broadcaster has replaced programming in its retransmission of the radio broadcast, so long as a majority of the programming in any given hour of the radio broadcast has not been replaced.
Both proposed definitions would permit the substitution of substantial portions of the content of a broadcast before retransmitting it over the Internet. [REDACTED], in fact, has already developed and deployed [REDACTED] to accomplish this substitution more easily.
Based on the record in the current proceeding, the Judges do not find that a separate rate category for simulcasters is warranted. The NAB's arguments in favor of a separate rate category for simulcasters lack support in the record, or are otherwise unpersuasive. The bulk of relevant evidence in the record persuades the Judges that simulcasters and other commercial webcasters compete in the same submarket and therefore should be subject to the same rate. Granting simulcasters differential royalty treatment would distort competition in this submarket, promoting one business model at the expense of others.
In their notice commencing this proceeding, the Judges inquired about price differentiation in the market and the desirability of using a percentage-of-revenue rate structure
In support of its proposed greater-of rate structure, SoundExchange makes the following arguments.
• According to Dr. Daniel Rubinfeld and Dr. Thomas Lys (two SoundExchange economic expert witness), willing buyers and willing sellers have demonstrated a “revealed preference” for a greater-of rate structure, as evidenced by the adoption of such rates in the market.
• A greater-of structure provides positive economic efficiencies that benefit licensees as well as licensors. 5/5/15 Tr. 1756-58 (Rubinfeld).
• In particular, the greater-of structure provides reasonable compensation to the record companies because: (1) The per-play prong provides a guaranteed revenue stream, especially against the vicissitudes of consumer demand; and (2) the percentage-of-revenue prong allows record companies to share in any substantial returns generated by a Service. Rubinfeld CWDT ¶¶ 96; 100.
• The greater-of structure benefits the Services because the presence of the percentage-of-revenue prong, on the upside, allows for a lower per-play rate than would exist if a single-prong, per-play rate were established, and a lower per-play rate would encourage entry into the market by new services. Rubinfeld CWDT ¶ 95.
• The greater-of structure would enable a beneficial form of price discrimination. All else being equal, services facing relatively low price elasticities (facing more inelastic demand) would be more likely to charge higher prices, earn greater revenues and thus trigger the percentage-of-revenue prong. Conversely, services facing relatively high price elasticities (facing more elastic demand) would be more likely to charge lower prices, generate lower revenues and therefore pay royalties on the per-play basis. Rubinfeld CWDT ¶ 112.
[REDACTED]'s agreements with Universal, Warner, and Sony for [REDACTED] Service, which purportedly does not have on-demand functionality, has a greater-of structure with percentage-of-revenue shares of between [REDACTED]%-[REDACTED]% paid by the labels.
[REDACTED]'s agreements with Universal, Sony, and Warner for [REDACTED] streaming service, which allegedly does not have on-demand functionality, has a greater-of structure with a pro-rata share of [REDACTED]% of [REDACTED] premium net revenue.
[REDACTED]'s free radio service has a percentage-of-revenue prong in its agreement with [REDACTED] for a pro-rata payment of [REDACTED]% of revenue.
The Services that oppose the greater-of structure in principle argue
A further economic deficiency in this two-prong approach, according to the opposing Services, is that it utilizes a percentage of
According to the opposing Services, forty-two percent of the Majors' contracts examined by Dr. Rubinfeld
The opposing Services also note that the agreements entered into by [REDACTED] and [REDACTED], relied upon by Dr. Rubinfeld, were negotiated as parts of overall interactive agreements with their record company counterparties, and the specific services within those agreements upon which Dr. Rubinfeld relies have extra-statutory interactive functionality.
The opposing Services point out that the parties to the other agreements relied upon by Dr. Rubinfeld did not demonstrate an expectation that the revenue prong of the greater-of formula would ever be triggered (given the relative levels of the per-play and revenue percentage prongs).
• There is no evidence that [REDACTED] has paid royalties under
• [REDACTED] has not paid royalties under the percentage-of-revenue prong of its agreement with [REDACTED]. 6/1/15 Tr. 6896-97 (Lexton).
Even assuming that a percentage-of-revenue prong should be included in a greater-of rate structure, the Services (
First, as with his per-play proposal, Dr. Rubinfeld bases his percentage-of-revenue analysis entirely on the unsupported and economically improper
Second, the Services assert that SoundExchange's reliance on evidence that the Majors were able to extract similar supra-competitive rates from a handful of services that are not fully on-demand fails to support an importation of the 55% revenue rate into a fully and effectively competitive noninteractive market. Pandora's RPFF ¶ 227 (responding to SX PFF ¶¶ 425-430).
Third, the Services argue that Dr. Rubinfeld inexplicably ignored an agreement between Slacker and Warner for Slacker's
The Services further note that the [REDACTED] revenue-sharing provision relied on by SoundExchange is not for “[REDACTED]'s free radio service,” but rather applies only to two premium subscription services and specifically excludes [REDACTED]'s free offerings.
Fourth, the Services point out that Dr. Rubinfeld ignored the percent-of-revenue levels in the Pandora/Merlin Agreement and the 27 agreements between [REDACTED] and independent labels as they related to custom (Pureplay) webcasting. Among those agreements, all but one contained an alternative greater-of prong with a [REDACTED]% of revenue rate, far less than Dr. Rubinfeld's proposed 55% rate.
The Judges reject the proposals by SoundExchange and by Pandora that the statutory rate should contain a greater-of structure. Rather, the Judges find that the statutory rate should continue to be set on a per-play basis for commercial webcasters. The Judges reach this conclusion for several reasons, any one of which the Judges find to be sufficient to reject the greater-of approach with a percentage-of-revenue prong.
The Judges first note that none of the percentage-of-revenue prongs in the greater-of agreements in the record has been triggered, which may suggest that the parties to those agreements viewed the per-play rate as the rate term that would most likely apply for the length of the agreement.
Additionally, the agreements, or portions of agreements, relied upon by SoundExchange in support of a greater of rate structure, are not contained within the benchmarks relied on by SoundExchange. SoundExchange, through Dr. Rubinfeld, looked at agreements
Further, for its part Pandora pointed to the 25% revenue rate from the Pandora/Merlin Agreement to support a greater of rate structure. Unlike the steered rate provision in the Pandora/Merlin Agreement, however, the 25% of revenue prong was nothing other than a figurative “cut and paste” of the Pureplay percentage rate. As such, it reveals nothing about whether the parties in the marketplace would agree to include such a prong in an
Relatedly, SoundExchange's rationale in support of a greater of structure that record companies should share in the upside if the Services monetize their models at a faster rate is wholly unconvincing. Absent proof that the per-play prong had been set too low, there is no justification for assuming that the record companies should share in that monetization through a percentage-of-revenue prong in the rate structure.
Only SoundExchange and Pandora proposed a two-prong approach, and, as discussed above, the Judges find their reasons in support of such a structure unpersuasive. Moreover, other parties raised numerous, valid objections to the use of a greater-of structure with a percent-of-revenue prong.
Finally, by maintaining the statutory rate as a per-play rate, the Judges are acting in a manner consistent with prior decisions, consistent with 17 U.S.C. 803(a)(1). Although new and persuasive evidence could cause the Judges in future proceedings to consider a greater-of rate structure and a percent-of-revenue rate, no such evidence has been provided to the Judges in this proceeding.
For these reasons, the Judges reject the two-pronged rate proposals proposed by SoundExchange and Pandora, and shall continue the current practice of setting the statutory webcasting rates on a per-play basis.
The Act provides, among other things, that the Judges base their hypothetical marketplace rates on “economic, competitive[,] and programming information” that the parties present,
As set forth in this determination,
The parties' mutual awareness reconfirms the Judges' earlier conclusion that the promotion and substitution effects on royalty rates are “baked in” to a negotiated license rate. To the extent the Judges adopt a rate based on benchmark evidence, it is not necessary to make additional adjustments to benchmarks to reflect the promotion and substitution factors. The Judges hold in this determination, as they have held consistently in the past, that the use of benchmarks “bakes-in” the contracting parties' expectations regarding the promotional and substitutional effects of the agreement. For the noninteractive benchmarks upon which the Judges rely, this long-standing position to deem substitution and promotion effects as incorporated into the agreements appears to be fully applicable.
SoundExchange disagrees, however, and points, for example, to testimony from Charlie Lexton of Merlin who stated that Merlin never considered the promotional or substitutional effects when agreeing to the terms of the Pandora/Merlin Agreement. 6/1/15 Tr. 6910 (Lexton). The Judges find that such testimony is not credible and not sufficient to support abandonment by the Judges of their long-standing treatment of promotional and substitutional issues. Indeed, the fact that Merlin arguably was so cavalier regarding the impact of the Pandora/Merlin Agreement on the positive promotional effects or the negative substitutional effects (to interactive streaming, download sales, and other revenue channels) implies that Merlin either understood the net value of these factors to be positive or, at worst, neutral. Apparently, SoundExchange infers: “This is not to say that [Merlin] did not value those terms—of course it did, but there was no precise calibration of the negotiated rate to Merlin's view of the promotional and substitutional impact of the deal.” SX PFF ¶ 1101. It strains credulity to think that Merlin was oblivious to the potential promotional and substitutional effects of the Pandora/Merlin Agreement, yet proceeded with the deal on unaltered terms.
Additionally, the Judges reject the argument, advanced by SoundExchange, that the Pandora/Merlin and iHeart/Warner Agreements are too new and untested to support the longstanding understanding that substitution and promotional effects are “baked in” to benchmark agreements. An important aspect of the benchmarking approach is
The “baked-in” aspect of promotional and substitutional effects does not address the issue of whether there is a difference between the promotional/substitutional effects of interactive services, on the one hand, and noninteractive services, on the other. To the extent the Judges rely on SoundExchange's interactive benchmark to set statutory rates in the noninteractive market, the Judges must identify and consider any difference in the promotional/substitutional effects between these markets to determine whether to adjust the interactive benchmark rate.
These potential promotional/substitutional effects hypothetically could occur in two different ways. First, the availability of noninteractive services could cause listeners to substitute noninteractive listening at the expense of interactive services. Second, noninteractive services could substitute for, or promote less, the sale of sound recordings through downloads or otherwise. To address these issues, the parties rely on expert witness testimony and on the observational and anecdotal testimony of industry witnesses. The Judges find the lay testimony to be unhelpful and essentially self-serving. Rather, the Judges find this issue to be technical in nature, and consider the expert testimony, discussed below, to be the type of evidence that has the potential to identify whether such differences exist. SoundExchange relied upon the survey work undertaken by Sarah Butler, a Vice President at NERA Economic Consulting. The Services' position was supported by the survey work of Larry Rosin, President of Edison Research.
Ms. Butler, a survey expert, designed and constructed a consumer survey to identify the types of music listening Pandora and iHeart substituted for, in the opinion of listeners. SX Ex. 5 at 3. Ms. Butler gathered information from on-line survey respondents on age, gender, and familiarity with different types of music listening formats. She then defined the relevant population as comprising those individuals who reported themselves as currently using iHeart or Pandora. For listeners who reported using both of these services, Ms. Butler testified that she assigned them to either the iHeart or the Pandora group.
Survey respondents were asked two substantive questions relating to each service. The first question asked:
Imagine you could no longer listen to music on iHeart [or Pandora]. Which of the following statements represents what you would be most likely to do?
The second question asked respondents who answered the first question by stating they would find a substitute for the music they listened to on either Pandora or iHeart:
Which of the following, if any, would be your most preferred substitute for iHeart [Pandora]?
Ms. Butler's survey found that for Pandora users, 43.3% would listen to one of the following services: Spotify (19.7%), iTunes Radio (9.7%), Amazon and Rhapsody (about 4% each), Google Play and Slacker (about 2% each), and Beats and Rdio (about 1% each).
According to SoundExchange, these results show that interactive services are common, if not predominant, substitutes for noninteractive services, and that listeners would turn to such interactive services in a hypothetical world in which no statutory noninteractive services were available. SX PFF ¶¶ 1130-1131.
The Judges have evaluated Ms. Butler's survey and the criticisms by the Services, and the Judges find that there are three significant problems with Ms. Butler's survey that preclude its usefulness in attempting to demonstrate that noninteractive statutory services substitute for interactive services. Any one of these problems, standing alone, is sufficient to preclude the Judges' reliance on Ms. Butler's survey.
First, Ms. Butler's survey fails even to attempt to measure listeners' willingness to pay (WTP) for different services.
Second, Ms. Butler did not select her survey respondents in a random manner, and therefore had no ability to calculate margins of error or confidence intervals for her results.
Third, Ms. Butler intentionally assigned virtually all respondents who reported listening to both Pandora
Accordingly, the Judges cannot and do not rely on Ms. Butler's survey results.
Mr. Rosin, on whose survey the Services rely, conducted his survey in a manner consistent with the standards and code of ethics of the American Association for Public Opinion Research, a major survey research standards organization. PAN Ex 5021 at 5 n.2. (Rosin WRT). Specifically, Mr. Rosin conducted a national telephone survey of Americans 13 years of age and older. Respondents were selected randomly, and 2,006 interviews were conducted via landlines and cell phones. The margin of error for his results was +/−2%, with a confidence interval of 95%. Rosin WRT at 5, 7.
The responses to Mr. Rosin's survey revealed,
• only 1% to 1.6% of noninteractive users reported that their listening was replacing listening on interactive services;
• only 3.8% of survey respondents would subscribe to pay for an interactive service;
• only 2% of survey respondents were “very likely” to pay the market monthly subscription rate of $9.99 for an interactive service, and only 7% were “somewhat likely” to subscribe at this price point—91% were “not at all
Based upon these findings, Mr. Rosin concluded that:
1. Most consumers are unwilling to pay monthly subscription fees for access to streaming services.
2. Noninteractive services like Pandora and iHeart are not close substitutes for interactive on-demand services such as Spotify.
3. Only a small market exists for paid (subscription) services.
4. Listeners to Pandora would not otherwise be listening to interactive services.
The Judges find Mr. Rosin's
The Judges reject the additional criticism by SoundExchange that Mr. Rosin should not have presented specific price points to respondents, but rather should have asked if they were willing to pay a “small fee” for interactive subscriptions. Such a vague phrase would be less informative, and more subjective, than particular price points. The Judges also reject the criticism that Mr. Rosin should not have indicated that an alternative to noninteractive services was to listen to “free” FM radio and that another alternative was to “pay” for a subscription to an interactive service, because interactive services do offer “freemium” subscriptions, which begin as free subscriptions subject to a conversion option. The Judges find that Mr. Rosin's language meaningfully reinforces the different pricing and pricing strategies that exist in the market, because FM radio
The Judges take note of SoundExchange's criticism of Mr. Rosin's decision not to rotate one of his multiple choice answers to the question of what a listener would do if no free streaming services existed.
Finally, the Judges do not agree with SoundExchange's criticism that Mr. Rosin's survey is deficient because he failed to describe in sufficient detail the features offered by a hypothetical on-demand interactive subscription service in one of his questions.
Turning to the question of whether there is a difference between the substitution or promotion effects of interactive versus noninteractive services with regard to
iHeart relied upon the expert testimony of Dr. Todd Kendall, who attempted to analyze the effect of listening to online streaming on music purchases, by reviewing data from 10,000 personal computers over a six month period. IHM Ex. 3148 ¶ 8 (Kendall WRT). Dr. Kendall used three categories of monthly data for each sample computer: (1) The amount of time spent listening to music; (2) the number of digital music purchases made on Amazon and iTunes; and (3) the amount of time spent visiting music sites, such as
He then compared the relative promotional effect of fourteen on-demand services, including Spotify, with the relative promotional effect of nine Internet radio services, including Pandora and iHeart. Kendall WRT ¶¶ 9, 15-17. Dr. Kendall found that a 10% increase in listening to Internet radio was associated with a statistically significant 0.070% increase in music purchasing.
There are several important flaws in Dr. Kendall's work, however, that render it insufficient for the Judges to conclude that Dr. Rubinfeld's interactive benchmark should be reduced to reflect a supposed lower promotional effect. Most importantly, Dr. Kendall's conclusion is premised on his finding that on the computers he analyzed individuals spent
SoundExchange demonstrated in its cross-examination of Dr. Kendall that this extreme multiple resulted from the different methods of recording listening
Simply put, these differences in measuring listening time alone skew Dr. Kendall's analysis and results. Accordingly, the Judges cannot conclude from his testimony and analysis that noninteractive services are more promotional of music sales than interactive services.
With regard to the relative promotional or substitutional effects of interactive versus noninteractive streaming services on music sales, SoundExchange relies on the testimony of Dr. David Blackburn. Unlike Dr. Kendall, he did not attempt to relate the amount of time spent listening to these services to increases in purchasing music. Rather, Dr. Blackburn attempted to determine whether there was any meaningful promotional or substitution effect on music sales as between those who use the two different types of services.
In this instance, the particulars of the study are less important than the conclusion. Dr. Blackburn opined that, based on his analysis, “neither interactive nor non-interactive services have a statistically significant promotional impact on users' propensity to purchase digital tracks.” SX Ex. 24 ¶ 42 (Blackburn WRT). Because Dr. Blackburn is a SoundExchange witness, and because the point of the present discussion is to determine whether an interactive benchmark rate must be lowered or raised to reflect such differences, his conclusion fails to support any change in SoundExchange's interactive benchmark for promotional or substitutional effects.
Finally, the Judges take note of Pandora's “Music Sales Experiments” conducted by its Senior Scientist, Economics, Dr. Stephan McBride. The purpose of that experiment was “to test whether performance of sound recordings on Pandora have a positive or negative impact on sales of those sound recordings.” PAN Ex. 5020 ¶ 23 (McBride WDT). However, whether or not Pandora has a net promotional or substitutional effect does not address the issue of whether that net effect is different from the net promotional/substitutional effect of interactive services.
Rather, when relying on benchmarks, the Judges deem the benchmark agreements of rational actors to include an implicit understanding of the promotional and substitutional effects of their transaction. Therefore, Dr. McBride's conclusions, as well as Dr. Blackburn's criticisms of those “Music Sales Experiments,” do not affect the Judges' rate determination.
The Services aver that the rates set in this proceeding must be sufficiently
The Judges find that they do not need to relate the rates set in this proceeding directly to the parties' proposed business models. Rather, the Judges' adoption of the benchmark method of determining rates obviates the need to: (1) Analyze whether the record companies' costs require a particular rate to allow them to obtain an appropriate ROI; and (2) protect particular noninteractive services whose business models might require a low enough rate to sustain their survival and/or growth. Benchmarks based on marketplace agreements, by their very nature, reflect the parties' need for rates that allow them to project a sufficient ROI and enable them to implement their respective business models.
As with the promotional and substitutional impact of the rates, the Judges conclude that the benchmarking process “bakes-in” (internalizes) these necessary elements, given the assumed rational, maximizing nature of sophisticated business entities. Moreover, even if the Judges were to attempt to ascertain whether a particular ROI could be met by a given rate, or whether a particular business model could be sustained, the present record would preclude such an analysis. The Judges would require much more detailed financial and economic data regarding the parties' costs and revenues before attempting to make such determinations.
Further, as the Judges have previously held, the statute neither requires nor permits the Judges to protect any given business model proposed or adopted by a market participant.
The parties assert that the benchmarks that are adverse to their positions are compromised by the fact that they were set in the “shadow” of the statutory rate.
The first purported shadow is cast by the
Dr. Shapiro argues that the statutory shadow not only exceeds the marketplace rate, but also acts like a “focal point,” or “magnet,” pulling a freely negotiated rate higher than it would be in the absence of the statutory shadow. Shapiro WDT at 36-37. However, neither Dr. Shapiro nor any other expert provides a sufficiently detailed explanation as to how the statutory rate would pull up a below-statute consensual rate that is otherwise mutually beneficial. Rather, the experts who advance this variant of the shadow argument simply note the existence of a “focal point,” “magnet” or “anchor” theory in the economic literature and then posit that such an effect is present in the noninteractive market—without making a sufficient connection between theory and evidence. Indeed, Dr. Shapiro candidly acknowledged that the focal point/magnet/anchor hypothesis is not an “ironclad” economic law.
On behalf of SoundExchange, Dr. Talley asserts that the existing statutory rate casts a shadow so dark as to obscure entirely evidence of consensual transactions that would have been consummated in the noninteractive space, but for the statutory rate. More particularly, Dr. Talley notes that any pairing of willing licensors and licensees (“dyads” in Dr. Talley's parlance) in which the licensee's WTP was greater than the statutory rate, and greater than or equal to a licensor's “willingness to accept” (WTA) (also above the statutory rate), would not consummate an agreement at a consensual rate, because the buyer would always default to the lower statutory rate. SX Ex. 19 at 58 (Talley WRT) (Concluding “in an economic environment most relevant to this setting, a statutory licensing option can crowd out negotiated transactions for relatively high-valuing buyer-seller dyads while not affecting other, low-valuing dyads. . . . [T]his crowding out phenomenon can generate downward statistical bias, leaving behind only a subset of negotiated deals involving buyers and sellers whose valuations . . . reflect[ ] prices which serve as poor benchmarks for estimating the price [to which] willing buyers and sellers would agree.)
The Services counter that, although the logic of Dr. Talley's point may be correct, Dr. Talley's analysis is purely theoretical and he did not examine the evidence to determine whether his analysis was supported by the facts. In particular, the Services criticize Dr. Talley's “shadow” argument because he assumes that the “missing dyads” would reflect a significantly different WTP and WTA than those of the parties who entered into agreements (
Dr. Talley suggests though that Dr. Rubinfeld's interactive benchmark may approximate the “unseen” noninteractive transactions because it is affected less by the shadow of the statutory rate.
Relatedly, the Services also criticize Dr. Talley's argument because it fails to note the potential steering, “competitive dynamics”, or other interactions that would cause dyads to cluster closely. 5/19/15 Tr. 4660-61 (Shapiro).
On balance, the Judges find Dr. Talley's criticism, albeit rational and hypothetically correct, too untethered from the facts to be predictive or useful in adjusting for the supposed shadow of the existing statutory rate. The Services' criticisms are likewise speculative, but that simply underscores the factual indeterminacy of Dr. Talley's argument. Further, Dr. Talley's point appears to be a back-door way to question both the applicability of the benchmarks in the noninteractive market, as well as the benchmarking process itself. However, the Judges have found that the Pandora/Merlin Agreement and the iHeart/Warner Agreement to be sufficiently representative benchmarks (and have found that Dr. Rubinfeld's benchmark analysis is likewise representative)
The second shadow identified by the parties is cast by the statutory rate yet to be established in this proceeding. The record is replete with evidence that the parties entered into various transactions with the knowledge, if not the intent, that such agreements could be used as evidentiary benchmarks in this proceeding.
The Judges agree with a particular criticism made by iHeart of the shadow argument asserted by SoundExchange: In the absence of the statutory shadow, the antitrust policy toward the noninteractive streaming market could well be different.
Thus, to the extent the “shadow of antitrust law” has receded, it was counterbalanced by the “shadow of the statutory rate.” Accordingly, the presence of the so-called statutory shadow appears to reflect a trade-off and a second-best solution, rather than a distortion of an effectively competitive marketplace.
Additionally, the Judges' consideration of the Pandora/Merlin Agreement and the iHeart/Warner Agreement as appropriate benchmarks for the ad-supported (free-to-the-listener) market obviates the supposed “shadow” problem. In both benchmarks, the rate is
Further, in the
Finally, the Judges emphasize that they find the “shadow” criticism to be both nihilistic and self-contradictory. If the “shadow” infects all benchmarks so as to disqualify that method of rate-setting, then the parties would need to adjust or abandon their benchmarking strategies and develop new bases for analysis. That could mean the wholesale abandonment of benchmarking, to be replaced by a valuation approach yet to be applied and accepted in these proceedings.
The statutory language that includes the “willing buyer/willing seller language also commands that “[i]n determining such rates . . . the . . . Judges “
SoundExchange and the Services disagree as to whether § 114(f)(2)(B) and prior decisions require the Judges to set a rate that reflects an “
The Services construe § 114(f)(2)(B) as explicitly requiring the Judges to utilize competitive information introduced in evidence to set a marketplace rate that reflects “effective competition,” and to adjust an otherwise appropriate benchmark in order to reflect “effective competition.” In support of this position, the Services make several principal arguments.
The Services assert that prior decisional law constitutes precedent that requires the Judges to set rates that are “effectively competitive.” They point to the most recent determination by the Judges, the
The NAB emphasizes that in the present proceeding the Judges must follow these decisions because 17 U.S.C. 803(a)(1) expressly requires the Judges to act in accordance with the Librarian of Congress's interpretation. NAB PFFCL ¶ 689. The Services also rely on a decision by the D.C. Circuit as persuasive, if not binding precedent, because it states that § 114(f)(2)(B) “does not require that the market assumed by the Judges achieve
The Services further argue that the legislative history of Section 114 reflects a Congressional intention for rates to be set at a level that avoids “higher-than-competitive prices.”
The Services also note that, in comparable circumstances, courts
Finally, the NAB asserts that the statutory histories of the DPRA and the DMCA reflect a Congressional intent to create a three-tier performance right/rate structure, whereby: (1) Terrestrial radio continues to enjoy free access to sound recordings; (2) interactive services must pay market-negotiated royalties in order to play sound recordings on demand; and (3) noninteractive services, falling between these two extremes, cannot play sound recordings for free, shall not to be subjected to the purely market rates paid by on-demand interactive services and, instead, shall pay intermediate rates set by the Judges (formerly the CARP arbitrators subject to Librarian review).
On the other hand, SoundExchange construes § 114(f)(2)(B) as precluding the Judges from adjusting an otherwise appropriate benchmark in order to reflect “effective competition.” In support of this position, SoundExchange makes several principal arguments.
First, SoundExchange emphasizes that the words “effective competition” or the like are not included within the statute. Thus, SoundExchange maintains that the plain language of the statute clearly does not include such a standard. SX PCOL ¶ 21.
Second, SoundExchange relies upon a statement by the CARP in
Third, SoundExchange argues that the “willing buyer/willing seller” standard is essentially a restatement of the traditional “fair market value” test.
Fourth, SoundExchange argues that statutory enactments of the fair market value test and its willing buyer/willing seller component constitute adoptions of a recognized common law definition of the test. Therefore, the common law meaning should prevail because it is a “settled principle of statutory construction that,
Fifth, SoundExchange points out that, when Congress intends a legal standard to be based on “effective competition,” it makes the point expressly and explicitly defines “effective competition.”
Sixth, SoundExchange characterizes the references to effective competition in
Seventh, SoundExchange asserts that any attempt to apply an “effective competition” requirement would render the statutory test indeterminate, unworkable, and vague. SoundExchange notes that the Services' economic experts acknowledged the absence of a “bright line” separating a market that is “effectively competitive” from one that is not. Moreover, SoundExchange asserts that there is no evidence or testimony setting forth what the level of rates would need to be in SoundExchange's proffered interactive benchmark market, in order for it to equate with “effectively competitive” rates.
Having considered the issue and the parties' positions, the Judges conclude that they are required by law to set a rate that reflects a market that is effectively competitive. The Judges reach this conclusion through a consideration of the plain meaning of the statute, the clear statutory purpose, applicable prior decisions, and the relevant legislative history.
The Judges' starting point is the language of the statute itself. The statute
SoundExchange invites the Judges to ignore this statutory directive and judicial command. The Judges cannot. The parties presented the Judges with voluminous evidence and testimony comprising the required “competitive information” relating to Dr. Rubinfeld's proposed interactive benchmark market, the Services' proposed noninteractive benchmarks, the noninteractive market at issue in this proceeding, and the alleged differences and similarities among them.
The Judges further conclude that, even if the directive that they “shall” consider competitive information could be construed as ambiguous, their consideration of “competitive information” is certainly a permissible, reasonable, and rational application of § 114, for a number of reasons.
First, the D.C. Circuit, the Librarian, the Judges, and the CARP have all acknowledged that the Judges can and should determine whether the proffered rates reflect a sufficiently competitive market,
The D.C. Circuit has held that this statutory section does not oblige the Judges to set rates by assuming a market that achieves “metaphysical perfection and competitiveness.”
It is noteworthy that SoundExchange has not characterized the
A holding consists of those propositions along the chosen decisional path or paths of reasoning that (1) are actually decided, (2) are based upon the facts of the case, and (3) lead to the judgment. If not a holding, a proposition stated in a case counts as
M. Abramowicz and M. Stearns,
In
An oligopolistic marketplace rate that did approximate the monopoly rate could be inconsistent with the rate standard set forth in 17 U.S.C. 114(f)(2)(B), as that standard has been set forth by the D.C. Circuit and the Librarian of Congress. . . . [I]n this proceeding the
The parties presented no evidence from which the Judges could conclude . . . that SoundExchange necessarily wielded a level of pricing power sufficient to affect the use of the WSA Agreements as benchmarks.
Moreover, even past
Thus, the Judges conclude that they are bound to follow the prior directives that instruct them to make certain that the statutory rates they set are those that would be set in a hypothetical “effectively competitive” market. In light of this conclusion, based on the foregoing reasons, the remainder of the arguments are insufficient to alter the Judges' decision in this regard. However, in the interest of completeness, the Judges address other arguments, including those raised by the parties, that further support their conclusion.
The Judges agree that the legislative history supports the conclusion that § 114 directs the Judges to set rates that reflect the workings of a hypothetical effectively competitive market. The legislative history equates rates set under the willing buyer/willing seller standard with “reasonable rates.” As the Services note, the phrase “reasonable rates” has been construed by the rate court, in an analogous context, as “rates that would be set in a competitive market.”
The Judges are informed by the analogous use of the willing buyer/willing seller standard in eminent domain law.
The Judges are also persuaded that the structure of the Act with regard to the sound recording performance right—as it relates to terrestrial radio, noninteractive services, and interactive services—confirms the necessity of adopting an “effectively competitive” standard in the rate-setting process. Copyright owners were provided a limited performance right with regard to the use of their sound recordings by noninteractive services—something less than the purely private market-based rate for interactive use, but clearly more than the “zero rate” required from terrestrial radio. The Judges conclude that a rate that simply reflected or overemphasized either of the polar extremes would be inconsistent with the three-tier structure of the statute.
SoundExchange's arguments to the contrary are unavailing. First, the fact that the statute requires the Judges to consider “competitive information” adequately rebuts SoundExchange's contention that the statutory language does not address the issue of competitiveness. That provision, combined with the legislative history and the prior judicial and administrative pronouncements make it clear that the statutory language requires the Judges to establish rates that are effectively competitive.
Second, the Judges do not find that the traditional fair market value test permits the Judges to ignore the competitive status of the hypothetical market in which the statutory rate is established. As SoundExchange concedes in the very case law that it quotes, the common law meaning of a phrase should only prevail when construing a statute “absent contrary indications.” Here, the requirement that the Judges consider “competitive information,” the prior judicial and administrative holdings and pronouncements, and the legislative history all combine to clearly provide more than “indications” that the Judges must set reasonable rates that reflect “effective competition.”
Third, the mere fact that, in another setting (regarding the cable television industry) Congress chose to define “effective competition” hardly suggests that such an “effective competition” standard does not exist in the present case. Indeed, the absence of a definition, combined with the requirement that the Judges weigh “competitive information,” is more consistent with the idea that Congress intended to delegate discretion to the Judges to determine whether the rates they set reflected an appropriate level of competitiveness.
Finally, the Judges reject SoundExchange's assertion that there is no pre-existing “bright line” test sufficient to distinguish a rate which is “effectively competitive” from one that is not. The very essence of a competitive standard is that it suggests a continuum and differences in degree rather than in kind. Once again, the statutory charge that the Judges weigh “competitive information” indicates that the Judges are empowered to make judgments and decide whether the rates proposed adequately provide for an effective level of competition. Moreover, in the present case, the Judges were presented with highly specific facts regarding how to use the impact of steering on rate setting in order to measure and account for the “complementary oligopoly” power of the Majors that serves to prevent effective competition.
The rates proposed by the Services and SoundExchange are marked by a wide disparity. Although it is unsurprising that adverse parties would have strikingly different positions, what is surprising is that, despite these differences, the parties' positions are supported to a great extent (but not in all cases) by persuasive and logical economic analyses. Initially, this created a conundrum for the Judges, because none of these persuasive and logical economic analyses could easily be rejected.
On closer inspection, however, what became clear to the Judges was that the reason why many of these disparate economic analyses and models could all appear to be correct was that they each reflected
In a certain kingdom was a cave containing a treasure, guarded by a beast of fierce repute. The king wished to know the nature of the beast, and dispatched three of his subjects to invade the pitch darkness of the cave and report. The first returned and declared that he had felt the head of the beast, and it was toothed and maned like a lion. The second reported that he had felt the sides of the beast, and that it was winged and feathered like an eagle. The third reported that the legs of the beast were long and hoofed like a horse. A fearsome portrait of the beast was drawn up, and all were thereafter afraid to approach the cave. Of course, in reality, the cave contained a lion, an eagle, and a horse.
Another, less allegorical, way of saying this is that many of the problems that the law has had in handling expertise in the courtroom have sprung from a failure to examine the concept of expertise in appropriate taxonomic detail.
This phenomenon among experts has particular applicability to economists. As one prominent economist has recently written:
Rather than a single, specific model, economics encompasses a collection of models . . . . The diversity of models in economics is the necessary counterpart to the flexibility of the social world. Different social settings require different models. Economists are unlikely ever to uncover universal, general-purpose models. But . . . economists have a tendency to misuse their models. They are prone to mistake a model for
• Market Segmentation by WTP
Services that attract listeners who have no willingness to pay (WTP) for access to a noninteractive service, and therefore who listen mainly to ad-supported services, versus services that attract relatively more listeners who have a WTP greater than zero, and therefore can attract more subscription-based listeners.
• Market Segmentation by On-Demand Functionality
Services that meet the statutory definition of an “interactive service” and thus provide an on-demand function,
• Market Segmentation by Major or Indie
The Majors, who have the ability to negotiate relatively higher rates, versus the Indies, who have relatively less market power when negotiating rates.
• Complementary Oligopoly Power versus Oligopoly Market Structure
“Complementary oligopoly” power exercised by the Majors designed to thwart price competition and thus inconsistent with an “effectively competitive market,” versus the Majors' non-complementary oligopolistic structure not proven to be the consequence of anticompetitive acts or the cause of anticompetitive results.
• Custom Pureplay Webcasting versus Simulcasting
Custom (Pureplay) noninteractive services that play only sound recordings, versus simulcasters, who play principally (but not exclusively) the sound recordings and other materials transmitted simultaneously on a terrestrial broadcast.
The presence of such dichotomies is not particularly unusual. For example, in
SoundExchange proposes a single rate for all commercial webcasters using a greater-of structure. All commercial webcasters would pay the greater of 55% of revenue attributable to webcasting and the following per-performance rate:
In support of its proposal, SoundExchange relies principally on an analysis undertaken by one of its economic witnesses, Dr. Daniel Rubinfeld, of rates set forth in direct licenses from record companies to certain interactive streaming services.
Dr. Rubinfeld derived SoundExchange's proposed per-play rates by analyzing more than 80 agreements between interactive streaming services and record companies. Dr. Rubinfeld identified 60 such agreements that contained data on per-play royalty rates. 5/28/15 Tr. 6297 (Rubinfeld). From those 60 agreements, he selected 26 that specified minimum per-play rates. Rubinfeld CWDT ¶ 205; SX Ex. 59 (Rubinfeld CWDT, Exhibit 16a) (listing 26 interactive streaming service agreements).
According to Dr. Rubinfeld, interactive streaming service benchmarks are more probative in this statutory rate proceeding than they were in prior statutory rate proceedings due to: (1) A “convergence” in features that interactive and noninteractive streaming services offer to the end-user (“downstream”) market; and (2) greater head-to-head competition for listeners between interactive and noninteractive streaming services. Rubinfeld CWDT ¶ 21.
SoundExchange avers that the listening choices (
According to SoundExchange, the increasingly similar functionality of interactive and noninteractive streaming services has “blurred” the previous distinctions between them.
SoundExchange contends that to attract and retain listeners, interactive streaming services have moved beyond merely playing, on demand, the recordings selected by a listener, and have developed and promoted curated playlists, radio components and other lean-back methods of music delivery. Blackburn WDT ¶ 13; Wilcox WRT ¶ 25; Kooker WRT at 14; 5/13/15 Tr. 3448-50 (Herring). To support this point, SoundExchange introduced evidence and elicited testimony describing the various custom
SoundExchange asserts that “lean back” features are a significant part of the consumer listening experience on some of these services. For example, SoundExchange points out that nearly [REDACTED]% of UMG's plays on Slacker are such programmed streams, rather than the traditional on-demand plays of an interactive service. SX Ex. 25 ¶ 11 (Harrison WRT). SoundExchange notes that on Spotify, approximately [REDACTED]% of total listening to Sony's repertoire occurs through playlists created by Spotify or other third parties (
SoundExchange further asserts that listener feature convergence is occurring from the other direction as well, with
SoundExchange also points out that Sirius XM's noninteractive steaming service (“My Sirius XM”) allows listeners to move “sliders” to change the type of music played. For example, a listener can direct the service to play “more acoustic” or “more electric” within a particular genre. SX Ex. 232 at 15-21; 5/22/15 Tr. 5419-20 (Frear).
SoundExchange also notes that iHeart has developed a custom streaming service that, according to SoundExchange, makes it “very likely” that a listener who is seeking out a highly popular artist or song will “hear the exact song or songs he or she had in mind within minutes of starting the station.” Kooker WRT at 7.
SoundExchange also notes that the statutory services are developing new functionality that would allow even more listener control (while still satisfying the DMCA requirements).
• Repeat songs, re-listen to songs they've “thumbed up,” skip additional tracks, and create playlists of “thumbed up” songs, SX Ex. 1678 at 8;
• ban from stations certain artists, live tracks, instrumental recordings and tempos, SX Ex. 269 at 43; 5/13/15 Tr. 3498-3503 (Herring); and
• create stations that contain
SoundExchange notes that a prime catalyst for increased convergence between interactive and noninteractive streaming services is the trend away from desktop listening toward mobile listening. For example, SoundExchange points out that during the first quarter of 2015, 83% of the hours streamed by Pandora listeners occurred through mobile devices. 5/13/15 Tr. 3443 (Herring). SoundExchange asserts that the leading edge of this competition to “get into the car” by both noninteractive and interactive streaming services should hasten this trend. 5/8/15 Tr. 2731-32 (Shapiro). Moreover, because on-demand song selection is often incompatible with driving (absent hands-free voice controls or self-driving cars), SoundExchange opines that interactive streaming services have incentives to add “lean-back” functionality, such as Spotify's “Shuffle” service, to their mobile services. Blackburn WDT ¶ 39.
Based on the foregoing points, SoundExchange concludes that, notwithstanding the requirements noninteractive streaming services must meet to be eligible for the statutory license, statutory services are increasingly offering enhanced functionality that “come[ ] close to replicating” the on-demand listening experience of interactive streaming services. Rubinfeld CWDT ¶¶ 53-54; Blackburn WDT ¶ 9; Kooker WDT at 16. As summarized by one record company witness, statutory services now “employ sophisticated algorithms, user-interface controls, and other computer technology that allow users to communicate their preferences to the service, and the service to customize and curate programming tailored to the individual user.” Kooker WDT at 16-17.
SoundExchange concludes that “[i]t is therefore no longer just directly licensed interactive services that allow users to
SoundExchange avers that interactive services and noninteractive streaming services compete with each other for listeners. SX Ex. 269; 5/13/15 Tr. 3462 (Herring). SoundExchange contends that Pandora, iHeart, and Sirius XM are all keenly aware of the developing competition from interactive services. SoundExchange points to numerous examples in the record of this purported competition for listeners between interactive and noninteractive streaming services.
With regard to Pandora, SoundExchange cites the following evidence:
• Pandora's own internal documents confirm that interactive services “compete head-to-head for listener hours with services that operate under the statutory license,” Kooker WDT at 16;
• Pandora identifies Spotify as a “competitor” for the “consumers [it is] trying to attract to use Pandora,” SX Ex. 266 at 12; 5/13/15 Tr. 3483-84 (Herring);
• Pandora identifies as “competitor services” Spotify's Free Mobile App (described by Pandora as “enabl[ing] [a] hybrid `lean-in'/`lean-back' experience”) and Beats Music (a “[p]ure on-demand service with a novel personalization feature”), SX Ex. 266 at 15-21;
• Pandora's “Competitive Intelligence Report” details the product offerings of services like Beats, Google Play, Rdio, and Spotify, SX Ex16 52; SX Ex. 2244;
• In 2014, Pandora briefed its incoming CEO Brian McAndrews on the “[i]ncreased competition [that] exists from Apple, Google, and [other interactive] streaming services like Spotify.” SX Ex. 2367; 5/27/15 Tr. 6163-65 (Fleming-Wood); and
• Pandora identified Spotify, Rdio, Deezer, Rhapsody, Slacker, Google, and Apple as “competitors” in Pandora's survey of competitors' product strategies and business models in a “Strategic Planning Overview.” SX Ex. 263 at 23.
Similarly, with regard to iHeart, SoundExchange notes the following evidence of competition between interactive streaming services and iHeart's custom noninteractive streaming service:
• iHeart consistently identifies interactive services like [REDACTED], [REDACTED], and [REDACTED] as competitors. SX Ex. 1262 at 4-11; SX Ex. 2157 at 5.
• iHeart has monitored [REDACTED] on its “competitor tracker” since [REDACTED] first launched [REDACTED]. SX Ex. 211 at 6.
• iHeart has strategized as to how it could “match or beat [[[REDACTED]'s] experience,” and listed “major roadmap items to deal with [REDACTED].”
Finally, SoundExchange notes that Sirius XM also internally identifies interactive streaming services like [REDACTED], [REDACTED], [REDACTED], [REDACTED], and [REDACTED] as “competitors” for listeners of its noninteractive streaming service—My Sirius XM—and highlights [REDACTED] as “offer[ing] the strongest competition in terms of the quality of customization.” SX Ex.1759 at 15; 5/22/15 Tr. 5461-63 (Frear). Additionally, Sirius XM conducted a service-wide survey of “competitive listening” in which it sought input from listeners not only on streaming services like [REDACTED], [REDACTED], [REDACTED], and [REDACTED], but also on interactive streaming services like [REDACTED] and [REDACTED]. SX Ex. 237 at 26.
Based on his proffered evidence of “convergence” and “downstream competition,” Dr. Rubinfeld concluded that agreements between interactive streaming services and record companies were an appropriate foundation upon which to base a marketplace benchmark for determining rates in this proceeding. 5/15/15 Tr. 1785 (Rubinfeld).
Dr. Rubinfeld asserts that his proposed interactive streaming services benchmark satisfies the following four part-test that he contends comprises the standard that the Judges applied in the
Therefore, according to Dr. Rubinfeld, “adjustments can and should be made to account for these differences when applying the set of interactive benchmarks.”
Dr. Rubinfeld “assumed that the ratio of the average retail subscription price to the per-subscriber royalty paid by the licensee to the record label is approximately the same in both interactive and noninteractive markets.” Rubinfeld CWDT ¶ 169. This “ratio equivalency” is best presented by the following equation:
Dr. Rubinfeld calculated the interactive numerator and denominator [
More particularly, to determine his Interactive Numerator [
To determine his Interactive Denominator [
Having obtained values for [
However, Dr. Rubinfeld needed first to calculate [
Having calculated values for [
Dr. Rubinfeld attempted to confirm the reasonableness of his 2.0 interactivity adjustment by considering a different method of calculating the adjustment, undertaken by another SoundExchange expert economic witness, Dr. Daniel McFadden. Rubinfeld CWDT ¶¶ 171, 209. Dr. McFadden conducted a “conjoint survey”
Relying upon the entire sample of respondents to Dr. McFadden's survey, Dr. Rubinfeld summed the
• On the interactive side, Dr. Rubinfeld included the following attributes: (1) Unlimited skips; (2) offline listening; (3) on-demand availability (desktop and mobile); (4) mobile service; (5) playlists (from algorithms and “tastemakers”); (6) absence of advertising; and (7) catalog size between one million and twenty million).
• On the noninteractive side, Dr. Rubinfeld included these attributes but excluded the following features not offered by statutory services: (1) Unlimited skips; (2) offline listening; and (3) on-demand availability (desktop and mobile); and catalogs greater than ten million (as arguably more reflective of noninteractive catalog sizes in the market).
According to Dr. Rubinfeld, the survey results from Dr. McFadden's conjoint survey indicated an interactivity ratio of 1.90, which Dr. Rubinfeld noted was less than the 2.0 interactivity ratio calculated by Dr. Rubinfeld through his own methodology, discussed
The other differences between the interactive market and the noninteractive market that, according to Dr. Rubinfeld, required further adjustment before he could determine a per-play royalty rate based on his interactive benchmark analysis are described below.
In his analysis, Dr. Rubinfeld accounted for the fact that, under the statute, a “skip,”
In order to make an “apples-to-apples” comparison, Dr. Rubinfeld therefore corrected for these differences in royalty-bearing plays in his interactive benchmark market and the statutory noninteractive market. SX Ex. 29 ¶ 214 (Rubinfeld CWRT). Applying the foregoing factors, Dr. Rubinfeld calculated that the ratio of (i) royalty-bearing plays in his interactive benchmark market to (ii) royalty-bearing plays in the statutory noninteractive market was 1.0:1.1. Accordingly, Dr. Rubinfeld divided his per-play rate (as calculated in the prior steps,
Dr. Rubinfeld assumed that, on average, independent record companies, commonly known as Indies, (
After applying the foregoing steps and adjustments, Dr. Rubinfeld calculated that, for the year 2014 (the year for which he had and applied data), the per-play royalty rate for noninteractive services implied by the interactive benchmark equaled $0.002376, or 0.2376 cents. SX Ex. 59 (Rubinfeld CWDT Ex. 16a).
Finally, Dr. Rubinfeld determined that his proposed per-play rate should increase by a linear $0.00008 for each year in the statutory 2016-2020 period. In support of these annual increases, Dr. Rubinfeld relied upon: (1) The average $0.00008 annual increase in rates as set in
SoundExchange maintains that Dr. Rubinfeld's interactive benchmark rate reflects effective competition because
According to Dr. Talley, rates in the interactive market are constrained by two factors. First, if there is an “elastic downstream demand curve” for an input (such as a sound recording), upstream prices for that input will be constrained. Second, if the “expenditure on that input versus other inputs”—“the cost intensity of that particular input”—is proportionately significant compared to other inputs in the downstream market, the constraint on pricing in the upstream market will be more pronounced. 5/27/15 Tr. 6054-55 (Talley).
According to Dr. Talley, both of these factors are present here. First, high price elasticity exists downstream because of the threat from piracy and because of competition from other outlets, such as YouTube. Second, the variable costs associated with licenses are a very significant element of the downstream sellers' expenses. Thus, these elasticities would be passed upstream.
Dr. Talley then noted that his theoretical modeling demonstrated that such downstream competitive forces “will cause the WBWS price to be tightly clustered, reducing variations due to differences in bargaining power.” SX Ex. 19 at 35, 44-45 (Talley WRT);
Sound Exchange notes that Dr. Talley's assertions regarding the highly competitive state of the downstream market is essentially undisputed and borne out by the evidence.
SoundExchange also points to its negotiations with interactive services as evidence that the upstream interactive market is effectively competitive. Dr. Rubinfeld, described the negotiations as a “real give and take,” where the labels “have in mind a particular goal, but they have to give up something,” which is “consistent” with the “view that there's some bargaining power on the part of the services.” 5/5/15 Tr. 1863 (Rubinfeld). He further testified that the possible bargaining range would at best only reveal “something about the other party's willingness to pay or willingness to sell.”
SoundExchange offered analyses of direct licenses between record companies and several noninteractive services to corroborate its interactive benchmark analysis. These include two licenses from major record companies to Apple, Inc. (Apple) for its iTunes Radio service, and several licenses for what SoundExchange describes as noninteractive offerings by services that also offer interactive streaming.
SoundExchange presented evidence of Apple's license agreements with Warner and Sony, respectively, for Apple's iTunes Radio service. iTunes Radio is a streaming service that offers users the opportunity to listen to playlists selected by industry “tastemakers,” as well as playlists that are generated by an algorithm based upon a song or artist “seeded” by the listener (similar to Pandora's service). Dr. Rubinfeld described the iTunes Radio service as “DMCA compliant,” although he acknowledged that the rights granted to Apple are “not identical to the statutory license.” Rubinfeld CWRT, App. 2, ¶¶ 1-2.
SoundExchange offered the Apple agreements as part of its rebuttal of a number of the licensee services' criticisms of Dr. Rubinfeld's interactive benchmark analysis. Dr. Rubinfeld contended that, because the (noninteractive) Apple agreements were not susceptible to those criticisms, those criticisms would be rebutted by evidence that the royalty rates derived from the Apple agreements were roughly equivalent to those derived from the interactive benchmark analysis.
Specifically, Dr. Rubinfeld argued that the following critiques that the licensee services levied against his interactive benchmark analysis would not apply to Apple's agreements with the majors for its noninteractive service.
• The majors' repertoires are “must haves” for interactive services, enabling the majors to charge supracompetitive prices.
• “[B]ecause noninteractive services purportedly have the ability to steer listeners to sound recordings offered by independent music labels and away from majors (or away from any particular major's repertoire), record label catalogs are substitutes.”
• “[B]ecause interactive services are primarily subscription services, they have substantially higher ARPUs than noninteractive services, which are primarily ad-supported,” and would therefore pay substantially higher royalties.
Dr. Rubinfeld also offered two additional reasons why the Judges should consider the Apple agreements. First, he noted that Apple's “unique position in the marketplace” confers substantial bargaining power in its negotiations with record companies, tending to negate any argument based on a disparity of bargaining power between licensor and licensee.
SoundExchange also offered Dr. Rubinfeld's analysis of record company licenses to Beats Music's “The Sentence,” Spotify's “Shuffle” service, Rhapsody's “Unradio,” and Nokia's “MixRadio” to corroborate its interactive benchmark analysis. SoundExchange describes these services as noninteractive offerings, and concludes that the effective per-play rates in the agreements exceed the per-play rate derived from Dr. Rubinfeld's benchmark analysis of interactive service agreements.
The Services' expert economic witnesses all agreed that SoundExchange's proposed interactive benchmark would fail to establish rates that are “effectively competitive.”
The NAB's economic expert, Dr. Katz, essentially analogizes the D.C. Circuit's contrast between “metaphysical” and “effective” competition to the economists' contrast between “perfect” and `workable” competition:
The theoretical conditions of
Dr. Shapiro describes a “workably” or “effectively” competitive market as follows:
The hallmark of a workably competitive market is regular, significant competition among suppliers for the patronage of buyers. . . . A market can be workably competitive even when the products or services offered by different sellers are differentiated, so long as no single supplier has significant unilateral market power. Indeed, this is the norm for information products such as books, video programming, or software applications. Workable competition does not require marginal cost pricing or anything approaching the textbook model of perfect competition. A market can also be workably competitive even if it is quite concentrated, so long as the suppliers compete regularly and energetically to win business from each other. . . . In contrast, a market that is monopolized or controlled by a cartel is
According to the Services' economists, the presence or absence of “workable” or “effective” competition in the present case must be determined by recognizing that the noninteractive services are “aggregators,” that is, they aggregate sound recordings they have licensed from record companies in the upstream market and then provide access to such licensed sound recordings to listeners in the downstream market. In such a market, “workable competition” is present, according to the Services' economists, if “aggregators can offer attractive packages without the products of particular suppliers and to the extent to which these aggregators can steer their customers toward or away from particular suppliers.” Shapiro WDT at 11. This ability to steer toward or away from certain suppliers is an example of price competition, according to Dr. Katz.
The Services assert that the interactive service agreements that SoundExchange proffers as appropriate benchmarks are not the product of such an “effectively competitive” market. In support of this assertion, the Services advance several arguments.
First, the Services maintain that there is a fundamental difference between interactive and noninteractive services that precludes the former from serving as an “effectively competitive” benchmark for the latter. That fundamental distinction arises, they aver, from the fact that a
Second, the Services note that a lack of effective competition in the upstream interactive market is confirmed by the testimony of numerous SoundExchange witnesses, who conceded that the licenses between record labels and on-demand services are the product of a market devoid of any price competition between record companies to obtain additional plays on on-demand services.
Third, the Services' economists concluded that the reason for the absence of price competition in the upstream interactive market is that the repertoires of each Major are “complements” for each other. As Dr. Shapiro opined:
In the parlance of economics, the “must have” suppliers are complements, not substitutes, because buyers need each of them and cannot substitute one for another. . . . This concept is well known in economics. When two essential inputs must be used together, they are often referred to as “Cournot Complements.” The evidence . . . shows that the repertoires of the major record companies are Cournot Complements for interactive services.
The evidence shows clearly that the major interactive services “must have” the music of each major record company to be commercially viable. The repertoires of the major record companies are not substitutes for each other in the eyes of either interactive services or the record companies themselves. This means that there is no true “buyer choice” in this market. Thus, the market for licensing recorded music to interactive services is not workably competitive. . . .
Fourth, the Services note that SoundExchange's economic expert, Dr. Rubinfeld, did not perform any separate analysis to determine whether the proffered interactive benchmark reflected the dynamics of a competitive market. Rather, he assumed,
Fifth, the Services rely upon numerous statements in several documents from SoundExchange's own principal advocates in the present case that had been submitted to the Federal Trade Commission (FTC) on behalf of Universal seeking approval of Universal's then-proposed merger with EMI—subsequently approved by the FTC and later consummated.
[REDACTED]
[REDACTED]
[REDACTED]
[REDACTED]
[REDACTED]
[REDACTED]
Additionally, iHeart's economic experts, Drs. Fischel and Lichtman, relied upon a [REDACTED] document submitted to the FTC in connection with the Universal/EMI merger, contrasting the “must have” nature of the interactive service market with the more competitive noninteractive service market: “[REDACTED]” IHM Ex. 3054 ¶41 n.70 (Fischel/Lichtman WRT) (
Sixth, according to the Services, the foregoing points demonstrate that Dr. Rubinfeld's proffered interactive benchmark market not only fails to be competitive, but also is
Seventh, the Services note that the Majors structure their contracts with the interactive services to
The Services disagree with SoundExchange's assertion that downstream competition causes Dr. Rubinfeld's interactive benchmark to reflect “effective competition.” In fact, Dr. Katz asserts that SoundExchange's conclusion is 180 degrees wrong:
[W]hen you have a highly competitive downstream industry, there's going to be a smaller markup of [retail] price over cost because the competitive pressures are going to tend to drive [retail] price to cost. So what that means is . . . for any . . . license fees set by the record companies, we have a highly competitive downstream market. There's going to be a smaller markup. That then makes it profitable, more profitable to set a higher price upstream. So, actually,
The Services take Dr. Talley and SoundExchange to task for failing to do any empirical work to confirm whether and to what extent piracy and other downstream alternative music delivery competitors may have affected upstream interactive rates. The NAB notes that Dr. Talley admitted that he had performed no empirical analysis to ascertain whether or to what degree “downstream competition is, in fact, impacting the upstream negotiations” in the interactive market. 5/27/15 Tr. 6092-93 (Talley);
The Services also note that their own experts, contrary to SoundExchange's assertions, had not acknowledged that piracy and other forms of downstream competition had or would reduce upstream interactive rates to an “effectively competitive” level. Rather, as the NAB notes, for example, Dr. Katz testified that even if piracy imposes some constraint, “that doesn't render the market effectively competitive . . . it may be pressure on the monopoly price, but, nonetheless, it's a monopoly price.” 5/11/15 Tr. 2823 (Katz). As Dr. Katz further explained, the merger submissions made by Universal argued that the merger would lead to lower prices because it would remove the Cournot complements pricing effect between UMG and EMI, and that would not have been true if prices had already been squeezed by piracy to near the competitive level:
[T]he parties were saying, if we're allowed to merge, we would find that it would increase our profits to lower our price. So clearly, piracy had not pushed them down to such a low price that going lower would reduce their profit. They actually say, going lower would raise our profits. And what that's telling you is, along with the fact that the other majors are must have[s] as well, is [that] they were actually concerned they were pricing above the monopoly level.
Additionally, the NAB, again through Dr. Katz, notes that identifying a hypothetical increase in the elasticity of demand in the upstream market arising from competition in the downstream market is not the same as identifying a competitive price in the upstream market. Thus, the Services assert that, although Dr. Katz testified that piracy and other forms of downstream competition could have “some sort of an effect, and I believe it's in a downward direction,” 5/11/15 Tr. 2973 (Katz), he was not opining how far such competition might have pushed down the price. They point out that, when Dr. Katz noted the hypothetical possibility that downstream competition could push upstream prices down to competitive levels, he was not suggesting that such a hypothetical circumstance exists in the interactive market. Rather, he was simply saying something is “conceivable, if you're talking about hypotheticals” or “possible,” which does not imply that it is likely, or in any way true in this case.
The Judges find that the impact of piracy and other downstream competitors (such as YouTube) does not serve to promote “effective competition” in any of the relevant upstream markets, including the upstream market for sound recordings licensed for use by interactive subscription services. SoundExchange, through the testimony of Dr. Talley, did note persuasively that in theory these downstream competitors would depress the upstream price. SoundExchange also correctly noted that Drs. Katz and Shapiro concurred with that theoretical point. However, a close reading of the testimony of Drs. Talley, Katz, and Shapiro reveals
In the present case, though, the Judges are not left with mere hypotheticals regarding whether the anticompetitive elements of the interactive market are “benign” or “pedantic.” Nor are the Judges hamstrung, as SoundExchange suggests, by the alleged absence of “bright line” demarcations as to when effective competition is present and when it is not. Rather, the Judges were presented with hard and persuasive evidence that competitive steering has reduced royalty rates in the noninteractive market and would do so in the hypothetical market as well. This evidence of steering (provided by Pandora and iHeart) demonstrates a measurable range of adjustment to the prices that would be set in a market for those streaming services if the services could inject price competition via steering. Thus, the rate set in Dr. Rubinfeld's upstream interactive benchmark market should be adjusted to reflect such price competition, so that it is usable as an “effectively competitive” rate in the segment of the market to which that benchmark applies: The noninteractive subscription market.
The evidence of a range of potential steering adjustments also rebuts SoundExchange's argument that the concept of “effective” or “workable” competition is “fuzzy” and that no “bright line” can be drawn between effectively competitive and non-competitive rates. The Judges find that this “line” needs to be drawn on a case-by-case basis, from the evidence and testimony adduced at the hearing. Here, the range of steering adjustments from direct noninteractive licenses has been introduced in evidence, steering experiments have confirmed the reasonableness of such an endeavor and expert testimony has explained how steering is a mechanism by which to offset the complementary oligopoly power of the Majors (while not reducing their firm-specific and copyright-specific market power).
The Services dismiss the idea that the record companies' negotiations with interactive services are evidence of an effectively competitive market. The Judges agree with the Services criticism of this assertion. As Dr. Shapiro explained, the mere existence of such negotiations is uninformative as to whether the rates negotiated between the interactive services and the Majors are competitive. Pandora PFF ¶ 237 (and citations to the record therein). Moreover, the Services note that Dr. Rubinfeld conceded that the existence of such negotiations is not evidence of a competitive market, because even monopolists negotiate with their customers.
On this issue, the Judges also agree with Dr. Katz, who noted that negotiations over price can occur between a monopolist and its customers in order to facilitate price discrimination and
Bargaining with your customers and having some of the give and take can even be a form of price discrimination in a way to get additional monopoly profits, so the mere fact that your customer asks for something and you say, okay, I will give that to you, particularly if that is going to help you get more money, the fact that you do that doesn't show you lack monopoly power. It shows you are economically rational.
The Judges reject SoundExchange's argument that evidence of its negotiations with interactive services demonstrates that the interactive market is effectively competitive. As the Judges pointed out in their
Further, the Judges cannot ignore the testimony from several record company witnesses, discussed in this determination, in which they acknowledged that they never attempted to meet their competitors' pricing when negotiating with interactive services. Thus, the existence of the negotiations noted by SoundExchange cannot override this more specific testimony.
The Judges were presented with substantial, unrebutted evidence that the interactive services market is
The Services' own evidence demonstrates persuasively that competitive steering has reduced royalty rates in the noninteractive market and would do so in the hypothetical market as well. This evidence of steering (provided by Pandora and iHeart) demonstrates a measurable range of adjustment to the prices that would be set in a market for those streaming services if the services could inject price competition via steering. Thus, the rate set in Dr. Rubinfeld's upstream interactive benchmark market can and should be adjusted to reflect such price competition, in order to render it is usable as an “effectively competitive” rate in the segment of the market to which that benchmark applies—the noninteractive subscription market.
The evidence of a range of potential steering adjustments also rebuts SoundExchange's argument that the concept of “effective” or “workable” competition is “fuzzy” and that no “bright line” can be drawn between effectively competitive and non-competitive rates. The Judges find that this “line” needs to be drawn on a case-by-case basis, from the evidence and testimony adduced at the hearing. Here, the range of steering adjustments from direct noninteractive licenses has been introduced in evidence, steering experiments have confirmed the reasonableness of such an endeavor, and expert testimony has explained how steering is a mechanism by which to offset the complementary oligopoly power of the Majors (while not reducing their firm-specific and copyright-specific market power).
The Judges find that the interactive benchmark proposed by SoundExchange (adjusted as discussed in the previous section) is informative—but only to a particular segment of the noninteractive marketplace. The foundational aspect of Dr. Rubinfeld's interactive benchmark is his assumed equality between two ratios: (1) Subscription revenues to royalties in the
However, Dr. Rubinfeld's oral testimony, and the testimony of the Services' economic experts, indicated that an economic principle indeed underlies his assumed equivalency in these ratios. More particularly, Dr. Rubinfeld acknowledged that his “ratio equivalency” was intended to create a rate whereby every marginal increase in subscription revenue would result in the same increase in royalty revenue, whether that marginal increase in subscription occurred in the interactive market or the noninteractive market. 5/5/15 Tr. 1767 (Rubinfeld). This result, Dr. Rubinfeld agreed, reflected an application of rational profit maximizing behavior by a willing seller, as explained in colloquy with the Judges:
[T]hat's an application . . . of a fundamental economic process of profit maximization. . . . [The record companies] would want to make sure that the marginal return that they could get in each sector would be equal, because if the marginal return was greater in the interactive space than the noninteractive . . . you would want to continue to pour resources, recordings in this case, into the [interactive] space until that marginal return was equivalent to the return in the noninteractive space. Would that be correct?
It would. You said that just the way I would like to have said it when I was teaching that subject. Yes, I agree with that.
Thus, Dr. Rubinfeld's “ratio equivalency,” assumes a 1:1 “opportunity cost” for record companies, whereby, on the margin, a dollar of revenue spent on a subscription to a noninteractive service is a lost opportunity for royalties from
However, the unwarranted assumptions lurking behind Dr. Rubinfeld's economic rationale were noted by the Services' economic expert witnesses. For example, Dr. Lichtman, an economic expert for iHeart, testified:
[Dr. Rubinfeld] assum[es], I think, a perfect substitution . . . assumptions about substitution, competition how all of these markets interrelate. . . . [I]t's intuitive. I understand why he was drawn to it. It's so nice to say, yes, roughly these will all be the same, revenue to royalty, revenue to royalty.
Dr. Rubinfeld's “ratio equivalency”—as a means toward profit maximization—was more than a theoretical abstraction. The desire of the record companies to achieve such pricing parity across markets was confirmed by a senior Warner executive who testified on behalf of SoundExchange:
Our goal,
Mere assumptions as between interactive and noninteractive services regarding substitution, competition, market interrelationships and the like are inadequate, and thus limit the applicable scope of Dr. Rubinfeld's “ratio equivalency” approach. The unsupported and unrealistic assumptions in the “ratio equivalency” approach are considered below.
As Dr. Lichtman noted, the “ratio equivalency” in Dr. Rubinfeld's model makes assumptions regarding substitution, and how these markets interrelate. 5/6/15 Tr. 4043-44 (Lichtman). That is, the “ratio equivalency” approach assumes that the listeners who willingly pay for a subscription to a service have a WTP equal to the WTP of those who use ad-supported (free-to-the-listener) services. However, the record evidence is overwhelming that there is a sharp dichotomy between listeners who have a positive WTP and therefore may pay a subscription fee each month for a streaming service and those listeners who have a WTP of zero.
The most persuasive evidence on this point is found in the results of the conjoint survey conducted by a SoundExchange witness, Dr. McFadden. Dr. McFadden performed his conjoint survey to determine the WTP of consumers who were provided with a menu of bundled features that reflected bundles that existed in the marketplace. His findings revealed the dichotomy regarding the WTP of consumers of noninteractive services:
I find that consumers of streaming services divide between those who are willing to pay for these services (and the extra features they offer) and those who are averse to paying for music streaming services. . . .
This dichotomy was examined in detail by another economist, Dr. Steven Peterson, who was a joint witness for the NAB and Pandora. Dr. Peterson noted a critical bimodality in Dr. McFadden's data (consistent with Dr. McFadden's finding) that reflected two classes of listeners; those who would pay a positive sum for various features available in a noninteractive service and those who refused to pay any money for any features. As Dr. Peterson explained, SoundExchange and Dr. Rubinfeld rely on the average WTP among the survey participants (to confirm Dr. Rubinfeld's interactivity adjustment), but that average obscured the clear bimodality of Dr. McFadden's results:
Dr. McFadden presents only the estimated average willingness to pay for each feature addressed in his survey. However, it is possible to estimate each survey participant's willingness to pay for the features addressed in the survey. Based on the information for individual respondents, Dr. McFadden notes that there is a group of users who are averse to paying for music streaming services. . . . Thus, Dr. McFadden's results are consistent with the record labels' documents that indicate many consumers have a low willingness to pay for subscription streaming services. . . . Moreover, the distribution is bimodal, meaning it has two peaks. . . . [T]he average willingness to pay for a service with no ads masks the fact that there is a bimodal distribution . . . of preferences over the willingness to pay for a service with no advertisements and that the peaks occur so that consumers at the peaks have divergent preferences (
This point is consistent with Dr. McFadden's own testimony, in which he stated: “
The Judges cannot disregard this bimodal chasm. Moreover, the record is replete with evidence corroborating this point. For example, testimony from industry witnesses underscored the unwillingness of a substantial percentage of listeners to pay any price to listen to noninteractive services. A Sony executive testifying on behalf of SoundExchange stated: “It's challenging to convince a consumer to open their [
Another industry witness, Aaron Harrison of Universal, acknowledged that he had no data to support a conclusion that there is “some meaningful group of users who would be willing to pay to subscribe to Pandora beyond those who already have. . . .” 4/30/15 Tr. 1115 (A. Harrison). This was consistent with a broader aspect of Mr. Harrison's testimony, in which he noted, “the music-buying public has never been a huge market. . . .”
Pandora's Chief Financial Officer similarly testified that “approximately an 80 percent slice of the market . . . is unwilling to spend significant money on music,” as reflected in “numerous studies” [that] show that about half of Americans will never spend another dollar and another . . . 35 percent will spend . . . $15 per year.” 5/13/15 Tr. 3553-54, 3356-57 (Herring). This portion of the dichotomized market comprises the core of Pandora's customers: “[T]hat's the group that we target . . . people that aren't going to be able to be monetized through a $10 a month subscription or even a $5 a month subscription but want a free lean-
Further supporting this dichotomy from the record company perspective, an internal Warner strategy document noted that “[a]d-supported services have proven to primarily be additive and to be targeting a different demographic than paid services.” IHM Ex. 3118 at 11;
Expert testimony further confirmed this dichotomy. One of SoundExchange's own witnesses, Dr. David Blackburn, acknowledged that, at one end of the spectrum, consumers were willing to pay a lot of money, and at the other end of the spectrum are people who are unwilling to pay anything for music. 5/4/15 Tr. 1679 (Blackburn). An expert survey witness for Pandora, Larry Rosin, surveyed consumers and found that, annually,
Despite the overwhelming evidence of this dichotomy in WTP, Dr. Rubinfeld's model is based solely on the subscription platform. Thus, it is not reasonable to conclude that the ratio of subscription rates to royalties in the interactive market is relevant to the opportunity cost to a record company of listeners who opt instead for ad-supported noninteractive listening. Rather, ad-supported (free-to-the-listener) internet webcasting appeals to a different segment of the market, compared to subscription internet webcasting, and therefore the two products differentiated by this attribute (“ads and free” vs. “no ads and subscription fee”) cannot be compared to perform a 1:1 measure of opportunity costs as is the case in Dr. Rubinfeld's “ratio equivalency” model.
Even SoundExchange acknowledges, “directly licensed interactive services . . . allow users to
This undisputed distinction drives in part the bimodal nature of the distribution between listeners with a positive WTP for streaming and those with a zero WTP.
The Services dispute the assertion that the increased overlap among the features of the statutory and non-statutory services constitutes a convergence that is meaningful in this rate setting proceeding. In support of this position, the Services make several specific arguments.
The Services note a fundamental difference between interactive services and noninteractive services. They suggest a “bright line” difference between statutory services and non-statutory services that legally prevents convergence with regard to the most critical distinction,
In addition to the above “bright line” difference, statutory licensees are subject to the various other limits imposed by the DMCA performance complement. 5/27/15 Tr. 6136-37 (Fleming-Wood) (“[P]andora adhere[s] to the performance complement for sound recordings. . .”);
Additional differences highlighted by the participants in this proceeding include:
• Pandora's “thumbs up/thumbs down” feature, which does not provide a listener with the ability to select the actual artist or song that is played. 5/13/15 Tr. 3446-47 (Herring).
• The increased use of mobile devices, which does not address the lack of convergence between the essential functionalities of the two services. 5/7/15 Tr. 2304-05 (Rubinfeld); 4/28/15 Tr. 432-33 (Kooker).
• Spotify's mobile Shuffle service, which is not a noninteractive service but rather has numerous on-demand features.
The Services also take issue with the notion that functional convergence is probative of competition relevant to this proceeding. Specifically, the Services argue:
• The “convergence theory” focuses entirely on competition between services in the downstream consumer market, and therefore offers no insight into the lack of competition in the interactive upstream market that SoundExchange seeks to use as its benchmark market. Shapiro WRT at 46-
• The alleged convergence in the downstream market does not address the question of whether the upstream market is effectively competitive. Shapiro WRT at 46.
• Dr. Rubinfeld failed to consider: (1) Substitution patterns among the various modes of music consumption; and (2) market shares in the downstream market. PAN Ex. 5022 at 10 (Shapiro WDT).
• Attempts by on-demand services to offer some radio-like functionality do not demonstrate competition between interactive and noninteractive services in the upstream market, but rather indicate only that on-demand services seek to “cross- over” and enter the “lean-back” market. 5/13/15 Tr. 3555-57 (Herring).
• The fact that some consumers want both lean-back and lean-forward functionality does not mean that each type of service is competing with the other. IHM RPFF ¶ 296 (and record citations therein).
• When Pandora imposed listening caps in 2013 and 2014, it lost listeners to other noninteractive services, not to interactive services, indicating that the competition did not crossover into the interactive market. Fischel/Lichtman WRT ¶¶ 17-18 and Exs. A & B.
• Statutory noninteractive services compete in the market for radio listening, which is distinct from the interactive market, and about 80% of music consumption in the United States occurs via “lean-back” radio-listening experience. Fleming-Wood WDT ¶ 14 n.2; 5/27/15 Tr. 6138 (Fleming-Wood); 5/13/15 Tr. 3397-99 (Herring); Pandora Ex. 5016 ¶ 9 and Figure 2 (Herring AWRT) (showing 76.2% of consumers listen to lean-back services);
The Services claim that SoundExchange misrepresents the nature of their offerings in a manner that falsely implies a convergence of features available on noninteractive services with features available on an interactive service. The Services make the following points.
• The experiment that Mr. Kooker performed failed to demonstrate the purported convergence between interactive and noninteractive services. The services note that, on cross-examination, Mr. Kooker admitted to a number of acts that increased the chances of the desired artist playing during his experiment: (1) He created a new account for the experiment, meaning Pandora had no information on what tracks or types of music the creator liked other than the “seed” artist (unlike the typical Pandora listener who has created many stations, used the thumbs-up/thumbs-down button, skipped tracks, and provided Pandora a host of information on his/her tastes above and beyond the first “seed” artist); (2) he indicated that the new account user was a 25-year-old female, a demographic which Mr. Kooker admitted was specifically chosen because it was “the typical demographic, from Sony's experience, that would be looking for pop hit type of playlists” (and who would then be more likely to receive those playlists); and (3) he skipped songs until he had listened to five songs, even though he acknowledged that such activity could influence Pandora's playlist algorithms.
• iHeart's on-demand video service represents a very minor element of total listenership for iHeart's service. Fischel/Lichtman WRT ¶ 11 n.14.
• “Pandora Premieres” is not a statutory feature and does not operate pursuant to the statutory license. 5/15/15 Tr. 3444 (Herring);
• Even though noninteractive services compete with interactive services “for music listening generally,” it is “marginal,”
The Judges find that there is significant evidence of functional convergence (up to the limits prescribed by the DMCA) between interactive and noninteractive services. Further, the Judges find that downstream competition exists between such services, based on the evidence relied upon by SoundExchange.
However, such convergence and competition are swamped by the overwhelming evidence of the dichotomy regarding the WTP among listeners. Therefore, Dr. Rubinfeld's subscription-based benchmark approach does not demonstrate how convergence and competition affect the relative royalties in the ad-supported, free-to-the listener market. The Judges note, though, that such convergence in the subscription market is suggested by the fact that the subscription-based rate derived by Dr. Rubinfeld from 2014 data, $0.002376, is proximate to Dr. Shapiro's high-end proposed rate for the subscription market of 0.00215. When Dr. Rubinfeld's proposed rate is adjusted downward to reflect an effectively competitive market (as calculated in the Rate Conclusion section), the two rates are even more proximate. Those two benchmark subscription rates therefore indicate that competition and convergence indeed do cause interactive and noninteractive royalty rates to be similar in the subscription market.
Thus, the impact of functional convergence and downstream competition is relevant only in the subscription market. Therefore, once Dr. Rubinfeld's benchmark is limited to the subscription market, the Judges find that SoundExchange's emphasis on the functional convergence of, and downstream competition between, interactive and noninteractive services is pertinent.
Another important change in opportunity cost arises when the upstream purchaser (the noninteractive webcaster in the present context) has the ability to: (1) Purchase a substitute input and “bypass” the input from the complementary oligopolists or monopolist; and/or (2) the ability to “use proportionately less” of the input of the complementary oligopolists or monopolist. In the present case, both Pandora and iHeart have demonstrated that, by steering,
Another important adjustment necessary to render Dr. Rubinfeld's “ratio equivalency” useful is to make certain that the outcome does not simply maintain or import supranormal prices that are the consequence of the absence of effective competition. The need to adjust for undue market power dates back to
Perhaps . . . a showing that the record companies themselves, or even the Majors, could exert oligopolistic power would tempt the panel to
Additionally, Dr. Rubinfeld's model treats the complementary oligopoly
According to Dr. Katz, the “ratio equality” assumption is also contrary to a fundamental economic principle. The buyer,
The Judges reject this criticism as it pertains to the narrow segment of the market to which the Judges apply the interactive benchmark. When the segment of the market at issue consists of willing buyers/licensees who are providing access through
However, in the segment of the marketplace described above, a “willing seller” would not be concerned with the service's calculus of its own profits. If those profits were too low to pay a royalty as a percentage of revenue equal to the royalties paid by the interactive services, the “willing seller” simply would not supply the noninteractive service in that hypothetical subscription marketplace. That decision by the “willing seller” may foreclose one or more services from participation in the subscription market, but, as the Judges noted in the
Dr. Katz further criticized Dr. Rubinfeld's attempt to rely on the equivalence of the aforementioned ratios because Dr. Rubinfeld's noninteractive numerator [
Dr. Katz correctly notes that the numerator in Dr. Rubinfeld's so-called “noninteractive” ratio contains revenues from services that are not DMCA-compliant. Dr. Rubinfeld should have made a further interactivity adjustment to reflect whatever marginal value was attributable to the additional functionality of his stand-ins for the services that he used as proxies for truly DMCA compliant services. However, the Judges find that, given the degree of convergence among all services in terms of functionality, as discussed
An important and fundamental problem with Dr. Rubinfeld's analysis, according to Dr. Katz, lies in Dr. Rubinfeld's failure to acknowledge in his benchmark analysis that the advertising-based revenue model, rather than the subscription-based revenue model, is the dominant business model for noninteractive services. Katz AWRT ¶ 53 (quoting Rubinfeld CWDT ¶ 170 (stating that Dr. Rubinfeld's “analysis does not explicitly account for `free' ad-supported services.”). Katz AWRT ¶ 55.
This criticism was also leveled by one of iHeart's economic experts, who testified, “certainly there is no basis to assume that subscribers are a reasonable proxy for all listeners to noninteractive services,” given that subscribers account
Dr. Katz also criticized Dr. Rubinfeld's attempted rebuttal of this criticism. Dr. Rubinfeld, in rebuttal, noted that he had estimated a 1:1.01 ratio of
According to Dr. Katz, it is incorrect to compare only the revenues of the ad-supported tiers of the two types of services. Rather, the proper approach, according to Dr. Katz, would be to compare the
When such an overall revenue approach was applied by Dr. Katz to the actual service data, he found that the ratio of interactive service revenue to noninteractive service revenue per play was not 1:1, but rather 3.96:1. Katz AWRT ¶ 58, Table 2. This adjustment alone would have the effect of reducing the proposed rate derived by Dr. Rubinfeld from $0.002668 to $0.001347, approximately a 50% reduction. Katz AWRT ¶ 59, Table 3. In similar fashion, iHeart's experts compared overall per play (or performance) data for Spotify and Pandora and calculated an interactivity adjustment of 3.2, Fischel/Lichtman WRT ¶ 69, also reducing the rate below the rate implied by the 1.01 adjustment calculated by Dr. Rubinfeld when he utilized advertising revenue alone in his rebuttal testimony.
As already noted, the Judges acknowledge the validity of this criticism by limiting Dr. Rubinfeld's noninteractive benchmark analysis to the segment of the market in which listeners are
Pandora's economic expert, Dr. Shapiro, levies another overall criticism of Dr. Rubinfeld's interactive benchmark, characterizing it as “circular” and thus “uninformative.” Dr. Shapiro noted that Dr. Rubinfeld asserted that the royalty rates contained in the interactive benchmark agreements “can be expected to reflect the incremental value of the granted functionality over-and-above what can be achieved with the statutory rights.” Rubinfeld CWDT ¶ 145. Thus, according to Dr. Shapiro, backing out the incremental value to make an interactivity adjustment would simply return the analysis to the subscription rates and royalties that are predicated on the existing statutory rates. Therefore, Dr. Shapiro criticizes Dr. Rubinfeld's entire interactive benchmarking exercise as circular, revealing nothing about the rate that would be set absent the statutory rate. Shapiro WRT at 28-29; 5/8/15 Tr. 2723-24 (Shapiro);
The Judges need to consider this criticism in tandem with the Services' prior criticism that the so-called “noninteractive” webcasters selected by Dr. Rubinfeld actually offered non-DMCA compliant features as well. Consequently, when Dr. Rubinfeld backs out the interactive value of these non-DMCA compliant services (by comparing the ratio of interactive to noninteractive subscription prices) he is not simply returning to the existing statutory rates, as Dr. Shapiro asserted, because the royalty rates for those non-DMCA compliant services (as the Services argue) are not merely predicated on the prior statutory rates. Simply put, the Services cannot have it both ways. If Dr. Rubinfeld's “noninteractive” services have some features that render them imperfect benchmarks, then the Judges must consider whether and how to weigh those imperfections. But those imperfections also cut in the other direction, and indicate that the royalty rates negotiated by those services reflect market forces in the subscription sector, rather than merely the statutory rates for DMCA-compliant noninteractive services.
Dr. Katz notes that Dr. Rubinfeld at one point conceded that the “elasticities of demand” by the interactive services and the noninteractive services would differ
Given that the Judges have dichotomized between the subscription and the ad-supported (free-to-the-listener) markets, the Judges do not believe that there are any significant uncertainties regarding the approximate equivalence of the elasticities between the interactive and noninteractive upstream markets for the right to acquire licenses to play sound recordings for subscribers.
In the present case, because: (1) The WTP downstream is positive (which it is by definition in the subscription market);
The Services argue that Dr. Rubinfeld, rather than isolating subscription revenue ratios from ad-supported ratios, should have determined the value of his interactivity adjustment by comparing
The Services offered numerous criticisms of Dr. McFadden's conjoint survey, which was intended by SoundExchange to confirm Dr. Rubinfeld's interactivity adjustment.
The Judges note initially that, in this narrow context of this subscription market, Dr. Rubinfeld's methodology for calculating the interactivity adjustment is not inappropriate. Dr. Rubinfeld reasonably determined the concept of a “ratio equivalency” between revenues and subscription royalties in a market with both: (1) A WTP sufficient to generate subscriptions in each market; and (2) a downstream convergence of features as between the two markets, except for the nonconvergence arising from the statutory restrictions on noninteractive services.
Dr. Katz asserts that Dr. Rubinfeld underestimated the number of “skips” for which an interactive service is not required to pay a royalty under the typical interactive service contracts with record companies. By contrast, a statutory service must pay a royalty for all plays, including such “skips.” (SoundExchange requests that the Judges continue this requirement.
The Judges find that Dr. Rubinfeld accurately adjusted for the number of plays across the interactive and noninteractive spaces. The criticism leveled by Dr. Katz focused only on the number of “skips.” However, Dr. Rubinfeld made a further adjustment for the fact that interactive services typically paid royalties for pre-1972 recordings, whereas the noninteractive services did not. This fact required an increase in the noninteractive royalty rate relative to the interactive royalty rate (
For example, assume there were 100 plays in each market and in each market 10 of those plays were pre-1972 recordings. If the royalty rate (assumedly) was 0.3 cents in each market, then the interactive average rate would be 0.3 cents. However, in the noninteractive market, where no royalty was paid on the 10 pre-1972 recordings, the average royalty rate was only 0.27 cents.
Thus, to equalize the markets on a per-play basis, the noninteractive average rate must be increased. That increase made the downward interactivity adjustment smaller, when it was combined with the fact that—on the other side of the coin—the noninteractive services were required to
Another defect in Dr. Rubinfeld's approach, according to Dr. Katz, was Dr. Rubinfeld's decision to compute his average per-performance royalty by weighting that average according to the revenue per play earned by a service.
Dr. Katz maintained that the more realistic approach would have been to weight the individual on-demand services in the benchmark market by
The Judges find this criticism irrelevant as applied to the subscription market. In the interactive sphere, record company agreements with interactive services are configured pursuant to the “freemium” model, designed to convert “free” listeners into paying subscribers, who generate user revenue.
One of the economic experts for iHeart, Dr. Lichtman, asserted that the sheer number of adjustments, as discussed
The Judges reject the notion that there may be some quantum of adjustments to proposed benchmarks that disqualifies them from consideration. Some variant of a “three strikes and you're out” approach seems decidedly devoid of legal or economic reasoning. The Judges are more concerned with the importance, or weight, of any given criticism of a benchmark than they are with the number of potential adjustments. Trivial or measurable adjustments may be relatively great in number, yet pale in comparison to one or two critical assumptions that might necessitate the qualification or rejection of a benchmark.
This determination is evidence of that point. Dr. Rubinfeld's benchmark fails to account for the fact that a large cohort of the listening public simply will not pay for streamed music. Thus, his subscription benchmark fails to capture the very market of listeners who flock to ad-supported (free-to-the-listener) noninteractive services. That single qualification circumscribes the usefulness of Dr. Rubinfeld's benchmark. One other criticism of his benchmark,
The Services object to annual increases in the royalties as arbitrary and incompatible with the willing buyer-willing seller standard, for the following reasons.
First, the Services contend that there is no basis to assume, without supporting theory or evidence, that rates would necessarily increase during the next rate period. In that regard, the Services note that Professor Rubinfeld admitted that there is no “theoretical reason why we would expect prices just to go up.” 5/5/15 Tr. 1761 (Rubinfeld).
Second, he acknowledged the absence of any basis for his self-described “`empirical judgment' where we think rates are likely to be going for competing products.”
Third, none of the benchmarks on which SoundExchange relied contained annual rate escalators. Moreover, out of all the potential benchmarks that SoundExchange examined, only one has an escalating rate provision.
Fourth, the record evidence indicates that rates in SoundExchange's own proposed benchmark market, interactive streaming services, have
The Services do note Dr. Rubinfeld's assertion that interactive and noninteractive services are converging,
For the foregoing reasons, the Services conclude that SoundExchange's interactive benchmark does not provide a basis to set the statutory rates for commercial webcasters in this proceeding.
The Judges find that SoundExchange has failed to make a sufficient factual showing that would support the linear $0.00008 annual rate increase proposed by Dr. Rubinfeld. The Judges find it dispositive that Dr. Rubinfeld acknowledged that his opinion in this regard was neither based on theory nor on empirical analysis. Further, the fact that some agreements in the benchmark markets have annual escalators and some do not renders those agreements unhelpful, absent some explanation as to the bases for the inclusion or exclusion of such escalators.
Additionally, market forces in the future may cause rates to move in either direction, or to stay constant, and the record does not suggest a basis for a credible prediction. So too is the record devoid of any sufficient predictive evidence as to whether there will be further convergence and/or competition between interactive and noninteractive services or, if so, what impact that might have on the rates. That is, the record does not indicate why convergence would not occur through a reduction in interactive rates, rather than through (in whole or in part) an increase in noninteractive rates. In sum, the record does not contain a sufficient basis to adopt any prediction about the future direction of noninteractive rates.
The Services oppose SoundExchange's use of agreements with Apple and several interactive services for what Dr. Rubinfeld described as noninteractive offerings, and argue that if the Judges consider the agreements, a proper analysis corroborates their own rate proposals and not SoundExchange's.
For the reasons set forth below, the Judges will not consider these agreements in establishing or corroborating a willing-buyer, willing-seller royalty rate.
The Services contend that Dr. Rubinfeld's analysis of the Apple agreements is deeply flawed and unreliable for several reasons. First, the Services argue that Dr. Rubinfeld improperly allocates [REDACTED] and other compensation to the licenses for the iTunes Radio service rather than to other licensed services that Apple provides.
The Judges credit Dr. Shapiro's observation that Dr. Rubinfeld's conclusion that Apple was willing to pay substantially in excess of the statutory license rate for what is essentially a statutory service “just doesn't make any sense.” 5/19/15 Tr. at 4526 (Shapiro). Economists for both licensors and licensees agreed that the statutory rate effectively sets a ceiling on rates for statutory services, since a service can always fall back on the statutory rate if it is unable to negotiate an equal or lower rate with the copyright owner.
One possible reason Dr. Rubinfeld's analysis finds effective rates under the Apple agreements that exceed the statutory rates is that he attributes compensation to the iTunes Radio service that should have been attributed to other services licensed by Apple. The license agreements for the iTunes Radio service between Apple, on one hand, and Sony and Warner, respectively, on the other, are one part of a complex business relationship between Apple and the record companies, covering a number of different services. At or near the time that Apple entered into its iTunes Radio agreements with Sony and Warner, the parties amended some of their existing agreements for other services, and specified that some compensation that Apple was to have paid out under other agreements would be characterized as payments for the iTunes Radio service. Shapiro SWRT at 4; SX Ex. 2072 ¶ 2 (Amendment [REDACTED] to Apple/Warner Sound Recording cloud Service Agreement); Ex. 2073 ¶ 2 ([REDACTED] Amendment to Amended and Restated Apple/Sony Digital Music and Video Download Sales Agreement).
SoundExchange argues that the Judges are bound by the parties' characterization of these payments as unambiguously expressed in their agreements. SoundExchange Reply PFF ¶ 487. If the Judges were resolving a contract dispute between the parties, SoundExchange's argument might have merit. However, the Judges' task is to determine the economic significance of the compensation that changed hands between the parties, and the contracts are but one (albeit vitally important) piece of evidence of that economic significance. Where, as here, a transaction is part of a complex, interlocking business relationship, it is appropriate—even necessary—for the Judges to consider other evidence and analysis to determine the true economic value of the transaction.
That additional evidence is lacking here. The Services raise sufficient doubt as to the characterization of the compensation flowing from Apple to Warner and Sony to persuade the Judges that they cannot rely on Dr. Rubinfeld's analysis of the Apple agreements. There is insufficient evidence in the record to support SoundExchange's analysis and use of the Apple agreements.
The uncertainty resulting from a lack of evidence cuts both ways. The Judges will not consider the licensee services' alternative analyses that seek to demonstrate that the Apple agreements support their rate proposals.
The Services urge the Judges to reject Dr. Rubinfeld's analysis of four additional agreements for allegedly noninteractive services: Beats Music's The Sentence; Spotify's “Shuffle” service; Rhapsody's “Unradio”; and Nokia's “MixRadio.” The Services argue that each service has features that exceed what a service operating under the statutory license would be permitted to offer. The Judges agree, and find that, as with the Apple agreements, there is insufficient record evidence to support a useful analysis of these four agreements.
The Sentence was a free (to the user) feature offered by Beats Music (Beats) as a means of encouraging users to pay for Beats' subscription service.
The Services contend the record demonstrates that The Sentence includes extra-statutory functionality.
Spotify's Shuffle service is a free-to-the-consumer streaming service that permits the user to select a certain number of songs (a minimum of 20 songs or a single album) and hear only those songs in a random order. Fischel/Lichtman SWRT ¶ 14. The ability to select specific songs and be assured that only those songs will be played distinguishes Shuffle from noninteractive services. The increased degree of interactivity would be taken into account in setting royalty rates.
Rhapsody's Unradio service offers users personalized playlists based on the users' favorite artists or songs. It is a paid subscription service, with a 14-day free (ad-supported) trial period. Rubinfeld CWRT ¶ 196. Unlike statutory services, Unradio permits unlimited skips and permits users to play up to 25 favorites and seed tracks on an on-demand basis. Fischel/Lichtman SWRT ¶ 9. Again, this is extra-statutory functionality that would be expected to affect the royalty rate, and that Dr. Rubinfeld did not account for in his analysis.
Mobile phone manufacturer Nokia bundled MixRadio, a free-to-consumer streaming service, with its handsets.
MixRadio thus has significant extra-statutory functionality. Dr. Rubinfeld does not account for this in his analysis.
Like the Apple agreements, the record companies' agreements with Beats, Spotify, Rhapsody and Nokia, respectively, are part of broader economic relationships that include other services.
Because Dr. Rubinfeld failed to account for extra-statutory functionality, and failed to analyze the broader context of these services within the business relationship between the service providers and the record companies, the Judges determine that they cannot rely on the analyses of these agreements to corroborate SoundExchange's interactive benchmark analysis.
For these reasons, the Judges find that Dr. Rubinfeld's interactive benchmark is only applicable when:
• Revenues in both markets are derived from subscription revenues and are thus reflective of buyers with a positive WTP for streamed music;
• functional convergence and downstream competition for potential listeners indicate a sufficiently high cross-elasticity of demand as between interactive and noninteractive services, provided the noninteractive subscription rate is reduced to reflect the absence of the added value of interactivity; and
• a steering adjustment is made to eliminate the complementary oligopoly effect and thereby provide for an effectively competitive market price.
The rate derived from this analysis is set forth in the Rates Conclusion,
In this
Mr. Johnson eloquently stated the plight of the singer-songwriter-artist who is self-published and self-produced. He also proposed an overarching reform to the way in which rights owners of music—written,
Nonetheless, by comparing an artist's revenues from physical phonorecords to the current ten-thousandths of a cent “per spin” calculations for digital performances, Mr. Johnson highlighted very effectively one of the paramount factors complicating this proceeding. The music makers, the music recorders, and the music “consumers”—both broadcasters and listeners—are struggling with how to address and “monetize” the change of the music product paradigm from an ownership model (purchase of physical recordings) to an access model (log in to Internet services and use as much or as little control as one wants to direct the music programming).
GEO makes three separate rate proposals.
GEO proposes that royalty rates for nonsubscription webcasting be the greater of a per-performance rate and a percentage revenue rate:
GEO proposes that royalty rates for subscription webcast streams be the greater of a per-performance rate and a percentage revenue rate:
As an alternative, GEO proposes a combination of a one-time fee (described as a “cloud locker” fee) and a “usage” fee that is the greater of a per-performance royalty and a percentage of revenue. As with Proposal 1, GEO proposes separate rates for subscription and nonsubscription webcast streams.
GEO's proposed nonsubscription rates are:
GEO's proposed subscription rates are:
As a third alternative, GEO Proposal 3 consists of a one-time “cloud locker” fee and a per-performance rate. Proposal 3, which GEO describes as being derived from the inflation-adjusted cost of a record album in 1964, would apply to both subscription and nonsubscription web streams.
GEO requests that the Judges adopt either Proposal 3 or Proposal 2, “or in between.”
Likewise, the Judges find no persuasive evidence to support a “cloud locker” fee of the type that GEO (and only GEO) proposes. Mr. Johnson presented no expert testimony to support a “cloud locker” rate, nor did he provide any evidence that such a rate structure even exists in the market. What he did provide is his statement: “The streamer's economic model leaves out one crucial element—the customer, and the bundled copyright cloud locker or `streaming account' forces payment for all music copyrights up-front, one time, like all other products.”
Therefore, the Judges are left with Mr. Johnson's proposed per-performance rates. The per-performance rates he proposes range from a low of $0.01 per stream ((2016 in Proposal 2 (nonsubscription) and Proposal 3) to $0.30 per stream (2020 Subscription). As with the cloud locker proposal, Mr. Johnson provides no evidence, other than his personal view, that such rates are reasonable, or reflect what a willing buyer and a willing seller would agree to.
Pandora is a noninteractive licensee, and it represents itself as “the leading Internet Radio Service in the United States.” PAN Ex. 5002 ¶ 5 (Fleming-Wood WDT). Like SoundExchange, Pandora proposes a greater-of rate structure. Commercial webcasters would pay the greater of 25% of revenue from eligible transmissions and a range of per-performance royalty rates. Pandora proposes separate ranges of royalty rates for subscription and nonsubscription (advertisement supported) commercial webcasting as follows:
Pandora relies
Merlin is a global rights agency that represents and collectively negotiates on behalf of thousands of independent
These independent record companies negotiate with digital services collectively through Merlin in order to obtain more favorable terms and transaction cost savings than they otherwise could achieve on an individual basis. Van Arman WDT at 10; 4/28/15 Tr. 626-7 (Van Arman); 6/1/15 Tr. 6856-7 (Lexton). Pandora notes that one of the Majors has acknowledged that Merlin is a “virtual [ ] major.” PAN Ex. 5349 at 9 (“[REDACTED]); 5/5/15 Tr. 1969:19-23, 1975:8-1977:4 (Rubinfeld).
Merlin established a procedure for its members to either opt-in or opt-out of the Pandora/Merlin Agreement (most members could [REDACTED], whereas a small number of members reserved the right to [REDACTED]). Members who were represented by independent distributors (
Pandora notes that, by statute, the opting-in Merlin members could have declined to enter into the Pandora/Merlin Agreement and thus remained bound in 2014 and 2015 by the statutory rates that incorporated the Pureplay settlement rates.
According to Pandora, the key terms of the Pandora/Merlin Agreement are those that set forth the rate structure, royalty payments, and steering provisions:
• The agreement employs a greater-of royalty structure, with Pandora paying the greater of a per-play prong and a percent-of-revenue prong. The percent-of-revenue prong specifies 25% of Pandora's revenue, prorated based on the share of performances on Pandora accounted for by the Merlin Labels.
• The 2014 “headline” per-play rates are $0.[REDACTED] for each ad-supported performance and $0.[REDACTED] for each subscription performance. The 2015 “headline” per-play rates are $0.[REDACTED] for each ad-supported performance and $0.[REDACTED] for each subscription performance. PAN Ex. 5014 ¶ 3(a); Herring WDT ¶ 26; Shapiro WDT at 26.
Steering is the term Pandora uses to describe a licensee's “ability to control the mix of music that's played on the service in response to differences in royalty rates charged by different record companies.” 5/8/15 Tr. 2683-4 (Shapiro). Just as the “ratio equality” is foundational to SoundExchange's rate proposal, the concept of “steering” is foundational to Pandora's rate proposal. Shapiro WDT at 27 (“This reduced per-play rate in exchange for increased plays is the central piece of the Merlin Agreement.”).
According to Pandora, steering and the concomitant discounting terms are feasible in the noninteractive market because Pandora has
Pursuant to the Pandora/Merlin Agreement, the “headline” per-play rates can be reduced by steering as follows.
Thus, Pandora claims that steering reduced the headline rates for its ad-supported, nonsubscription service by [REDACTED]% in 2014 and would reduce those headline rates by [REDACTED]% in 2015. Moreover, Pandora claims that steering reduced the headline rates for its subscription service by [REDACTED]% in 2014 and would reduce that headline rate by [REDACTED]% in 2015. PAN Ex. 5014 ¶ 4; Herring WDT ¶ 27; Herring AWRT ¶ 48; Shapiro WDT at 27.
The calculation of these effective steered rates is explained in paragraph 4 of the Pandora/Merlin Agreement, which sets forth the following provisions for calculating the rates resulting from steering, using the 2014 ad-supported headline rate of $0.[REDACTED] as an example.
Pandora promises to increase “quantity” (spins) by at least [REDACTED]% in the aggregate above Merlin's “Natural Performance Rate.”
That discount is calculated as [REDACTED]. PAN Ex. 5014 ¶ 4(a)-(c).
In support of a statutory rate based on the steering aspects of the Pandora/Merlin Agreement, Pandora advances several arguments. First, Pandora maintains that steering embodies “price competition at work,” and therefore reflects an “effectively competitive” market. 5/19/15 Tr. 4561-64 (Shapiro). Effective competition results from the power to steer because, according to Dr. Shapiro, a streaming service that possesses an ability to “steer” towards certain recordings, and away from others, will have “much more
In theoretical terms, a service's ability to steer increases its price elasticity of demand, reducing the extent to which a licensor can mark up its price over marginal cost. 5/19/15 Tr. 4561-64 (Shapiro); 5/8/15 Tr. 2725-27 (Shapiro); Pandora PFF ¶¶ 147-148, 152-157 (and record citations therein). The relationship among elasticity, price and costs as a basis to measure market power is described by the Lerner Equation (or Lerner Index)—a fundamental economic pricing rule. Shapiro WDT at 5. In mathematical terms, the Lerner Equation
Second, Pandora asserts that steering is not only theoretical and a contractual commitment, it is occurring under the Pandora/Merlin Agreement. Specifically, Pandora is actually steering [REDACTED]% above Merlin's “natural performance rate” of sound recordings, greater than the [REDACTED]% it has contractually committed to steer—evidencing that Pandora's steering behavior is motivated by “price differences,” not merely by the contractual “steering commitment.” Shapiro WRT at 41;
Dr. Shapiro noted that when steering is possible, the mere
Pandora avers that the Pandora/Merlin Agreement's steering provisions reflect these competitive forces,
According to Pandora, from the “willing buyer” perspective, the ability to steer provides Pandora with the “competitive incentive to play directly-licensed tracks more heavily than [it] would otherwise.” Herring AWRT ¶ 48. On the other side of the transaction, according to Pandora, the record shows that for a “willing seller,”
Pandora further avers that its “overspinning” of Merlin tracks by [REDACTED]% has not resulted in any negative feedback from Pandora listeners or any negative financial impact. 5/18/15 Tr. 4229-33 (Herring) (explaining that Pandora increased plays of Merlin tracks, on an aggregate basis, by approximately [REDACTED]% in 2014, but this change in the mix of spins did not cause any increase in “complaints about song quality from Pandora listeners).
In support of its assertion that the effects of potential steering can be pervasive in the noninteractive market, Pandora relies in part on its own internal “steering experiments.” More particularly, in 2014, at Dr. Shapiro's direction, Pandora conducted a set of steering experiments to test its ability to overspin recordings owned by each of the Majors.
The 2014 steering experiments were conducted by Pandora's in-house “Science Team” which has primary responsibility for designing and analyzing “controlled experiments.” PAN Ex. 5020 ¶ 7 (McBride WDT). Pandora witness Dr. Stephen McBride is a member of Pandora's Science Team, which performs research and analyses to measure the effectiveness of features offered by Pandora. McBride WDT ¶¶ 1, 5. The Science Team is composed of 15 individuals, 13 of whom hold doctorate degrees in computer science, engineering, statistics, or economics from leading academic institutions.
Pandora's controlled experiments (including the steering experiments) consist of comparisons between randomly selected groups of listeners, one group receiving a manipulated experience (the “treated” group) and the other group receiving the standard Pandora experience (the “control” group).
Pandora initiated the steering experiments because: (1) It had the general technological capability to perform more of one record company's sound recordings and/or fewer of another record company's sound recordings; and (2) it recognized that, as a noninteractive service it has the economic incentive to “steer” its performances toward music owned by a particular record company if that music is available at a lower royalty rate. Shapiro WRT at 22-25. Therefore, Pandora decided to determine through its steering experiments whether and to what extent it could use this technological ability to steer performances
Thus, from June 4, 2014, to September 3, 2014 (13 weeks), Dr. McBride and his colleagues at Pandora conducted a series of steering experiments in order to answer two questions: (1) Whether increases or decreases in performances of sound recordings owned by a particular record company would have a measurable impact on a key listener metric (average hours listened per registered user; and (2) whether Pandora's engineers could precisely manipulate the share of music played according to the record company that owns the recordings. McBride WDT ¶¶ 7, 12, 15.
The Steering Experiments consisted of a group of 12 experiments. Each experiment involved a combination of one of three target ownership groups
The experiments demonstrated that Pandora was able to steer −15% or +15% for all three Majors without causing a statistically significant change in listening behavior. McBride WDT ¶ 21. However, Pandora was unable to steer −30% or + 30% for Universal or Sony without creating a statistically significant change in listening behavior.
The Pandora/Merlin Agreement contains the following additional terms that are specifically addressed by Dr. Shapiro in his benchmark analysis:
• [REDACTED]: Pandora also agreed to provide the Merlin members who opted in with a [REDACTED] in the event Pandora [REDACTED]. PAN Ex. 5014 ¶ 3(e); Herring WDT ¶ 26; Shapiro WDT at 28-29. This provision has not been triggered, 6/1/15 Tr. 6897 (Lexton), and Merlin's negotiators understood it was unlikely ever to be triggered.
•
• [REDACTED]: The Merlin members who opt-in are [REDACTED] to receive a specified [REDACTED]. PAN Ex. 5014 ¶ 5; Herring WDT ¶ 29.
•
Based on the foregoing, Pandora asserts that the Pandora/Merlin Agreement is the best benchmark in this proceeding because
• it constitutes a competitive and arms-length direct license between a noninteractive webcaster and thousands of record companies;
• it concerns the same rights as are covered by the statutory license;
• it covers the same type of products at issue in this proceeding—public performances of sound recordings on noninteractive Internet radio; and
• it involves the same “willing sellers” (record companies that own sound recording copyrights) and a “willing buyer” (Pandora) that exist in the hypothetical market.
Pandora and its economic expert, Dr. Shapiro, did not simply apply the steering-adjusted rates implied by the Pandora/Merlin Agreement, but rather also considered potential further adjustments that might be required for an “apples-to-apples” comparison of the terms in the Pandora/Merlin Agreement with the statutory terms applicable to noninteractive licenses.
The three principal aspects of the Merlin Agreement that Dr. Shapiro considered for potential additional adjustments were:
1. Differences in the determination of which performances are compensable as compared to the statutory license (
2. additional financial terms of the Pandora/Merlin Agreement, including [REDACTED]; and
3. non-pecuniary terms in the Pandora/Merlin Agreement.
This adjustment is required, according to Dr. Shapiro, because, on the one hand, the Pandora/Merlin Agreement treats [REDACTED] as non-compensable and the performance of [REDACTED] as compensable, but the statutory licenses takes the opposite tack on both issues—treating [REDACTED] as compensable and the performance of [REDACTED] as non-compensable.
First, he calculated the total payment Pandora expected to make to the opting-in Merlin members for all sound recordings under the Pandora/Merlin Agreement.
Second, he divided that total payment by the number of performances of Merlin Label recordings that would be compensable under the statutory license (as currently defined). Shapiro WDT at 30-31; Appendix D.
Dr. Shapiro describes this calculation as yielding a per-play rate that the Pandora/Merlin Agreement would establish if Pandora and Merlin had negotiated an agreement with a fixed per-play rate that treated [REDACTED] as compensable and performances of [REDACTED] as non-compensable.
The Pandora/Merlin Agreement contains additional financial terms not permitted in the statutory license. Dr. Shapiro attempted to determine whether it was appropriate to increase his proposed rate to reflect values for these items. Dr. Shapiro ultimately found no basis to increase his proposed rates to reflect these items. Shapiro WDT at 28-29 (Appendix D);
Dr. Shapiro assigned no separate value to Merlin's contractual right to receive [REDACTED]. According to Dr. Shapiro, he made no adjustment to his proposed rate to reflect this term because Pandora's financial projections did not show that Pandora would [REDACTED] in 2014 or 2015.
Dr. Shapiro also assigned no separate value to the [REDACTED] that provided Merlin with [REDACTED]. He testified that he declined to add a separate value for [REDACTED] because:
[The] rate proposal is based on payments that Pandora is making and will be making to Merlin where the guarantee is binding. So the insurance is coming in. And those payments are included and, of course, raise the amounts of money that Pandora is paying and, therefore, they raise the rate that's in my proposal, so it includes that.
The Pandora/Merlin Agreement also contains non-pecuniary financial terms that are not permitted in the statutory license. Dr. Shapiro attempted to determine whether it was appropriate to increase his proposed rate to reflect any values for these items. Shapiro WDT at 29-31; Appendix D at D-10-19 (“Non-Pecuniary Terms in the Merlin Agreement”);
Dr. Shapiro did make an adjustment to increase his calculated “steered” rate by 0.0002¢ (
Pursuant to the Pandora/Merlin Agreement, Pandora agreed to allow each Merlin member that had opted-in to [REDACTED]. PAN Ex. 5014 § 7. Dr. Shapiro did not make an adjustment to increase the value his benchmark for this non-statutory benefit, because Pandora personnel told him that “[REDACTED] are mutually beneficial to the Merlin Labels and to Pandora.” Shapiro WDT at D-12. With regard to the benefit to Pandora, Dr. Shapiro was informed by Pandora personnel that “Pandora considers that [REDACTED] strengthen artist engagement with Pandora and thereby drive incremental listening and listeners to the service, build brand loyalty, and enhance listener retention.”
Each Merlin member that opted-in to the agreement could elect to [REDACTED]. PAN Ex. 5014 (Pandora/Merlin Agreement § 8).
According to Dr. Shapiro, [REDACTED] are mutually beneficial to the opting-in Merlin members and to Pandora. Shapiro WDT at D-13. Dr. Shapiro took note that Pandora believed the presence of [REDACTED] might be “accretive to the listener experience” as well as a form of advertising, and that Pandora was in fact planning controlled tests to measure listener responses and solicit listener feedback in order to determine the appropriate nature and frequency of [REDACTED] on [REDACTED] stations.”
In light of the foregoing, Dr. Shapiro could not conclude that the [REDACTED] provision on balance created more value for Merlin than for Pandora, and therefore he made no adjustment to his proposed effective royalty rate on that basis.
Pursuant to the Pandora/Merlin Agreement, opting-in Merlin members will receive [REDACTED] metrics regarding [REDACTED]. PAN Ex. 5014 § 9 (Pandora/Merlin Agreement) see also Shapiro WDT at D-14 & n.29); Herring WDT ¶ 30.
However, Dr. Shapiro noted that, at the time he prepared his testimony, Pandora was also developing a service called the Artist Marketing Platform (“AMP”), expected to launch in October 2014, through which Pandora proposed to provide these same metrics to all artists, not only to artists on the labels of Merlin members. Pandora did not plan to charge for AMP. Shapiro WDT at D-14 & n.30;
Since Pandora stated that it intended to make its AMP available to all artists at no charge, Dr. Shapiro concluded that no adjustment to the effective royalty rate was necessary to account for the Pandora Metrics to which Merlin Labels would have access. Shapiro WDT at D-14.
Under the Agreement, Pandora, [REDACTED], may create a [REDACTED]. PAN Ex. 5014 § 10 (Pandora/Merlin Agreement);
Pandora personnel explained to Dr. Shapiro that such [REDACTED] were potentially mutually beneficial to the Merlin members and to Pandora.
By way of comparison, Dr. Shapiro noted that Pandora is working with another entity to [REDACTED] that will feature specific artists.
For these reasons, Dr. Shapiro concluded that no adjustment to the effective royalty rate was necessary to account for the [REDACTED] provision in the Merlin Agreement.
Pursuant to the Pandora/Merlin Agreement, opting-in Merlin members receive [REDACTED] in “Pandora Presents” and “Pandora Premieres” events. PAN Ex. 5014 § 11 (Pandora/Merlin Agreement). Dr. Shapiro considered these two types of events separately.
Pandora Presents is a program launched in December 2011, through which artists perform live before an audience of fans that Pandora identifies and invites without charge. Fleming-Wood WDT ¶ 29. Each of these events is designed for and sponsored by an advertiser. Pandora essentially plays the role of a concert producer and promoter, choosing artists to feature in Pandora Presents events that will best speak to the target audience of the sponsoring advertiser.
There have been between [REDACTED] Pandora Presents events per year featuring artists on Merlin labels.
Pandora acknowledges that Pandora Presents generates promotional benefits for the featured artists. However, Pandora also understands that Pandora Presents also generates marketing benefits for Pandora with respect to advertisers, listeners, artists, and labels.
Because of the foregoing, Dr. Shapiro likened Pandora's role in coordinating Pandora Presents events to that of an independent concert producer and promoter. Therefore, Dr. Shapiro concluded that the [REDACTED] Pandora Presents events, on balance, did not call for any adjustment to the effective royalty rate he had calculated. Shapiro WDT at D-17.
Pandora Premieres is a program through which Pandora promotes albums in the week prior to their release. Fleming-Wood WDT ¶ 30. Pandora sends an email inviting certain listeners (selected based on their listening tastes and profiles) to listen to a new album during the week prior to its release date.
Pandora requires the labels to waive royalties for the one-week period that an album is on Pandora Premieres. Shapiro WDT at D-18. Pandora personnel informed Dr. Shapiro that Pandora has never charged labels for their participation in Pandora Premieres and has no plans to do so.
Pandora Premieres features two to five albums per week, or about 150 albums annually. Fleming-Wood WDT ¶ 30. Pandora personnel informed Dr. Shapiro that approximately [REDACTED] percent of these albums are by artists whose labels are Merlin members and Pandora estimates that participation by artists whose labels are Merlin members will [REDACTED] to [REDACTED] percent. Shapiro WDT at D-18 nn.51, 52. Pandora also estimates that the number of Merlin label albums featured on Pandora Premieres will [REDACTED] from around [REDACTED] per year to around [REDACTED] per year.
Dr. Shapiro acknowledges that Pandora Premieres generates promotional benefits for the featured artists and their labels, but that benefit is offset by (and evident from) the fact that labels waive royalties for the one-week period that an album is on Pandora Premieres. Shapiro WDT at D-18. Pandora also receives significant benefits from Pandora Premieres, because it offers a benefit to Pandora listeners, who receive an early opportunity to listen to entire new albums from artists they like and to buy the music. Fleming-Wood WDT ¶ 30.
On balance, therefore, Dr. Shapiro concluded that Pandora Premieres generates significant benefits both to the artists and label, on the one hand, and to Pandora as well. Because the program is mutually beneficial, and because Pandora [REDACTED], Dr. Shapiro concluded that the [REDACTED] in Pandora Premieres does not call for an adjustment to the effective royalty rate he had calculated. Shapiro WDT at D-19.
Dr. Shapiro adjusted his proposed rates higher to reflect anticipated inflation over the 2016-2020 statutory period. Shapiro WDT at 35. However, at the hearing, Dr. Shapiro testified that he would have preferred not to predict future inflation, but rather to include a statutory term requiring the rates to be adjusted annually to reflect actual inflation. 5/19/15 Tr. 4608-10 (Shapiro). Dr. Shapiro did not make any other adjustments to reflect anticipated or predicted changes over the statutory
Dr. Shapiro explained why he proposed two alternative rates: “[The rate selected] depends on how much steering Pandora is doing. If they do more steering, that lowers the rate they're going to be paying, in fact, and so then that lowers the corresponding statutory rate derived from the Merlin Agreement.” 5/19/15 Tr. 4603-04 (Shapiro).
In addition to the proposed per-play rates, Dr. Shapiro's rate proposal employs a greater-of structure, with the second prong set at “25 percent of the revenue attributable to the licensed music,” as such revenue is defined in the regulations proposed by Pandora. Shapiro WDT at 20 & n.30; 5/19/15 Tr. 4608:16-23 (Shapiro). This is the same greater-of rate structure adopted by the parties to the Pandora/Merlin Agreement. PAN Ex. 5014 ¶ 3(a). According to Dr. Shapiro, a greater-of formula with a “percent-of-revenue” prong is proper for the following reasons.
[T]he Merlin Agreement . . . specifies that Pandora's royalty payments to the participating Merlin Labels . . . will be at least 25 percent of its revenue attributable to the music of those labels. These agreements show that, as a practical matter, royalties for recorded music can indeed be based on webcaster revenues, at least in the case of Pandora. Furthermore, webcasters and many other types of music users pay royalties to music publishers and composers, through ASCAP and BMI that are set as a percentage of revenue. For example, the ASCAP rate court recently established a royalty rate for Pandora of 1.85 percent of revenue for the period 2011-2015 for its performance of musical compositions in the ASCAP repertoire. This indicates to me that webcasting revenues can serve as a practical basis for royalty payments.
Pandora avers that the effective rates established by the Pandora/Merlin Agreement are not only representative of the rates that
Pandora answers this question in the negative, for two reasons. First, according to Dr. Shapiro, the empirical evidence demonstrates that there is no greater promotional effect on the sale of songs from the Majors (as compared to the Indies) from performances on Pandora to support an upward adjustment to the Merlin benchmark. 5/19/15 Tr. 4623-64 (Shapiro). Second, Pandora has the same ability to steer toward and away from the repertoires of each of the Majors, just as it has done with the Merlin Labels.
To bolster this argument, Pandora notes that Dr. Rubinfeld's analysis vis-à-vis his own interactive benchmark reveals that Merlin receives essentially the same level of monetary consideration as the Majors in the interactive market. Pandora concluded therefore that the effective rates derived from the Pandora/Merlin Agreement
SoundExchange opposes the use of the Pandora/Merlin Agreement as a benchmark in this proceeding. Its opposition is based upon several principal arguments.
SoundExchange asserts that the Pandora/Merlin Agreement does not cover the
• [REDACTED];
• [REDACTED];
• [REDACTED];
• [REDACTED];
• [REDACTED];
• [REDACTED];
• [REDACTED]; and
• [REDACTED].
Given these differences between the Pandora/Merlin Agreement and the statutory license, SoundExchange concludes that the former at best is but a weak benchmark for the latter.
According to SoundExchange, not only is the Pandora/Merlin Agreement a deficient benchmark, Dr. Shapiro also wrongly failed to increase the value of that benchmark to reflect the value of the non-statutory consideration in the Pandora/Merlin Agreement. SoundExchange asserts that Dr. Shapiro instead focused only on the lack of value attributed
SoundExchange asserts that, had Dr. Shapiro considered the value placed on these extra-statutory elements of consideration by Merlin and its members, the total value of the consideration would have at least equaled the existing Pureplay statutory settlement rates for 2014 and 2015. In support of this point, SoundExchange relies in substantial measure on the testimony of one of Merlin's two chief negotiators of the Pandora/Merlin Agreement, Charlie Lexton, Merlin's Head of Business Affairs and General Counsel. SX Ex. 13 ¶ 1 (Lexton WRT). Mr. Lexton testified that, in Merlin's view, the consideration provided to Merlin members by the Pandora/Merlin Agreement was, “at worst, no lower than the compensation under the existing statutory rate paid by Pandora.”
More particularly, SoundExchange relies on the following evidence and testimony with regard to items of extra-statutory consideration.
According to SoundExchange, the evidence shows that Merlin and its members placed a value on the [REDACTED] provision, because Merlin obtained this provision through its negotiations with Pandora. 6/1/15 Tr. 6894-95 (Lexton). Specifically, Merlin had initially asked for [REDACTED], which Pandora refused to provide, leading to this [REDACTED] provision as an alternative to [REDACTED].
Mr. Lexton said that this provision was important because Merlin believed, after considering [REDACTED], that there was a reasonable chance that [REDACTED] provision would be triggered, particularly during Pandora's fourth quarter of 2014. 6/1/15 Tr. 6896-98 (Lexton). Mr. Lexton further noted that Pandora offered Merlin the [REDACTED] the Pandora/Merlin Agreement as a counterproposal to Merlin's proposal to [REDACTED]. SX Ex. 310 at 1; 6/1/15 Tr. 6986 (Lexton). In the same vein, Mr. Van Arman, co-founder and co-owner of the Indie record company (and Merlin member) Secretly Group, testified that the presence of the [REDACTED] provision was one of the reasons his labels opted-in to the Pandora/Merlin Agreement. 6/2/15 Tr. 7172 (Van Arman).
The Pandora/Merlin Agreement obliges Pandora to [REDACTED] to the opting-in Merlin members. PAN Ex. 5014 § 5. These [REDACTED] are not available under the statutory license and are not replicated in Pandora's rate proposal. SoundExchange notes that Mr. Lexton testified that Merlin would not have entered into the Pandora/Merlin Agreement if it had not contained these [REDACTED] commitments. 6/1/15 Tr. 6906 (Lexton). SoundExchange also notes that Pandora itself viewed the [REDACTED] as a valuable [REDACTED] provision.
Mr. Lexton testified that Merlin would not have entered into the Pandora/Merlin Agreement if it had not included the advertising and promotion benefits ultimately embodied in the agreement. 6/1/15 Tr. 6909 (Lexton). According to Mr. Lexton, these benefits clearly were of value to Merlin's members.
In like fashion, Simon Wheeler, Director of Digital for another Merlin member, Beggar's Group, testified that one of his company's motivations for opting-in to the Pandora/Merlin Agreement was that it afforded Beggar's Group the ability to “tap into” these promotional opportunities that were unavailable under the statutory license. SX Ex. 31 ¶ 23 (Wheeler WRT).
SoundExchange also notes that Mr. Herring, one of Pandora's negotiators, likewise recognized that these promotional tools had potential value to Merlin, and, indeed, he acknowledged his awareness that “Merlin believed that [these provisions] added value.” 5/18/15 Tr. 4275-76 (Herring). He further acknowledged his awareness that Merlin had “sold” the promotional
When Pandora first proposed a direct license to Merlin, Pandora offered Merlin and its members access to Pandora's internal data. SX Ex. 104 at 5. The right to such access was embodied in the final Pandora/Merlin Agreement. PAN Ex. 5014 § 9. Mr. Lexton testified that licensors do not have access to this type of data under the statutory license. Lexton WRT ¶ 40.
Both Pandora and Merlin acknowledged that such data are valuable to record labels generally. Westergren WDT at 16-17; SX Ex. 1736 at 5; 6/2/15 Tr. 7157 (Van Arman);
SoundExchange also criticizes the usefulness of the Pandora/Merlin Agreement as a benchmark for more general reasons:
SoundExchange asserts that the Pandora/Merlin Agreement pertains only to record companies that represent less than [REDACTED]% of Pandora's performances and therefore cannot represent what the record companies—including all three Majors—comprising Pandora's other [REDACTED]% of performances, would negotiate for in the hypothetical marketplace. SX RPFF ¶ 753; SX PFF ¶ 507 (both relying on Shapiro WDT at 76). SoundExchange also avers that the Pandora/Merlin Agreement is not sufficiently probative of the rates that Indies would agree to voluntarily because the bulk of the Indies who opted-in [REDACTED]. 6/1/15 Tr. 6860, 6865-66 (Lexton). SoundExchange also notes that roughly 30% of the Merlin labels that opted-in do not regularly operate in the United States. 6/1/15 Tr. 6863-64 (Lexton). Additionally, Mr. Lexton estimates that of the [REDACTED] or so Merlin members that opted-in directly (rather than through distributors or aggregators), approximately [REDACTED] have been affirmatively rejected by Pandora for inclusion in the Merlin license, based on Pandora's [REDACTED].
SoundExchange notes that the Pandora/Merlin Agreement applies to only one licensee, Pandora, and the terms of that license were not replicated in any other contract with any other licensee. SoundExchange finds this point relevant because of Pandora's “significant competitive strengths” among webcasters, including its 77.6% share of internet radio listening. PAN Ex. 5012 at 11. According to SoundExchange, this large market share afforded Pandora with market power that was a meaningful factor in the negotiations of the license with Pandora.
SoundExchange asserts that the Pandora/Merlin Agreement was merely an “experimental” modification of the restrictions created by the sound recording performance complement. SX PFF ¶¶ 576-580 (and record citations therein). At the hearing, Merlin characterized the Pandora/Merlin Agreement as “experimental.” SX Ex. 13 ¶ 27 (Lexton WRT) (describing the license as “an exercise in
SoundExchange emphasizes the absence of what might otherwise be an important piece of evidence: No major record company has agreed to a direct license with Pandora or any other webcaster on the same rates and terms of the Merlin license. SoundExchange notes that this is unsurprising, in that Pandora's C.F.O. Mr. Herring, acknowledged that Pandora regularly had conversations with the Majors, but did not replicate the terms of the Pandora/Merlin Agreement. 5/18/15 Tr. 4203 (Herring). In fact, Mr. Herring recognized that Pandora would have been unable to negotiate the same terms with the Majors and would have to offer the Majors better terms. 5/18/15 Tr. 4253 (Herring) (acknowledging that he “expected [to] . . . have to give more favorable economic terms to a major record company than you would have to give to an independent record company.”).
To drive home this point, SoundExchange contrasts the absence of evidence of any agreement between a Major and Pandora with the record evidence of the iHeart/Warner Agreement. SoundExchange notes that, pursuant to the iHeart/Warner Agreement, SX Ex.33, per-play rates (
SoundExchange rejects Pandora's foundational assumption that the steering provisions of the Pandora/Merlin Agreement can be used to determine the statutory rate. SoundExchange's rejection of steering as a relevant benchmarking tool is based on several factors:
SoundExchange argues that as a matter of simple arithmetic a webcaster cannot commit to steer to every record company or label, because there is only a total of 100% subject to steering. As one of its economic experts noted:
[A]n affirmative obligation to steer just can't be implemented on a market-wide basis. It's just not possible for a service to say I'm going to steer listenership towards each label that I contract with.
Similarly, SoundExchange notes that an iHeart executive, Mr. Cutler, recognized the impossibility of promising steering to all record companies: “Certainly, the share has to—its math has to add up to—a hundred, so if someone goes from 20 to 30, the rest of the pool must—those ten points must come from somewhere else.” 6/2/15 Tr. 7239 (Cutler).
Thus, as Dr. Rubinfeld noted, the steering provisions provided Merlin with “first mover” advantages. Rubinfeld CWRT ¶ 70. SoundExchange concludes therefore that Pandora cannot escape from this “quandary” by discarding the [steering commitment], yet retaining the [discounted rates] from the Pandora/Merlin Agreement. According to SoundExchange, discarding the [steering commitment] would separate the rate in the agreement from the specific bargained-for consideration that Merlin obtained in exchange for that rate. SX RPFF ¶ 764.
SoundExchange asserts that the steering provision provides Merlin with a financial advantage that cannot be duplicated under the statutory scheme. Therefore, SoundExchange avers, Pandora's proposed benchmark must be adjusted upward to reflect that this non-statutory value, like all non-statutory consideration, permitted a reduction in the benchmark royalty rate.
SoundExchange challenges Dr. Shapiro's assertion that, in the hypothetical market, the ability of a noninteractive service to steer among record companies would necessarily create a “threat” of steering that would cause rates to decline to an effectively or workably competitive level. SoundExchange asserts that the record is bereft of
SoundExchange argues that Pandora failed to test steering under real-world conditions, because there is no evidence that listeners were ever aware that steering was occurring. More particularly, SoundExchange points out that Pandora has yet to experience any potential negative listener reaction that may arise if and when competitors advertise that Pandora has modified its algorithm in a manner that contradicts its long-standing claim to play “only the music listeners want”
Additionally, SoundExchange notes that Pandora has been unable to generate as much “real world” steering as it intended under the Pandora/Merlin Agreement. Specifically, the evidence actually shows that Pandora has not achieved the [REDACTED]% steering target for most Merlin labels. 5/19/15 Tr. 4676-16 (Shapiro). Dr. Shapiro also admitted that, as of November 2014, Pandora had been unable to achieve the [REDACTED]% target for “a good number” of record labels.
From these facts, SoundExchange concludes that Pandora has failed to provide sufficient real world evidence regarding its ability to steer, demonstrating a disconnect between the theoretical case it has presented and the realities it faces in the marketplace.
SoundExchange argues that a record company could respond to a steering threat by refusing to license 100% of its repertoire to Pandora. In support of this position, SoundExchange quotes Dr. Shapiro, who acknowledged that “a record company with market power” could use that power to disable a webcaster's threat of steering. 5/19/15 Tr. 4576-77 (Shapiro). Dr. Talley similarly noted that, “in the hypothetical market where there is no background statutory rate . . . a label might say, okay, if you're going to [steer against us], we may just walk away. . . .” 5/27/15 Tr. 6074 (Talley);
SoundExchange finds support for this position because the Services' economic experts declined to conclude that the Majors were not “must haves” for noninteractive service.
SoundExchange asserts that it can contract around a noninteractive service's proposal or threat to steer by insisting upon a specific anti-steering clause or a more general “Most Favored Nation” (MFN) clause.
Several such anti-steering contract clauses were in evidence in the proceeding:
• The agreement between [REDACTED] and [REDACTED] contains an anti-steering clause that prevents [REDACTED] from steering towards lower-priced music, including on playlists, if that steering would result in lowering [REDACTED]'s share of total plays to a level that is less than [REDACTED]'s market share. SX Ex. 37;
• The agreement between [REDACTED] and [REDACTED] contains an anti-steering provision to prevent [REDACTED] from steering listeners away from [REDACTED] content and towards that of another label. 4/30/15 Tr. 1145 (Aaron Harrison);
• Mr. Harrison testified that [REDACTED]; 6/2/15 Tr. 7206 (Aaron Harrison);
• The agreement between [REDACTED] and [REDACTED] prohibits [REDACTED] from promoting another label's repertoire if it would then exceed its market share, unless Spotify offers the same increase in market share to [REDACTED]. SX Ex. 80 at 25537-38;
• The agreement between [REDACTED] and [REDACTED] contains an anti-steering provision that guarantees [REDACTED] will get [REDACTED] equivalent to its market share [REDACTED]. The provision further provides that if any other record company receives an “uplift” over its Soundscan market share, [REDACTED] will receive the same “uplift.” SX Ex. 343 at 20; SX Ex. 1814 at 26; SX Ex. 346 at 5;
More broadly, as noted above, SoundExchange asserts that, as in the interactive market, the Majors could insist upon a general MFN clause in each contract with a service, which would ensure that each Major gets the benefit of the rates and terms set forth in the service's contracts with the other Majors.
• The agreement between [REDACTED] and [REDACTED] contains an MFN provision providing that if [REDACTED] enters into an agreement with another major record label that provides more favorable terms for that label regarding specified key provisions (including [REDACTED]), then [REDACTED] must notify [REDACTED] of those more favorable terms and give [REDACTED] the option to avail itself of those terms. SX Ex. 80 at 25542-43; PAN Ex. 5091;
• The agreement between [REDACTED] and [REDACTED] contains an MFN providing that if [REDACTED] grants another label more favorable financial terms, then [REDACTED] must also offer those terms to [REDACTED]. SX Ex. 36;
• The agreement between [REDACTED] and [REDACTED] contains the equivalent of an MFN provision (an “equal treatment” clause) by which [REDACTED] warrants that it has not provided [REDACTED] to another label. In the event that [REDACTED] has violated this warranty, the [REDACTED] clause permits [REDACTED] to receive an immediate [REDACTED] to match the superior terms. SX Ex. 343;
SoundExchange notes that, as Dr. Katz candidly acknowledged, a record company could neutralize a steering threat by seeking a lump sum payment instead of per-play rates. 5/11/15 Tr. 3015-6, 3019-20 (Katz).
SoundExchange addresses what it suggests may be conflicts of interest as between Merlin and its distributor/aggregator-members, on the one hand, and the Merlin label members, on the other. First, Merlin and the distributors/aggregators typically receive [REDACTED] from members only if that member has opted-in. Second, Pandora paid Merlin a license fee directly that would vary, up to $375,000 (but in any event no less than $250,000), depending upon the Merlin members [REDACTED]. SX Ex. 13 ¶ 56 (Lexton WRT). Thus, SoundExchange avers that Merlin had economic incentives to complete the Pandora/Merlin Agreement and to urge its members to opt-in—incentives that were not necessarily consistent with the interests of its members.
SoundExchange avers that, even assuming the Pandora/Merlin Agreement otherwise had merit as a potential benchmark, Pandora has been unable to perform its contractual obligations. In this regard, SoundExchange notes the following problems that have hindered Pandora's ability to perform its contractual duties.
• Staffing and capacity constraints;
• lack of reporting and payments,
• a low fraction of labels who are receiving payments pursuant to deal;
• a low participation in the [REDACTED] program; and
• a low percentage of labels receiving steering at or above [REDACTED]%.
SoundExchange further notes that Mr. Herring candidly acknowledged that Pandora had waited until after it executed the Pandora/Merlin Agreement to determine the actual cost to Pandora of performing its contractual duties. 5/18/15 Tr. 4280 (Herring). Afterward, Pandora's Chief Scientist estimated that Pandora would incur an annual cost of $[REDACTED] for the “initial build” and $[REDACTED] annually in “ongoing support maintenance.”
SoundExchange notes that these implementation issues have “impacted negatively” the willingness of Merlin members who opted-in to consider entering into this license in any future period. For example, Mr. Van Arman testified that, [REDACTED] 6/5/15 Tr. 7158 (Van Arman);
For the reasons set forth below, the Judges find that the noninteractive benchmark proposed by Pandora is informative as to the rates they shall set in this proceeding for a particular segment of the noninteractive marketplace. That is, the Pandora benchmark is probative of
Pandora's proposed benchmark is premised principally on the provisions of the Pandora/Merlin Agreement. SoundExchange raises two principal challenges to Pandora's benchmark: (1) The ability,
In light of the importance of these two issues, the Judges first analyze these two contentious points, followed by a discussion of SoundExchange's other objections to Pandora's benchmark proposal.
SoundExchange argues that steering creates merely a “first mover” advantage for those licensors who are able to enter into steering arrangements before their competitors are able to obtain such advantages. This argument is seductively simple: In its essence, it is based on the elementary proposition that no noninteractive service can steer more than 100% of its sound recordings. To take a simple example, assume there are three Majors, U, S, and W, and one Indie, M. Assume the
However, the noninteractive licensee cannot promise all three other licensors, U, S, and W, the same 50% increase in plays via steering in the same contract period. If it did, U would realize a market share increase from 40% to 60%; S would realize a market share increase from 30% to 45%; and W would realize a market share increase from 20% to 30%. All four licensors, including M, would thus be promised 60% + 45% + 30% + 15% = 150%.
SoundExchange's point is that, by definition, it is mathematically impossible for a noninteractive licensor to allocate more than 100% of its plays. Thus, SoundExchange concludes, steering can only work in a non-statutory setting and, even then, never for all licensors.
This argument of course, in the static sense, is mathematically correct. But, in the dynamic sense, is it
[THE JUDGES]
Let's . . . take . . . the market we're dealing with here [and] address the first-mover criticism . . . that well, sure, you can steer to . . . record company A . . . but you can't steer to all of them because you can't play more than 100 percent of the music. Is it . . . the threat of steering that pushes everybody . . . towards their original percentages to avoid being that odd man out who was the holdout for the higher price?
That's exactly—yes, absolutely. The competitive outcome is when each of the record companies is at a rate where they're . . . not disadvantaged relative to the other guys . . . . This notion that you can't steer, the 100% thing, it's kind of offensive to an antitrust economist . . . because it's basically saying . . . price competition is some horrible thing.
The Judges find that steering in the hypothetical noninteractive market would serve to mitigate the effect of complementary oligopoly on the prices paid by the noninteractive services and therefore move the market toward effective, or workable, competition. Steering is synonymous with price competition in this market, and the nature of price competition is to cause prices to be lower than in the absence of competition, through the ever-present “threat” that competing sellers will undercut each other in order to sell more goods or services.
This process does not result, as some record industry witnesses suggested, in a “race to the
Because the Judges are utilizing the benchmark approach to rate setting—as both SoundExchange and Pandora endorse—the limits to steering (like the value of promotion and substitution) are implicit in (“baked-in”) the terms of the relevant benchmarks. That is, Pandora and Merlin entered into their agreement because each concluded that its steering terms were advantageous.
SoundExchange argues that, even if the threat of steering could cause a reduction in rates in the hypothetical noninteractive market, the Services have not provided any proof of an actual threat of steering in the direct noninteractive licensing market, but rather have presented only evidence of actual (not threatened) steering.
SoundExchange's argument is unpersuasive, for two reasons. First, the evidence shows that Merlin members opted-in to the Pandora/Merlin Agreement specifically because they anticipated that Pandora might enter
The Judges also find unpersuasive the criticism by SoundExchange that there is no record evidence of direct noninteractive agreements that were forged
Moreover, the Judges find the economic opinion expressed by Dr. Shapiro—equating steering with price competition—to be correct. The ability of noninteractive services to steer toward lower priced recordings (and, by necessity therefore, away from higher priced recordings) is the essence of price competition. With Pandora (and iHeart) having demonstrated the capacity and willingness to steer in this manner, it would be economically irrational for the other record companies (that had not agreed to steering) to maintain their position and incur losses. To assume that record companies would ignore the “opportunity cost” of steering away from their repertoires would be a fundamental economic mistake.
Dr. Shapiro's point regarding the economic “threat” posed, now that steering is technologically possible, can be made clear through a hypothetical example:
• Assume a Licensee was paying a market price of $0.0020 and historically (“naturally”) played 1,000,000 of its total number of songs from Licensor A, thus paying $2,000 to Licensor A.
• Now, assume the Licensee and Licensor A enter into a “steering” deal, whereby Licensee promises to play an additional 200,000 songs whose copyrights are owned by Licensor A, representing a 20% increase over the historical (“natural”) quantity of 1,000,000 noted above.
• In exchange, Licensee demands, and Licensor agrees, that Licensor A will receive less than $0.0020 per play, specifically, 10% less,
Compare the two scenarios:
• Before steering, the money exchanged equaled $2,000.
• After steering, the money exchanged is more, $2,160 (1,200,000 units × $0.0018).
That is clearly a benefit to Licensor A, who has made an additional $160 ($2160−$2000).
The corresponding benefit to Licensee arises from the fact that it can now—
How can Licensor B avoid this loss? By responding to this steering by competing on price and lowering its own price to $0.0018.
How can Licensee obtain the lower price of $0.0018 without any actual steering? By
Will there be a “race to the bottom?” No. The so-called “bottom” will be marked by the rate that equates: (1) An acceptable return to the Licensors given their costs (including opportunity costs) and the differentiated values of their repertoires; and (2) an acceptable return to the Licensee by steering as far as possible (but no further), as limited by the potential loss of revenue if steering interferes with revenue as a consequence of an inferior mix of sound recordings.
The Judges conclude, based on the record evidence and expert testimony, that the injection of steering into the hypothetical market provides for the “effective competition” that the law requires. Both Dr. Shapiro and Dr. Katz opined, and the Judges agree, that effective or workable competition arises when licensees have the reasonable (albeit still constrained) ability to select sound recording inputs based upon price.
The injection of steering into the hypothetical market can occur in two ways, as it has in this determination. First, as in the case of the Pandora/Merlin Agreement (and the iHeart/Warner Agreement discussed
It is important to emphasize the limited nature of this sort of effective competition. Price competition through steering does not diminish the stand-alone monopoly value of any one sound recording. Further, effective competition through steering does not diminish the firm-specific monopoly value of each Major's repertoire taken as a whole. Although Dr. Katz urged the Judges to reduce the statutory rate to eliminate that market power as well, Katz WDT ¶ 43, the Judges decline to do so. There is absolutely no record evidence to suggest that the market power that a Major enjoys individually by ownership of its collective repertoire is in any sense the consequence of improper activity or that it is being used
This holding must not be confused with the Judges' holding regarding the anticompetitive effects of the complementary oligopoly that exists among the Majors. Because the Majors could utilize their combined market power to prevent price competition among them by virtue of their complementary oligopoly power—as proven by the evidence of the pro-competitive effects of steering and the admissions of Universal and its agents discussed
The Judges do not agree with SoundExchange's criticism that the impact of steering is uncertain because listeners were unaware that such steering was being undertaken. The Judges reach this conclusion for three reasons.
First, there is no evidence that Pandora, or any noninteractive service, obtains and retains listeners by describing in any detail the technical methodology it uses to select songs. The purpose of a streaming service is to provide songs to listeners—if they enjoy the music they will be satisfied, if they do not enjoy the music they will be unsatisfied, to the commercial detriment of the service. While it is true that Pandora promotes its service as playing only the music the listener wants to hear, the proof of the pudding, so to speak, is in the listening, not in the puffery used in advertising.
Second, it is clear that Pandora has not taken any steps to conceal that it has engaged in such steering or that it intends to do so going forward. In the present proceeding, the parties had the ability, which they exercised with regularity, to enter into closed session to avoid public disclosure of commercial information they intended to maintain as confidential. However, at no time did Pandora attempt to close the proceedings to prevent the public from learning of the introduction of steering into its music delivery model. The Judges note that no competing service has advertised against Pandora or iHeart, attacking its use of steering. 5/19/15 Tr. 4775-76 (Shapiro). Thus, the evidence is not sufficient to indicate that Pandora would suffer an economic loss merely from listener awareness that Pandora engages in steering.
Third, although the extent of the steering may be economically significant to the licensors and licensees, the extent of steering at issue in this proceeding may have little noticeable impact on listeners. For example, consider the result if, hypothetically, a noninteractive service were to steer away from Major A (which had a pre-steering natural (historic) play rate of 40% on that service) by 12.5%.
Consider a consumer who listened to this noninteractive service for a period of time sufficient to hear 20 songs.
The one replacement song from another record company's repertoire would not be a random song, but rather would be the song the algorithm or tastemaker selected after disqualifying the eighth song from Major A.
Pandora's steering under the Pandora/Merlin Agreement, which guarantees a [REDACTED]% level of steering, has not resulted in any negative feedback or other deleterious consequence for Pandora. Likewise, the series of steering experiments conducted by Pandora indicated that Pandora could steer away from or toward a Major's repertoire by a change of ± 15% without causing a statistically significant change in listening behavior. McBride WDT ¶ 21.
Importantly, SoundExchange levels no criticisms at Pandora's steering experiments, save to make the point, rejected above, that the experiments did not reflect “real world” conditions.
SoundExchange argues that any benefits from steering must be treated like any other consideration in a direct license that is not authorized under the Act. That is, SoundExchange asserts that steering must be independently valued, and the separate value must be added to the statutory rate. The Judges disagree.
Steering, as Dr. Shapiro emphasized, is simply an example of price competition at work. Further, § 114(f)(2)(B) of the Act and prior decisional law require that the commercial rate reflect an “effectively competitive” market. Therefore, the value of steering is a
SoundExchange and Pandora both note that several additional elements of
The Judges do not find that the mere presence of other items of potential value serves to disqualify the Pandora/Merlin Agreement as a suitable benchmark. Benchmarks may be imperfect in the sense that they include features that are ill-suited for adoption in the statutory rate. To reject a proposed benchmark for that reason alone would be—to put it colloquially—throwing out the baby with the bathwater. Because there is no single undifferentiated market for the statutory service, benchmarks must be borrowed from other markets or sub-markets and will always be imperfect to some degree and either in need of adjustment or limited in their applicability. But to ignore a benchmark for that reason alone would be an inappropriate indictment of the benchmarking process itself.
Further, Dr. Shapiro testified that he found these elements of additional consideration to either: (1) Provide joint value to Pandora as well as Merlin members; (2) be unlikely to be achieved; or (3) be already incorporated into his valuation. There was no sufficient rebuttal by SoundExchange witnesses to these points. As the Judges explain
Additionally, SoundExchange's assertion that the additional items created sufficient value to offset the lower rate in the Pandora/Merlin Agreement strikes the Judges as economically irrational. If the supposed additional value of the non-steering items in the Pandora/Merlin Agreement equals the difference between the non-steered rates and the lower steered rates, then what is the point of the parties incurring the transaction costs associated with negotiating such a deal? Why would Pandora commit to incur significant expenses to begin to set up an infrastructure necessary to perform the steering function?
In rebuttal to Dr. Shapiro's item-by-item consideration of the potential additional items of value in the Pandora/Merlin Agreement, SoundExchange did not introduce expert testimony to establish alternative values. Rather, SoundExchange relied on the narrative testimony of industry witnesses Glen Barros, Darius van Arman and Simon Wheeler to support the position that these other items had some
More particularly, although Merlin has the ability to negotiate and evaluate agreements in a sophisticated manner, it failed to value these additional elements of consideration.
Additionally, one Merlin member presented as a witness by SoundExchange, Glen Barros, President and C.E.O. of Concord Record Group, testified that “in all likelihood” he would have opted-in to the Pandora/Merlin Agreement
Although Mr. Barros represents only one Indie, SoundExchange selected him as a representative of the Indies' position regarding the value of the Pandora/Merlin Agreement. Clearly, SoundExchange could not present the testimony of more than [REDACTED] opting-in Merlin members, and the Judges therefore find the testimony against interest by this Merlin member selected by SoundExchange to be particularly probative.
Additionally, a May 15, 2014 internal email written by Mr. Lexton appeared to the Judges to reference Merlin's strategy to attempt to obfuscate the usefulness of the Pandora/Merlin Agreement as a benchmark in this proceeding:
In a subsequent email to Pandora dated June 3, 2014, Mr. Lexton made Merlin's position in this regard even more explicit, by asking Pandora to include the following proposed language in the final agreement:
The foregoing emails and testimony, combined with Merlin's and SoundExchange's failure to separately value the other elements of consideration either during negotiation or during the proceeding, strongly indicate to the Judges that Merlin found the value in the Pandora/Merlin Agreement to lie in the steering—that is, the trade-off of more plays at a lower rate for more total revenue.
In sum, if there was any additional value to Merlin from the other items sufficient to reduce the overall value of steering as adopted for a statutory license, the record evidence fails to provide a basis for such an adjustment. For these reasons, the Judges decline to increase the Pandora/Merlin benchmark to reflect any extra-statutory consideration that was not already accounted for by Dr. Shapiro.
The Judges reject SoundExchange's argument that Merlin is not sufficiently representative of the independent sector of the sound recording industry. The Judges rely on several facts in reaching this conclusion.
First, the Judges note that between [REDACTED] and [REDACTED] Merlin members, out of approximately [REDACTED] total members opted-in to the Merlin Agreement. Thus, it is accurate to state that the evidence regarding the Pandora/Merlin Agreement relates—to use Dr. Talley's term—to [REDACTED] to [REDACTED] “dyads” between licensors and a licensee. The Judges find this quantity of contracts to be significant and probative with regard to: (1) Steering rates that Indies would accept; and (2) the principle that steering can be utilized as means of price competition in the noninteractive market.
In addition, the Judges do not find persuasive SoundExchange's argument that a majority of Merlin members who opted-in to the Pandora/Merlin Agreement did so through their agreements with aggregators and/or distributors. These opting-in members delegated the decision whether to opt-in to these distributors and aggregators and there was certainly no evidence or testimony to suggest that these arrangements were coerced or that any Merlin members who opted-in through this process disagreed with the decision. Thus, the decision by Merlin members to delegate the decision whether to opt-in to its agents is a component of the business model these Merlin members chose to follow. The Judges cannot criticize the decision of these Merlin members, and by extension, call into question their intention to be bound by the Pandora/Merlin Agreement, merely because they have arranged their licensing affairs in this manner. By way of analogy, just as SoundExchange's criticism of Pandora's business model is not relevant to the setting of rates in this proceeding, the Judges do not find relevant the business judgments of Merlin members to utilize aggregators and/or distributors as their agents in this regard.
Relatedly, the Judges find that the fact that Merlin negotiated collectively on behalf of its members does not diminish the value of Merlin as a party capable of entering into an agreement that is
Merlin's purpose is to allow independent record companies to benefit from direct deals negotiated by Merlin on a collective basis. As such Merlin is a one stop shop for recorded music rights licensing. It represents recorded music rights owned and/or controlled by independent record labels and distributors who are eligible and choose to join Merlin. . . . Merlin's core remit is to represent its members in negotiating licenses with digital music services in the hope of overcoming market fragmentation issues that have historically challenged the independent music sector particularly in the digital domain.
Further, the Judges reject SoundExchange's assertion that Merlin as a collective had different incentives than its members that somehow diminish the value of the Pandora/Merlin Agreement as a benchmark. These incentives included financial and status benefits to Merlin if its members opted-in, which were distinct from whatever benefits individual members might obtain by opting in to the Pandora/Merlin Agreement. The Judges understand this criticism to be based upon the classic principal-agency problem, in which the interests of the principals (Merlin members) may not be fully aligned with the interests of the agent (Merlin). However, this is a common problem when principals delegate functions to agents. Unless the evidence demonstrates that the agent (Merlin) has engaged in a breach of duty toward its principals (Merlin members), the lack of a complete alignment of interests does not invalidate the benchmark status of the agreement entered into by the principal. Indeed, because this is the principal-agent arrangement that the Merlin members
The Judges also reject the criticism that Merlin has not uniformly represented its members because Pandora has used its editorial discretion to exclude (as of the time of the hearing) from its playlist sound recordings owned by some of the opting-in Merlin members. There is no allegation that Pandora promised to make all sound recordings available on its service, and therefore each Merlin member accepted the risk that Pandora, in its editorial judgment, might not include some or all of its sound recordings.
Finally, the Judges do not find merit in SoundExchange's argument that Merlin is not a sufficient representative of Indies in the marketplace. SoundExchange did not produce any witnesses from Indies who were not members of Merlin to testify to this effect. Rather, SoundExchange produced witnesses whose Indie record companies
The Judges reject SoundExchange's assertion that Pandora had significant market power that caused the effective rates in the Pandora/Merlin Agreement to be lower than effectively competitive rates. Initially, the Judges note that this assertion is not supported by any empirical market data, analysis, or comparison with other negotiated comparable interactive rates.
More importantly, the issue of Pandora's “market power,”
Pandora is the largest noninteractive webcaster. I have considered specifically whether Pandora had undue market power in its negotiations with Merlin. In the language of antitrust economists, I have considered whether Pandora has monopsony power over Merlin. Pandora's share of listening among noninteractive webcasters is
There is an additional and separately sufficient reason why SoundExchange's claim of Pandora's monopsony power cannot be adopted. The assertion that Pandora exercised market power in these negotiations ignores the fact that Merlin did not have to accept any of Pandora's terms—Merlin and its members could have fallen back on the Pureplay statutory settlement rates rather than accede to any demand by Pandora. That is, by this particular assertion, SoundExchange is assuming
Therefore, the Judges reject the assertion that Pandora exercised undue market power in negotiating the effective rates contained in the Pandora/Merlin Agreement.
Two of SoundExchange's witnesses characterized the Pandora/Merlin Agreement as an “experiment,” as distinguished from an actual marketplace agreement. The Judges reject this attempt to characterize this real agreement, involving the exchange of actual consideration, as an “experiment.”
An economic experiment is undertaken under controlled laboratory conditions, as distinguished from
SoundExchange's witnesses may have used the word “experiment” to suggest a tentative or impermanent relationship between Pandora and Merlin. If so, that criticism proves too much, as all benchmark agreements—indeed virtually all agreements—could be characterized as “experiments,” in that they have stated durations, and the parties are free to vary the terms of their economic relationship after the so-called “experiment” has expired. In this sense, the word “experiment” is misused to cast a wide disqualifying net on all benchmark agreements.
Even assuming that the Pandora/Merlin Agreement is, in principle, a useful benchmark, SoundExchange asks the Judges to look to Pandora's alleged poor performance of its obligations under the Pandora/Merlin Agreement. As detailed
Pandora does not dispute that it had not (as of the hearing date) been able to implement all the benefits promised in the Pandora/Merlin Agreement. However, the Judges note that SoundExchange did not produce any correspondence from Merlin or its members complaining about the failure of Pandora to perform, or any threat to terminate the agreement or sue Pandora for nonperformance. Rather, the evidence suggests that Merlin recognized that the structuring of performance needed to be an ongoing and collaborative effort. As Pandora's Chief Financial Officer, Mr. Herring, testified:
More importantly, the evidence indicates that Pandora has performed its core obligation under the Pandora/Merlin Agreement: The increase in spins of Merlin recordings, in the aggregate, by at least [REDACTED]%, above their collective “natural” rate. In fact the evidence shows that Pandora is overspinning Merlin member recordings collectively by [REDACTED]%. On the individual Merlin label level, the results have been uneven—some Merlin labels have been overspun by [REDACTED]- [REDACTED]% of their natural rate,
However, the only specific promise by Pandora of increased spins in the Pandora/Merlin Agreement was its promise [REDACTED] to increase Merlin spins collectively by [REDACTED]%, and it appears undisputed that Pandora has performed this obligation and, in fact, has far exceeded the [REDACTED]% minimum. With regard to the underspinning of individual Merlin Labels, Pandora represented in the Pandora/Merlin Agreement only to [REDACTED] to increase spins by at least [REDACTED]% above the natural rate. Thus, the individual members objectively cannot complain about the level of overspinning at any point in time, unless they can also claim that Pandora had not been [REDACTED]. As noted above, SoundExchange did not produce any evidence suggesting that any individual members had lodged such a complaint.
With regard to SoundExchange's claim that Pandora has incurred substantial unexpected capital costs in implementing a steering system, Mr. Herring testified that these investments, although motivated in the short-term and in part by the Merlin Agreement, in fact laid the groundwork for Pandora to implement steering more broadly across the non-interactive webcasting market. 5/18/15 Tr. 4313-17 (Herring) (“some of these costs are fixed costs to be amortized over time with the anticipation of being applied to other direct licenses with other record companies, and expensed at the time that the costs are incurred, and therefore “spread over those deals.”). Thus, the existence of these costs does not establish any fact to contradict the Judges' finding that the Pandora/Merlin Agreement is a useful benchmark. In fact, Pandora's commitment to incur substantial build-out costs to create the steering architecture underscores that this agreement (and the iHeart/Warner Agreement) represents the cutting-edge of a technological advance that can ameliorate the anticompetitive effects of a complementary oligopoly.
The Judges find this SoundExchange criticism to be meritorious. These steering experiments reflect only a
Moreover, Pandora's own witness testified in a manner that contradicts Pandora's attempt to bootstrap the Pandora/Merlin rates onto the Majors. Mr. Herring, Pandora's C.F.O., testified that Pandora would have to offer a higher steering-based rate to a Major than Pandora obtained in the Pandora/Merlin Agreement. 5/18/15 Tr. 4253 (Herring). The Judges have noted previously that the Majors' repertoires must be distinguished from those of the Indies.
Therefore, the Judges consider the rate established by the Pandora/Merlin Agreement to establish only one guidepost (
SoundExchange argues that any attempt by a noninteractive service to impose steering on the record companies would be rebuffed by the Majors. In particular, SoundExchange argues that the record companies would respond to a steering threat by: (1) Withholding their entire repertoires; (2) imposing Anti-Steering or “Most Favored Nation” contract clauses; and/or (3) requiring up-front lump sum royalty payments from the noninteractive services.
A Major could respond to a threat of steering by threatening to withhold its entire repertoire from that noninteractive service. There appears to be a consensus that the repertoire of each of the three Majors is a “must have” in order for a noninteractive service to be viable.
However, the ability of the Majors to utilize such a boycott to defeat steering would be a function of their complementary market power. Simply put, demands by the Majors to prevent steering by insisting that a noninteractive service not deviate from an historical (“natural”) division of market shares would be a classic example of anticompetitive conduct.
While the Majors' individual market power is not in itself necessarily improper, the hypothetical exercise of that power in this manner in the noninteractive market would be antithetical to the “effective competition” requirement inherent in the § 114(f)(2)(B) standard. That is, each Major may well be entitled by its firm-specific market power to higher rates than the Indies, but the Majors cannot bootstrap that power into a further capacity to reap the benefits of a complementary oligopolist by brandishing such power as a sword against steering.
Thus, in the present case, the hypothetical use by one or more of the Majors of its power to boycott a noninteractive service—one that had sought to inject some price competition into the market via steering—would undermine the “effective competition” standard that the D.C. Circuit, the Librarian of Congress and the Copyright Royalty Judges have declared to be an essential element of the § 114(f)(2)(B) standard.
In the interactive market, the Majors commonly include anti-steering or MFN clauses in their agreements with the services. The Judges find that such clauses have no purchase vis-à-vis steering in exchange for lower rates in the
* * *
* * *
This testimony underscores the point that the Majors' capacity to undermine “price competition-via steering” is a function of their complementary oligopoly power. Once again, the Judges do not find that the mere size of the Majors or their share of the noninteractive market is in itself anticompetitive (especially on this record), but the Judges find that the ability of the Majors to
SoundExchange asserts that a record company could frustrate an attempt at steering by requiring noninteractive services to pay their royalties up-front in a lump sum, instead of on a per-performance basis. Such a lump-sum requirement would frustrate steering in the following manner: If a licensee has already paid Record Company A a required, large up-front fee (equal to its natural/historic play level multiplied by the old, higher per-play rate) then the marginal cost going forward to the noninteractive service of playing a sound recording from Record Company A would be zero. By contrast, Record Company B—even if it offered a reduced steering rate—would still be insisting on a rate greater than the marginal rate of zero the licensee would be paying to Record Company A. The noninteractive service would thus be compelled to either pay the up-front lump sum and lose the benefits of price competition, or refuse to pay the lump sum and lose access to 100% of the repertoire of Record Company A.
This up-front lump sum strategy in actuality is merely another way in which a Major could bootstrap its otherwise unobjectionable market power to preserve
In sum, each of the three contract devices relied upon by SoundExchange to defeat steering are dependent upon the exercise of market power to preserve the power of complementary oligopoly, which would thwart effective competition in the noninteractive market. Thus, all three contracting devices would be inconsistent with the statutory direction to set rates, based on competitive information, that would be set between willing buyers and willing sellers in an effectively competitive marketplace in the absence of a statutory license.
For the foregoing reasons, the Judges will utilize Pandora's steering-based benchmark as a guidepost to establish the zone of reasonableness for the noninteractive royalty rates that would be paid by Indies in the ad supported (free-to-the listener) and subscription markets. Pandora has proposed two sets of such benchmarks, depending upon the level of steering the Judges find to be appropriate for rate-setting purposes.
The Judges find that this guidepost should be established by applying a rate
iHeart proposes a per-play rate of $0.0005 for the § 114 license. In support of this proposal, iHeart relies on the analysis undertaken by its expert witnesses, Drs. Daniel Fischel and Douglas Lichtman, of rates set forth in certain agreements entered into by iHeart in the market for noninteractive services.
Effective October 1, 2013, iHeart and Warner entered into an agreement (the iHeart/Warner Agreement) that addressed,
The iHeart/Warner Agreement incorporates the same economic steering logic as the Pandora/Merlin Agreement. Specifically, at the time of the execution of the iHeart/Warner Agreement, Warner's actual share of iHeart's custom noninteractive webcasts was approximately [REDACTED]%. However, under the iHeart/Warner Agreement, iHeart is obligated to [REDACTED]. Drs. Fischel and Lichtman concluded that this provision created an incentive for iHeart to increase Warner's share of performances substantially [REDACTED]. Fischel/Lichtman AWDT ¶ 36.
The iHeart/Warner Agreement also contains the following additional elements that, according to iHeart: (1) Were not independently valued by the parties on a monetary basis; (2) benefited both parties; and (3) therefore had an uncertain net value:
• Warner's grant to iHeart of sound recording rights [REDACTED];
• iHeart's commitment to provide Warner with no less than [REDACTED] percent of total airplay devoted to a music advertising campaign that iHeart provides on its webcast stations, known as the Artist Integration Program (“AIP”);
• Warner's [REDACTED] right to [REDACTED] and iHeart's [REDACTED] right to [REDACTED]); and
• iHeart's “most favored nation” protection
Fischel/Lichtman AWDT ¶ 38.
Drs. Fischel and Lichtman described the [REDACTED] as an “insurance policy” that benefited iHeart in the event it would [REDACTED]. Likewise, they described the AIP provision as an “insurance policy” that benefited Warner, because iHeart's commitment to continue to provide the AIP benefit meant that Warner did not have to assume the risk that iHeart might charge Warner for the right to access the benefits of AIP.
Drs. Fischel and Lichtman recognized the difficulty in quantifying the values of what they described as these “insurance policy” equivalents. However, they aver that neither party assigned any values to these (and the other) non-rate terms and that the
We followed the . . . real-world example of the parties . . . who did not price any of these terms. . . . [T]here was no separate pricing in the agreement or separate valuation in the agreement in terms of the spreadsheets . . . that I reviewed as background for the contract. . . . For that reason . . . the best answer, given the real-world data that we have, is to place a net value of zero on them because that's what the parties themselves did.
Moreover, according to iHeart, even SoundExchange's economic expert, Dr.
However, iHeart does not conclude from the foregoing that the iHeart/Warner Agreement sets forth a usable benchmark rate that mirrors the stated rates of $0.[REDACTED] to $0.[REDACTED], or even the purported lower rates of $0.[REDACTED] to $0.[REDACTED] resulting from the [REDACTED] adjustment applied by Drs. Fischel and Lichtman (as discussed
In an attempt to correct for this alleged defect, Dr. Fischel conceptualizes the Warner plays on iHeart as comprising two distinct economic bundles. Dr. Fischel states:
As an economic matter, the [iHeart]-Warner agreement reflects a bundle of two distinct sets of rights. The first set provides a license for iHeartMedia to play the same number of Warner performances as it would have played absent the agreement. The second set of rights provides a license for iHeartMedia to play additional Warner performances, above and beyond those it would have played absent the agreement.
Accordingly, Dr. Fischel opines that compensation for the first “bundle” of rights is directly affected by the existing statutory rate, and therefore “provides essentially no information about the rate willing buyers and sellers would negotiate in the absence of government regulation.”
However, Dr. Fischel opines that the second “bundle” he conceptualizes is “highly relevant to what willing buyers and willing sellers would negotiate if unconstrained by government regulation.”
Thus, Dr. Fischel needed to distinguish between the two bundles that he had conceptualized, which required him to consider the projected number of Warner plays in each bundle. To perform this analysis, he relied upon a set of projections that iHeart's Board of Directors used when evaluating and approving the iHeart/Warner Agreement. Fischel/Lichtman AWDT ¶ 40 (projections also served as basis for iHeart Board's approval of
The Today's Growth model projected that iHeart would play [REDACTED] total performances of all labels' sound recordings over the [REDACTED] term of the agreement. Fischel/Lichtman AWDT ¶ 41 and Ex. A thereto (“Projected Performances During Initial Term of iHeartMedia Agreement with Warner”); IHM Ex. 3034 at 170. iHeart estimated Warner's share of those performances under two key scenarios: (1) The [REDACTED] scenario, which reflected iHeart's expectations if no agreement with Warner was reached; and (2) the “Warner Direct License Terms” scenario, which reflected its projections under the terms and conditions of the Warner agreement as signed. Fischel/Lichtman AWDT ¶ 42 and Ex. B thereto (“Projected iHeartMedia/Warner Royalty Rates”); IHM Ex. 3034 at 172.
Under scenario (1), iHeartMedia expected Warner music to constitute [REDACTED]% of total performances, or [REDACTED] performances, on the iHeart custom service. Under scenario (2), iHeart expected to increase Warner's share of performances to [REDACTED] percent, and thus expected to play [REDACTED] Warner performances over the duration of the agreement. Fischel/Lichtman AWDT ¶ 42; IHM Ex. 3034 at 172 (“Projected iHeartMedia-Warner Royalty Rates”).
Under scenario (1),
Dr. Fischel then divided the total expected compensation under the Today's Growth Model ($[REDACTED]) by the total number of performances projected in that model ([REDACTED]). This calculation projected an average per-play rate of $0.[REDACTED], rounded to $0.[REDACTED]. Fischel/Lichtman AWDT ¶43; IHM Ex. 3034 at 172 (“Projected iHeart Media/Royalty Rates”).
Even before Dr. Fischel attempted to determine his “
Additionally, Drs. Fischel and Lichtman opined that this $0.[REDACTED] rate needed to be adjusted downward for a [REDACTED] adjustment, to reflect the fact that, under the iHeart/Warner Agreement, [REDACTED] are not subject to a royalty payment by iHeart to Warner.
Dr. Fischel then turned his analysis toward the calculation of his so-called “incremental rate.” He noted the simple math demonstrating that, according to the Today's Growth Model, the difference in the number of Warner
Dr. Fischel then divided the $[REDACTED] additional revenue by the additional [REDACTED] plays to
As noted at the outset of this section, the iHeart/Warner Agreement contains a greater-of rate structure. However, Drs. Fischel and Lichtman declined to incorporate any greater-of formula into their rate structure and they did not include any percentage-of-revenue alternative rate in their proposed benchmark. Dr. Lichtman explained this deviation from the iHeart/Warner Agreement: “[N]o one thought that provision would be binding. So they have a number that both parties looked at and said that number would never actually be used in the real world, so who cares what the number is . . ..” 5/15/15 Tr. 4016-17 (Lichtman);
iHeart also relies upon its separate agreements with 27 Indies that, as of July 2014, accounted for approximately [REDACTED] percent of performances on its custom service. Fischel/Lichtman AWDT ¶ 57 and Ex. C thereto; IHM Exs. 3340, 3342, 3343, 3345, 3347, 3349, 3351-3370, 3642. Despite this relatively small percentage of plays (compared to Warner), Drs. Fischel and Lichtman opine that “these 27 deals provide important additional evidence as to the rates negotiated by willing buyers and willing sellers.” Fischel/Lichtman AWDT ¶ 57.
The principal custom noninteractive rate in these 27 agreements is [REDACTED]. Indeed, the 27 Warner/Indies Agreements contain the following provision:
Each of these 27 iHeart/Indies Agreements contains a [REDACTED]-year term.
As in the iHeart/Warner Agreement, the iHeart/Indies Agreements contain various additional items, some of which iHeart claims inure to its benefit, and some of which benefit the labels. iHeart points, by way of example, to the provision in all 27 agreements that iHeart received a license for [REDACTED] and thereby avoided the risk of [REDACTED] Additionally, in many of those agreements, the Indies agreed [REDACTED]. Fischel/Lichtman AWDT ¶ 62.
As they analyzed the iHeart/Warner Agreement, Drs. Fischel and Lichtman concluded that the value of these terms cannot be determined in isolation, and found that there was no evidence indicating that the parties had explicitly assigned value to them when analyzing whether to enter into these 27 agreements. Accordingly, they concluded that it is appropriate to assign a zero net value to the non-pecuniary terms.
Therefore, Dr. Fischel proceeded to derive a so-called “incremental rate” for the 27 iHeart/Indies Agreements. He determined that, between 2012 and 2014, and
Dr. Fischel then determined that, after the execution of these 27 iHeart/Indies Agreements, total performances would increase to [REDACTED] (of which [REDACTED] were custom webcasts) and total royalties would increase to $[REDACTED] (of which $[REDACTED] was for custom webcasts), resulting in an
As with the iHeart/Warner analysis, Dr. Fischel then calculated his so-called “incremental rate” by applying his “two bundles” approach. He noted that iHeart expected to play an additional [REDACTED] performances and expected to pay $[REDACTED] more in royalties. This incremental difference yielded the so-called “incremental rate” of $0.[REDACTED] ($[REDACTED]/[REDACTED] plays). Fischel/Lichtman AWDT ¶ 68; IHM Ex. 3034 (Fischel/Lichtman AWDT, Ex. D thereto).
Unlike the iHeart/Warner Agreement, these 27 Warner/Indies Agreements were not supported by an internal projection of expected increased plays, such as the “Today's Growth” model upon which Dr. Fischel relied for his iHeart/Warner “incremental” analysis. Rather, Dr. Fischel testified that he and Dr. Lichtman “assumed (consistent with our understanding) that iHeart believed that, after signing each of these deals, it would increase each label's share of all webcasts ([REDACTED]) by [REDACTED] percent.” Fischel/Lichtman AWDT ¶ 66. Apparently, Dr. Fischel did not use iHeart's or his own “projections” of increased performances, as he did for his iHeart/Warner analysis, but rather “assume[d] iHeart approximately met its projections for . . . custom performances,” and therefore “the projections in [this] category[y] [are] equal to the
Drs. Fischel and Lichtman concluded from the foregoing that the $0.[REDACTED] “incremental rate” that they estimated for the 27 iHeart/Indies Agreements “demonstrates our main conclusion, regarding the $0.0005 per-performance rate.” Fischel/Lichtman ¶ 69.
SoundExchange attacks the iHeart rate proposal on six separate fronts. First, SoundExchange sets forth an overview that purports to provide a different and more accurate understanding of the terms of the iHeart/Warner Agreement, compared with the presentation put forth by iHeart. Second, SoundExchange
SoundExchange begins its critique by referring to the negotiation period
• When SoundExchange turns its attention to the several non-rate and non-steering aspects of the iHeart/Warner Agreement, it notes the following provisions that were essentially ignored by iHeart. iHeart agreed to provide to Warner the greater of [REDACTED]% of all AIP inventory that iHeart offers in the marketplace and AIP having a “fair market value,” as stated in the iHeart/Warner Agreement, of at least $[REDACTED] per agreement year. SX Ex.33 at 19-20 § 5(a).
• In addition to this “[REDACTED] AIP,” iHeart agreed to provide Warner with another advertising opportunity, to participate in two “[REDACTED]” campaigns each year. This “[REDACTED]” guarantees at least [REDACTED] insertions of ads in duration up to [REDACTED] seconds each on iHeart's terrestrial stations for artists selected at Warner's discretion. Each advertisement also must include a [REDACTED]. SX Ex. 33 at 19-20 § 5(a); 81, Exhibit F. Warner calculated the value of a single [REDACTED] campaign at $[REDACTED], yielding a combined value for [REDACTED] such campaigns of close to $[REDACTED] over the initial term of the agreement. SX Ex. 32 at 14 n.9 (Wilcox WRT); 6/3/15 Tr. 7403 (Wilcox).
• iHeart also agreed to pay royalties to Warner for [REDACTED]. SX Ex. 33 at 10 § 1(pp); SX Ex. 32 at 14 (Wilcox WRT).
• iHeart agreed to pay Warner a $[REDACTED] fee for a [REDACTED] provision, the [REDACTED] agreement, which iHeart requested be in a separate agreement but ultimately was included in the iHeart/Warner Agreement. 6/3/15 Tr. 7387 (Wilcox).
Through testimony at the hearing, SoundExchange and Warner asserted that Warner perceived the additional items it received, combined with the rate and steering terms, as greater than what it would have received under the statutory license. 5/7/15 Tr. 2370 (Wilcox) (Warner received “a package of consideration that is material and greater and different in positive ways than what we would be obtaining just through a compulsory statutory deal.”). Further, Mr. Wilcox testified that he did not think this “deal” would “go forward on the existing terms if one of these were missing.” 6/3/15 Tr. 7416 (Wilcox). However, SoundExchange did not proffer evidence or testimony that was contemporaneous with the negotiation of the iHeart/Warner Agreement that was probative as to whether Warner required the other contract terms in order to avail itself of the rate and steering terms. SoundExchange notes, however, (regarding the additional contract items of potential value to Warner) that iHeart did not produce a fact witness who testified regarding the actual value of these terms to iHeart.
SoundExchange also notes, as did iHeart, that the latter also received additional contractual consideration beyond the right to perform Warner's sound recordings under the agreement.
However, despite the absence of any actual values being placed by the parties on these additional items, Mr. Wilcox concluded that the
SoundExchange also notes in this context, as it did in its opposition to Pandora's rate proposal, that the steering elements of the iHeart/Warner Agreement provide only “first mover” advantages” that would be “mathematically impossible” to replicate across the industry. 5/7/15 Tr. 2374 (Wilcox); Rubinfeld CWDT at 46 ¶ 183; 6/2/15 Tr. 7239 (Cutler). Moreover, SoundExchange noted that iHeart found its ability to steer toward any particular record company to be limited. As noted in the Judges' discussion of the Pandora rate proposal, SoundExchange asserts that, when iHeart tried to [REDACTED] it created “challenging listening experiences.” For example, a listener's seeded “[REDACTED] Radio Station” [REDACTED] turned into a
SoundExchange begins its critique with these undisputed assertions:
• None of these agreements—or any other agreement submitted by any other party—has $0.[REDACTED] as the stated per-performance rate or within any range of stated rates.
• There is not a single document in evidence showing that any parties—not just Warner and iHeart—ever had a “meeting of the minds” as to a rate of $0.[REDACTED] per-performance.
• There is not a single communication between iHeart and Warner citing a rate of $0.[REDACTED] under the iHeart-Warner agreement.
• No internal iHeart document shows such a rate for the iHeart-Warner agreement.
• There is no evidence in the record showing that a willing copyright owner would agree to license the performance of its sound recordings at a rate of $0.[REDACTED].
• None of the other economic experts who testified used such an approach in his written testimony.
Next, SoundExchange takes substantive aim at the “two bundles” of
The fundamental problem with this “incremental” approach, according to SoundExchange, is that it artificially and erroneously divides the royalty payments by breaking the single actual bundle of performances under the agreement into two hypothetical bundles. According to SoundExchange, that approach artificially and erroneously divides consideration into separate bundles that the parties did not negotiate. To make the point, Dr. Rubinfeld, on behalf of SoundExchange, applied an analogy: In a “buy one, get one free” transaction, the price of the second product is not zero; the second product could not be obtained without paying the full price for the first. Accordingly, the appropriate price for each of the two products is not the “incremental price” of the second item, but rather the average price of the two items. Rubinfeld CWRT at 6, ¶ 24.
SoundExchange also notes that Drs. Fischel and Lichtman analyzed the Pandora/Merlin Agreement through the lens of their so-called incremental approach and concluded that the proper rate derived from that agreement—for use as the statutory benchmark—is between $0.0002 and
For these reasons, SoundExchange asserts that the so-called
SoundExchange criticizes Drs. Fischel and Lichtman for failing to make a sufficient attempt to attach monetary values to provisions in the iHeart/Warner Agreement.
Rather, SoundExchange asserts the record reflects that this “net zero value” conclusion is inaccurate. The “record” to which SoundExchange cites to support this position is a conclusory statement made by Warner's testifying executive, Mr. Wilcox, who stated that the net value of the non-royalty rate provisions is “heavily weighted to the Warner Music Group.” 6/3/15 Tr. 7385 (Wilcox).
SoundExchange also takes issue with iHeart's claim, as asserted by Dr. Fischel, that the absence of any projections or spreadsheets detailing the value of these additional items is evidence that the parties did not assign values to them. However, SoundExchange acknowledges that “when the Judges asked Mr. Wilcox whether Warner had assigned a number value to . . . many of these provisions,” his “consistent” response was that he “could not be certain” of the number value. SX PFF ¶ 827.
Among the non-royalty and non-steering elements within the iHeart/Warner Agreement, SoundExchange emphasizes iHeart's failure to adjust its benchmark to reflect the value of two items referred to
SoundExchange notes that the iHeart/Warner Agreement
Additionally, SoundExchange points to internal iHeart documents in which Bob Pittman, iHeart's C.E.O., asked of his employees, with regard to AIP, [REDACTED]” SX Ex. 207. SoundExchange further notes that, in an attempt to bridge differences in the ongoing negotiations, Mr. Pittman suggested that iHeart asked Warner if AIP has value to Warner, because it has value to iHeart. SX Ex. 1372. Additionally, SoundExchange points to Mr. Wilcox's written and oral testimony, in which he claims to recall that [REDACTED] indicated that iHeart intended to [REDACTED], but he cannot identify a document confirming that alleged representation by [REDACTED]. Wilcox WRT ¶ 23, 6/3/15 Tr. 7460-61 (Wilcox)
SoundExchange also points to numerous documents in which iHeart confirms the substantial value to record companies of AIP participation.
Based on such reasoning, iHeart estimated the quantity of AIP to be given to Warner not only [REDACTED], but also [REDACTED], as set forth on iHeart's rate card.”
For these reasons, SoundExchange avers that iHeart erred in declining to attribute value to AIP in its iHeart/Warner benchmark.
According to SoundExchange, the value of [REDACTED] is different from [REDACTED] AIP in a way that enhances record company promotional programs on iHeart. First, unlike AIP, Warner was not [REDACTED], and iHeart did not [REDACTED]. 6/3/15 Tr. 7405 (Wilcox).
The iHeart/Warner Agreement's [REDACTED] provision guarantees Warner at least [REDACTED] of up to [REDACTED] for [REDACTED] on all of iHeart's [REDACTED] of [REDACTED] chosen by Warner. SX Ex. 33 at 19-20 § 5(a);
Warner did not attempt to value [REDACTED] contemporaneous with the negotiations, and did not include a stated value for [REDACTED] in the iHeart/Warner Agreement. SoundExchange did not utilize an expert to value [REDACTED] in the hearing. However, for this proceeding, a non-expert, Mr. Wilcox, the Warner executive, calculated his understanding of the value of a [REDACTED] campaign at $[REDACTED] per year, or approximately $[REDACTED] for the [REDACTED] campaigns to which Warner was entitled over the initial term of the agreement. Wilcox WRT at 14 n.9; 6/3/15 Tr. 7403 (Wilcox). SoundExchange notes that no iHeart fact witness disputed this attempted valuation.
For these reasons, SoundExchange disputes the decision by Drs. Fischel and Lichtman to assign no independent value to the [REDACTED] benefits contained in the iHeart/Warner Agreement.
Another non-royalty/steering provision identified in the iHeart/Warner Agreement is a reference to a separate agreement—the “[REDACTED] Agreement” between the parties. SoundExchange avers that Drs. Fischel and Lichtman wrongly omitted the value of this $[REDACTED] payment from their calculation. According to SoundExchange, this omission was improper because Mr. Wilcox testified that “it was “worth . . . $[REDACTED]” 6/3/15 Tr. 7385 (Wilcox). Mr. Wilcox further testified that iHeart had requested that this “[REDACTED] transaction be set forth in a separate agreement, but Warner preferred that it be included—as it ultimately was—in the iHeart/Warner Agreement. 6/3/15 Tr. 7387 (Wilcox). SoundExchange also notes that iHeart does not dispute that the $[REDACTED] was executed on the same day. 6/2/15 Tr. 7304 (Cutler); 5/22/15 Tr. 5505 (Fischel). Further, SoundExchange points out that none of iHeart's fact witnesses testified that the $[REDACTED] was
SoundExchange acknowledges that the “[REDACTED] Agreement” contains an [REDACTED].
In sum, when Dr. Rubinfeld and SoundExchange account for all of the value they claim was missing from the valuation undertaken by Drs. Fischel and Lichtman, they conclude that under iHeart's “Today's Growth” model, the benchmark per-play rate would equal or exceed $0.[REDACTED].
In this proceeding, SoundExchange did not rely in its direct case upon any of Warner's projections reflecting its expectations at the time the iHeart/Warner Agreement was negotiated and executed. Rather, SoundExchange relies upon an analysis by Dr. Rubinfeld of available data regarding performances and royalties paid during the first eight months of the iHeart-Warner agreement—from October 2013 to May 2014. Dr. Rubinfeld relied upon this slice of performance data, rather than the expectations of the contracting parties, because he found that “performance data reflect actual experiences in the marketplace [and] [t]he most recent performance data is likely to be the best predictor of what will happen in the immediate future.” Rubinfeld CWRT ¶ 27. However, Dr. Rubinfeld also cautioned that “review of a longer period of performance data may offer additional value if the review reveals important trends in the industry.”
From the 8-month slice of data that he reviewed and about which he opined, Dr. Rubinfeld calculated an alternative average per-play royalty rate. Rubinfeld CWDT at 57-59, ¶¶ 229-236); SX Ex. 64 (Rubinfeld App. 1b, backup calculations).
SoundExchange avers that Dr. Rubinfeld's calculations as they relate to custom webcasting are conservative for the following reasons:
• He makes no adjustment upward for the certainty of value that Warner receives as a result of getting [REDACTED]. Rubinfeld CWDT at 57, ¶ 229.
• He does not account for any additional value from [REDACTED].
SoundExchange avers that Drs. Fischel and Lichtman relied exclusively on one specific projection that applied certain “assumptions” regarding future performance under the iHeart/Warner Agreement. These expectations were contained in the “Today's Growth” model presented to iHeart's Board of Directors in mid-2013. Fischel/Lichtman AWDT at 21 ¶ 40.
Although Drs. Fischel and Lichtman state that they chose the “Today's Growth” model because the iHeart Board purportedly “relied on [it] as the most realistic [case]” when approving the iHeart-Warner Agreement, 5/21/15 Tr. 5322 (Fischel), SoundExchange notes that iHeart actually [REDACTED]. IHM Ex. 3338 (Cutler WDT);
Although there is no evidence that the iHeart Board relied on the “[REDACTED]” or “[REDACTED]” models, SoundExchange avers (albeit without supporting evidence) that because iHeart executives [REDACTED], “it was wrong for Drs. Fischel and Lichtman to ignore them completely.” SX PFF ¶ 779. SoundExchange further notes that, although Mr. Cutler testified that he viewed the Today's Growth model as the best estimate, neither he nor any other iHeart witness testified that [REDACTED].
SoundExchange noted when it looked at actual performance under the iHeart/Warner Agreement, one of the models that was [REDACTED]—the “[REDACTED]” Model—proved to be a more accurate estimate of [REDACTED].
SoundExchange surmises that such [REDACTED] policies were put into effect, and thus contributed to the actual initial performance under the iHeart/Warner Agreement that resembled the “[REDACTED]” model rather than the “Today's Growth” model. Whatever the reason, as Mr. Cutler of iHeart acknowledged, iHeart's growth in Warner plays over the initial contract period has been [REDACTED]. 6/2/15 Tr. 7264-65 (Cutler).
SoundExchange notes as well that Dr. Fischel admitted on cross-examination that he had performed an analysis of the effective incremental rates under the “[REDACTED]” model (but did not submit evidence of that calculation or testify as to that calculation). On cross-examination, Dr. Fischel further acknowledged that the incremental rate he had calculated equaled $0.[REDACTED] per play under the “[REDACTED]” model. 5/22/15 Tr. 5523 (Fischel).
SoundExchange additionally points to an effective per-play rate that iHeart supposedly wrongly ignored—the rate derived from a model [REDACTED].
SoundExchange raises several challenges to iHeart's attempt to use the 27 iHeart/Indies Agreements as benchmarks in this proceeding. First, SoundExchange avers that the status of these licensees as Indies renders them unrepresentative of the rates and terms that a noninteractive webcaster would negotiate with a major recorded music company. SoundExchange notes that even Dr. Fischel acknowledged, “Warner got a [[REDACTED]%] better deal than the Indies” from iHeart. 5/22/15 Tr. 5542 (May 22, 2015) (Fischel).
Second, SoundExchange notes that the greater-of rate structure in the iHeart/Indies agreements for custom noninteractive webcasting are [REDACTED], and thus are unduly influenced by that statutory rate.
SoundExchange notes that Drs. Fischel and Lichtman determined both average and incremental rates related to these 27 iHeart/Indies Agreements. iHeart calculated an
However, with regard to the incremental rate, SoundExchange notes that Drs. Fischel and Lichtman did not possess the same contemporaneous projections from iHeart (or the Indies) as
Finally, SoundExchange notes the testimony of one Indie representative, Mr. Barros of Concord, who stated that Concord would not have entered into this agreement with iHeart to reduce custom noninteractive webcasting rates to [REDACTED] if the agreement did not also include the [REDACTED] and compensation for performances of [REDACTED]. 5/28/15 Tr. 6506 (Barros).
The Judges agree with SoundExchange's critique that the “incremental approach” advanced by iHeart is an inappropriate method for determining rates under § 114. There are a number of reasons why the “incremental approach” is improper.
First, the basic premise of the approach is erroneous. In an effort to avoid the so-called “shadow” of the statutory rate, Drs. Fischel and Lichtman essentially substitute a rate of zero for the number of sound recordings played under the existing statutory rate. Then, they conceptually divide the expected total of performances under the direct license (the iHeart/Warner Agreement) into two value-bundles. The first conceptual value-bundle (Scenario 1) consists of the lower number of performances (without steering) that iHeart expected to be played under the higher existing statutory rate. The second conceptual value-bundle (Scenario 2) consists of the number of performances (with steering, from [REDACTED]% to [REDACTED]% market share) iHeart expected to be played under the lower direct deal rate. Drs. Fischel and Lichtman then consider the expected difference between the higher revenues arising from the direct deal. Finally, they divide the incremental revenue by the number of incremental plays to determine their “incremental rate.”
This methodology intentionally attributes no market value to the rate and revenue paid for the
Relatedly, although iHeart would like the Judges to focus only on the incremental number of performances and the incremental revenue, those incremental values cannot exist without iHeart first paying for the pre-incremental performances at pre-incremental rates. To put the point colloquially, “you cannot get there from here.” That tautological point is not avoided by arbitrarily attributing a zero value to the pre-incremental performances.
SoundExchange makes this point well by analogizing to a “buy one, get one free” offer. If a vendor offered an ice cream cone (to adopt SoundExchange's demonstrative example at the hearing) for $1.00, but offered two ice cream cones for $1.06, it would be absurd to conclude that the true market price of an ice cream cone is the incremental six cents. Rather, this offer indicates a market price of $0.53, the average price for the two ice cream cones. Or, to take a common example, tire sellers will often advertise a special offer: A buyer can pay for three tires and get the fourth tire free. This is economically (and mathematically) equivalent to a 25% reduction in the price of four tires. No one could go to the automotive store and receive only the “free” fourth tire!
iHeart attempts to distinguish the ice cream cone example by noting that, in the present case, Drs. Fischel and Lichtman are not eliminating a market-based price for the pre-incremental bundle, but rather are eliminating a government-set rate that casts a “shadow” on the market. There are several errors in this reasoning. First, the statutory rates were set after market participants provided the Judges in the prior proceeding with market evidence. There is no
Accordingly, the Judges reject iHeart's incremental approach and they reject the $0.0005 rate its experts derived by using the incremental approach. To be clear, that incremental $0.0005 proposed rate does not constitute a benchmark or a guidepost which the Judges have relied for any purpose, and that incremental rate and the analysis from which it was derived has not influenced the Judges in their determination of the statutory rate in this proceeding.
Unlike the incremental rate derived by iHeart's experts, the “average rate,”
The iHeart/Warner Agreement satisfies the sub-tests implicit in the Judges' prior determinations, as outlined by Dr. Rubinfeld:
There is no dispute that Warner was a willing seller in connection with the iHeart/Warner Agreement. As one of the three Majors, Warner is a sophisticated entity capable of negotiating direct agreements in a manner that it understands will advance its economic interests. Likewise, iHeart is a leading noninteractive webcaster—not to mention one of the largest transmitters of music across various platforms. iHeart thus without dispute is also clearly capable of representing its economic interests in negotiating direct agreements.
In the present case, the record is replete with voluminous submissions and substantial testimony indicating the diligence of both iHeart and Warner in negotiating this direct agreement. Clearly, each party was a willing participant in the legal sense; that is, each party was under no compulsion to enter into the iHeart/Warner Agreement, and each party had the opportunity to avail itself fully of all facts that it deemed pertinent before executing that agreement.
In the iHeart/Warner Agreement, the buyer/licensee, iHeart, is a statutory webcasting service. The seller/licensor, Warner, is a record company. Clearly, this aspect of the benchmark test is satisfied.
The iHeart/Warner Agreement is a direct agreement between the parties. The rates established in this agreement are not statutory rates. More particularly, at the time the iHeart/Warner Agreement was executed, iHeart was obligated to pay royalties to Warner according to the schedule of rates set forth in the SoundExchange/NAB settlement.
SoundExchange asserts that, nonetheless, the rates in the iHeart/Warner Agreement are too heavily influenced by the “shadow” of the statutory rates to satisfy this “statutory license test.” The Judges disagree. As with regard to the Pandora/Merlin Agreement, it is crucial to appreciate that the adjusted effective rate
Further, and as discussed in connection with the Pandora/Merlin Agreement, the steering aspects of the iHeart/Warner Agreement also satisfy a statutory “test” omitted from Dr. Rubinfeld's four-part approach: The “effective competition” test. The steering aspect of the iHeart/Warner Agreement reflects price competition—an increase in quantity (more performances) in exchange for a lower price (a lower rate). All of the reasons set forth in this determination in the analysis of the Pandora/Merlin Agreement regarding the pro-competitive aspects of such steering, including the dynamic effect of a threat of steering, apply with equal force to the iHeart/Warner Agreement.
It is not disputed that the iHeart/Warner Agreement provides in pertinent part for a license from Warner to iHeart to play Warner sound recordings on iHeart's noninteractive webcasting service.
Accordingly, the Judges find that iHeart/Warner Agreement satisfies the core of the “same rights test.”
The Judges agree with SoundExchange that any use of the iHeart/Warner Agreement as a benchmark must apply the effective
By applying the average rate explicitly set forth in the iHeart/Warner Agreement (subject to potential adjustments), the Judges have obviated the protracted dispute between the parties regarding the probative value of different models and projections of future growth of performances and royalties. That is, in the absence of a “two-bundle” theory, the parties' expectations and projections are baked into the single explicit annual rate contained in the iHeart/Warner Agreement. Regardless of whether actual performance eventually resembles the “Today's Growth Model” relied upon by the iHeart Board, or some more pessimistic or optimistic model of projections considered by iHeart or Warner, iHeart was contractually bound to pay a fixed royalty per year, and Warner had the duty to provide iHeart with access to Warner's sound recordings if those fixed per-play payments were made. Accordingly, the Judges look to the average rate agreed to by the parties in the iHeart/Warner Agreement for 2016, which coincides with the first year of the statutory 2016-2020 period. That agreed-upon rate is $0.[REDACTED] per play.
However, that average, stated per-play rate is not necessarily applicable, standing alone, as a benchmark, if it is subject to necessary upward or downward adjustments to account for other forms of consideration or to more accurately account for probative evidence related to the rights available under the statutory license. The Judges turn to these issues in the next section of this determination.
A potential benchmark can include terms that provide a
As an initial matter, the Judges note that the parties have a strong self-interest to establish values for non-statutory items that would support their positions. Thus, the Judges would anticipate that the record companies and SoundExchange would present specific evidence of the monetary value for the non-statutory consideration they received under the contract that must be added to the stated (“headline”) rate on a per-play basis. More particularly, the Judges would expect that the record companies'
Reciprocally, the Judges would also expect to receive evidence from the webcasters/licensees with regard to
The Judges' expectation that such evidence would be proffered is heightened by the accurate accusations hurled by each side that the other side was manipulating the terms of the potential benchmark in order to influence the Judges in this proceeding.
With those general considerations in mind, the Judges now analyze particular issues disputed by the parties regarding the valuation of certain items in the iHeart/Warner Agreement.
AIP, iHeart's Artist Integration Program, allows Warner's artists to benefit from particular advertising on iHeart's music-formatted radio stations and iHeart's Web sites, in the form of [REDACTED].” SX Ex 33 at 19 § 5(a)(i). Clearly, such advertising inures to Warner's benefit.
Additionally, the iHeart/Warner Agreement contains an express provision stating that this “[REDACTED] AIP Commitment” has an annual “
iHeart makes several arguments in an attempt to disavow this agreed-upon valuation:
• AIP provides value to iHeart and to Warner because AIP content is valuable to listeners and therefore also “helps build [iHeart's] brand . . . as [a] trusted curator[] . . . .” 5/21/15 Tr. 5189-92 (Poleman).
• Warner received [REDACTED] AIP [REDACTED] and the $[REDACTED] reference was intended to reflect [REDACTED]. 6/2/15 Tr. 7312 (Cutler).
• iHeart's commitment to [REDACTED] AIP therefore was in the nature of “insurance,” rather than a granting of an additional right.
• Neither iHeart, Warner, nor Universal treated AIP as a “[REDACTED],” and iHeart [REDACTED].
• The $[REDACTED] was derived from iHeart's advertising “rate card” as a means to measure that Warner got [REDACTED]. 5/21/15 Tr. 5190 (Poleman).
• In its own projections, Warner declined to value AIP because AIP “[REDACTED].” 6/3/15 Tr. 7500 (Wilcox).
The Judges find that the AIP provision in the iHeart/Warner Agreement does not support an increase in the effective average per-play rate derived from that benchmark. As an initial matter, the AIP language in the iHeart/Warner Agreement does not state that the parties agreed,
As Mr. Poleman, an iHeart witness, testified: “these monetary figures serve no other purpose than [REDACTED]. These monetary figures do not reflect [REDACTED] Poleman WRT ¶ 22.
The Judges find these undisputed facts to demonstrate that there was no actual “market” in which Warner procured AIP from iHeart. If such a market existed, with a fair market value of $[REDACTED] for the AIP provided to Warner, it would have been irrational for iHeart simply to give away such substantial value (
Rather, the Judges find guidance for the meaning and of this “$[REDACTED]” figure as it relates to the setting of rates in this proceeding in the context of the contractual clause in which the figure is contained. The contract states: “[iHeart] shall provide Warner AIP insertions in each Agreement year . . . that (i) have a fair market value of at least . . . $[REDACTED] per Agreement Year; and represent at least . . . [REDACTED]% of all AIP inventory in each daypart and market.” SX Ex. 33 at 19 ¶ 5(a)(ii). This provision is consonant with iHeart's explanation that the $[REDACTED] figure was used to establish [REDACTED], and therefore is not a monetary value that the Judges may simply pro-rate, and thereby grossly inflate the benchmark rate.
The Judges also find that iHeart's willingness to provide AIP [REDACTED] to record companies was rational. As Mr. Poleman testified,
The Judges further find that the testimony by Warner's executive, Mr. Wilcox, confirms that the “$[REDACTED]” figure was used as [REDACTED] rather than a statement of value that the Judges could simply add to the effective rate under the iHeart/Warner Agreement. The following testimony on direct examination is telling:
Q: Did iHeart represent to you [AIP] had value, monetary value?
A: Yes.
Q: What was that amount?
A: Well, ultimately it was agreed on that we would
6/3/15 Tr. 7388-89 (Wilcox). This testimony reveals two points: First, the valuation was negotiated to establish a quantity term for AIP. Second, this testimony does not indicate any reference in the negotiations to a “fair market value” for AIP that the parties later simply plugged into the iHeart/Warner Agreement.
The Judges also find credible and important the undisputed fact that no party, and no record company,
The Judges' decision on this issue is also informed by the negotiating position taken by Warner. In particular, under cross-examination, Mr. Wilcox, the testifying Warner executive, when asked if “you told the iHeart representatives during negotiations that you thought AIP
The Judges do recognize that, by converting AIP from a discretionary, voluntary program to a contractually binding commitment, iHeart provided Warner with what Drs. Fischel and Rubinfeld both considered to be “insurance” value. However, neither party through a fact or expert witness presented any basis to create a monetary value for this “insurance.” Therefore, the Judges are presented in this context with the conundrum of an item of ostensible (insurance) value that has not been valued by the parties, but is tendered to the Judges without evidentiary guidance. The Judges return to the point made in the General Considerations section. SoundExchange, through Dr. Rubinfeld, acknowledges that there is some insurance value in the conversion of AIP into a contractual commitment, yet SoundExchange did not present a method for valuation. iHeart, through Dr. Fischel, avers that this “insurance” value would be quite small, and he too did not provide a monetary value. If a party had the understanding that an element within a benchmark could be valued in a manner that would further support its position, the Judges would expect that party to present evidence in that regard. Here, SoundExchange declined to do so with regard to the “insurance” value of the conversion of AIP into a contractual commitment. The Judges therefore find that such unquantified “insurance” value cannot be added to the effective per-play rate under the iHeart/Warner Agreement.
[REDACTED] the [REDACTED], is a program by which Warner may [REDACTED].
Rather, SoundExchange's entire argument in support of a valuation, in excess of $[REDACTED], for [REDACTED] is based upon the hearing testimony of Mr. Wilcox. He derived this value from a single [REDACTED] campaign undertaken by Warner after the iHeart/Warner Agreement had been executed. Wilcox WRT at 14 n.9. However, as iHeart points out, Warner's post-execution performance—or more accurately, non-performance—contradicts this attempt at a performance-based valuation. That is, Mr. Wilcox did not dispute that Warner had [REDACTED]. 6/3/15 Tr. 7452 (Wilcox). Thus, the Judges find that, even to the extent that post-contract performance might be helpful in determining value, Mr. Wilcox's testimony as to a value in excess of $[REDACTED] for [REDACTED] is simply not credible.
In this context as well, neither party's negotiators nor its economic experts set forth a monetary value. The rebuttal performance-based testimony that SoundExchange relies upon from Mr. Wilcox to demonstrate that [REDACTED] had value is simply insufficient when considered against Warner's failure to [REDACTED], and in light of the fact that the Judges did not find Mr. Wilcox to be a particularly credible witness. Accordingly, the Judges do not find that the inclusion of [REDACTED] rights in the iHeart/Warner Agreement supports an increase in the effective average per-play rate derived from that agreement.
The Judges decline to include in the average effective rate any value derived from the $[REDACTED] payment by iHeart to Warner for rights under the [REDACTED] Agreement. As an initial matter, this agreement is not even part of the iHeart/Warner Agreement. Second, the [REDACTED] Agreement contains an integration clause that, as iHeart correctly notes, by its plain language declares that it is the entire agreement between the parties and thus excludes reference to any other agreement, such as the iHeart/Warner Agreement. SX Ex. 1339. The Judges further note that the iHeart/Warner Agreement [REDACTED]. SX Ex. 33 ¶ 18(c). Third, the [REDACTED] Agreement provides for a payment of $[REDACTED] in exchange for a specific set of rights unrelated to iHeart's right to play Warner sound recordings on iHeart's noninteractive service. Fourth, it is irrelevant that Warner was aware of, and made reference to, the [REDACTED] Agreement value when it considered the value of its forthcoming relationship with iHeart. Indeed, as iHeart points out, Warner's internal models and other documents identified the [REDACTED] Agreement's $[REDACTED] payment obligation as a distinct payment for [REDACTED].
The Judges also agree with iHeart's argument that the $[REDACTED] payment obligation in the [REDACTED] Agreement presents the Judges with an issue of
As noted
• The guarantee that iHeart would [REDACTED] even if such steering fell short of that level.
• The alternative percentage-of-revenue rate in the greater-of formulation.
• The additional $[REDACTED] payment guarantee by iHeart even if it never played any Warner sound recordings.
• The guarantee that Warner would receive at least the same [REDACTED], as it did prior to the iHeart/Warner Agreement.
• Warner's [REDACTED], which iHeart could [REDACTED].
• Royalties paid for [REDACTED].
With regard to all of these items, notwithstanding any potential monetary value that might be associated with them, neither Warner nor SoundExchange established values for these items. Indeed, SoundExchange acknowledges that, when the Judges asked Mr. Wilcox whether Warner had assigned a number value to “these provisions,” he admitted that Warner “could not be certain.” 6/3/15 Tr. 7409 (Wilcox). As the Judges noted in the General Considerations section of this analysis of the iHeart proposal, if the party that seeks to increase (or decrease) an otherwise effective benchmark rate to account for other items of potential value cannot or has not provided evidence of such value, when it was in its self-interest to do so, the Judges cannot arbitrarily adjust or ignore that otherwise proper and reasonable benchmark.
iHeart points out that the iHeart/Warner Agreement also provides value to iHeart in the form of: (1) A [REDACTED] royalty ceiling that serves as
However, Drs. Fischel and Lichtman point out that because both parties failed to value such terms, it is acceptable to “assume[] a net value of zero for these terms.” Id.; see 5/28/15 Tr. 6435-37 (Rubinfeld) (acknowledging that he failed to attribute numerical dollar values to items in the iHeart/Warner Agreement that benefited each party respectively).
The Judges disregard these unvalued items; not because, as Drs. Fischel and Lichtman assert, they should be presumed to have a net value of zero. Rather, as stated in the General Considerations section, the Judges tie the indeterminacy of the net value of these offsetting items to a (perhaps tactical) failure of proof of value by sophisticated parties. As Dr. Rubinfeld acknowledged in a colloquy with the Judges:
[JUDGES]
[I]f iHeart is paying a . . . rate based on dollar denominated items and gets some other non-dollar denominated value—net value to iHeart as if it was paying some lower rate because it got new items of value—. . . we just can't value them because
[DR. RUBINFELD]
Yeah, that's possible.
Drs. Fischel and Lichtman note that an iHeart listener is entitled to [REDACTED]
If Drs. Fischel and Lichtman had applied that [REDACTED]% reduction to the otherwise stated average rate of $0.[REDACTED] for 2013 in the iHeart/Warner Agreement, they would have equalized that rate to a statutory rate of $0.[REDACTED]. However, Drs. Fischel and Lichtman adjust their 2013 stated average rate from $0.[REDACTED] to $0.[REDACTED]. SoundExchange avers that it appears from iHeart's own documents however that this $0.[REDACTED] rate reflects an incorporation of the Pureplay rate rather than a calculation to adjust for [REDACTED]
In response to this criticism, iHeart does not refer the Judges to any evidence of calculations it did to support a [REDACTED] reduction from $0.[REDACTED] to $0.[REDACTED]. Rather, iHeart simply declares SoundExchange's reliance on SX Ex. 221, iHeart's own document, is insufficient to call into question the [REDACTED] adjustment proposed by iHeart.
The Judges find that SoundExchange's criticism is appropriate. In order to reflect not only the [REDACTED] adjustment, but also to make an
More importantly, for the first year of the statutory period at issue, 2016, the stated average rate is $0.[REDACTED]. Applying a [REDACTED] adjustment of [REDACTED] results in an equalized rate of $0.[REDACTED]. (Even applying iHeart's proffered [REDACTED]% rate reduction for this factor would result in an adjusted rate of $0.[REDACTED], before any consideration of additional [REDACTED].).
The iHeart/Warner Agreement contains a greater-of rate formula that includes a [REDACTED]%-[REDACTED]% rate, depending upon the year of the agreement. SX Ex. 33 at 15-16, ¶ 3(b)(ii).
For the reasons set forth in the Judges' comprehensive rejection of a greater-of structure with a percentage-of-revenue prong, the Judges do not include these iHeart greater-of provisions in the benchmarks they derive from the iHeart/Warner Agreement and the iHeart/Indies Agreements.
iHeart has calculated an
Sirius XM proposes that the § 114 digital sound recording public performance royalty rate applicable to commercial webcasters for the 2016-2020 rate period be $0.0016 per-performance. Introductory Memorandum to Sirius XM WDS at 1 (October 7, 2014). In support of this rate, Sirius XM avers that a zone of reasonableness can be established for the statutory rate. The high end of the zone, according to Sirius XM, is the $0.0016 per-performance rate, which represents the lowest rate contained in the 2009 WSA settlement agreement between SoundExchange and Sirius XM. The low end of the zone, according to Sirius XM, is represented by several “guideposts,”
Sirius XM did not produce an expert witness to testify in support of its rate proposal. Rather, as noted above, Sirius XM relies upon the lowest rate within its WSA with SoundExchange and the work of the other Services' economic witnesses to support its range, endpoints and proposed rate. Thus, the probative value of the Sirius XM rate is dependent in large measure upon the Judges' analysis and conclusions regarding the models proffered by these other experts. Indeed, Sirius XM does not attempt to independently support the work of those other experts. Instead, Sirius XM devotes the bulk of its
Sirius XM's primary business is broadcasting on a subscription fee basis over its two proprietary satellite systems. However, it also provides a simulcast of its satellite broadcast over the Internet. SXM Ex. 6000 ¶ 20 (Frear WDT). Thus, Sirius XM's Internet radio service is primarily a
Sirius XM also offers as an Internet service a noninteractive feature, “My Sirius XM,” at no extra charge to its Internet radio subscribers.
Although introduced as a response to truly customized Internet radio like Pandora, My Sirius XM does not provide the same amount of customization. My Sirius XM begins from the same playlist created by human curators for a satellite radio channel, and narrows that playlist
The Sirius XM Internet radio service is a minor part of Sirius XM's overall business, with its self-pay subscription revenue (
Sirius XM points out the relatively low importance of noninteractive services to its overall business model in order to explain why it entered into the WSA with SoundExchange in 2009—and why that settlement agreement was and remains not probative of market value and lacked the persuasive value attributed to it in the
• As a result of the
• By late 2008, Sirius XM had insufficient cash to repay hundreds of millions of dollars of debt scheduled to come due in February 2009, and was unable to access the capital markets to refinance this, and other, debt. Frear WDT ¶ 40.
• The pre-merger predecessors to Sirius XM, Sirius and XM, had recently spent over $150 million on merger costs alone.
• Sirius XM narrowly avoided filing for bankruptcy protection when a potential lender agreed to provide a loan that narrowly enabled Sirius XM to avert a default on its debt and bankruptcy.
• The Sirius XM stock price fell from over $4.00 per share in January 2007 to a low of $0.05 per share on February 11, 2009. Frear WDT ¶ 45. On September 15, 2009, Sirius XM received a delisting notice from NASDAQ.
In the context of the severe financial stress affecting Sirius XM's entire business, and the Internet radio services' extremely low usage and importance to its core business, Sirius XM believed it had no sensible option other than to accept the deal offered by SoundExchange. If it had not taken the deal, Sirius XM would have been required to continuing paying the higher
Although Sirius XM could have refused to sign the WSA with SoundExchange and instead sought lower rates in the then-forthcoming
Then, according to Sirius XM, two days before the deadline on which Sirius XM and SoundExchange were required to close negotiations—and after the parties had already agreed on the rate schedule and finalized their deal—Michael Huppe (the party negotiating on behalf of SoundExchange) added an extra term into the Agreement, requiring that it be precedential under the WSA. 6/3/15 Tr. 7627-29 (Huppe); 5/22/15 Tr. 5443-54 (Frear). Having already failed to advance its other interests in negotiations, Sirius XM agreed to this new term requiring its WSA settlement agreement to be precedential, concluding negotiations and consummating the agreement before the statutory deadline.
For the foregoing reasons, Sirius XM maintains that the rates in the Sirius XM WSA settlement agreement do not reflect any industry-wide fair market value for the license. Instead, it claims that the rates are a product of: (1) The
Nonetheless, Sirius XM proposes that the Judges rely on the WSA settlement agreement between Sirius XM and SoundExchange, by adopting its lowest rate, $0.0016, not only as the “the outer boundary of a range of reasonable rates,” but also as the rate to be set in the present proceeding.
SoundExchange opposes the Sirius XM rate proposal on several grounds. First, SoundExchange rejects Sirius XM's suggestion that its settlement contained above-market rates, because Sirius XM voluntarily agreed to those rates, even though it was under no compulsion to negotiate with SoundExchange.
Third, when SoundExchange, through Mr. Huppe, informed Sirius XM that SoundExchange wanted the settlement agreement to be precedential under the WSA, Sirius XM voiced no objection whatsoever in its email response less than an hour later. NAB Ex. 4235.
Fourth, SoundExchange argues that basic economics suggests that any financial distress Sirius XM was experiencing at the time should have reduced, not increased, its willingness to pay royalties for webcasting. SX Ex. 29 ¶ 228 (Rubinfeld Corr. WRT).
Fifth, Sirius XM had a number of alternative options in addition to
• litigate in the
• avoid the cost of litigating
• avoid the statutory license completely and enter into direct licenses with the various record companies.
SX PFF ¶ 1077 (and citations to the record therein).
Sixth, SoundExchange notes that Sirius XM—despite its asserted financial difficulties—continued and expanded its noninteractive services, even though it asserted that such services were an insignificant portion of Sirius XM's total subscribership revenue. Moreover, SoundExchange notes, Sirius XM's internet revenue grew from $[REDACTED] in 2010 to $[REDACTED] in 2014 while Sirius XM was paying rates under its WSA settlement agreement with SoundExchange. SX PFF ¶ 1078 (and citations to the record therein).
Seventh, SoundExchange asserts that Sirius XM's rate proposal has no sound basis. According to SoundExchange, the proposal was simply plucked from the first year of the Sirius XM WSA settlement.
The Judges reject Sirius XM's argument for a number of reasons. First, the Judges decline to re-litigate the probative value of the 2009 WSA settlement agreement between Sirius XM and SoundExchange. That agreement was entered into more than six years ago, and therefore does not represent the present state of the noninteractive market, absent affirmative evidence to the contrary. Whether Sirius XM was compelled by its financial circumstances or not to enter into that settlement might have affected the relevance of that agreement as a benchmark in
Second, the Judges are unpersuaded by the fact that Sirius XM apparently can afford the $0.0016 rate it now proposes, in contrast to earlier years when it was financially
The NAB proposes a two-tiered rate structure for webcasts by simulcasters. Broadcasters that transmit fewer than 876,000 ATH would pay only the minimum fee. NAB Proposed Rates and Terms at 3 (October 7, 2014). All other broadcasters would pay a per-performance royalty rate of $0.0005 to simulcast for each year of the rate term.
NAB's rate proposal is limited to simulcasts (retransmissions by broadcasters of programming transmitted over their AM or FM radio stations), and does not cover other commercial webcasts.
The NAB presented its methodology for arriving at a rate proposal through its economic expert witness, Professor Michael Katz. Dr. Katz did not perform a benchmark analysis to arrive at a rate. Rather, he selected guideposts that define the lower and upper bounds of what he described as a range of reasonable rates that a willing buyer and a willing seller would agree to in a workably competitive market.
Dr. Katz determined the low end of his “zone of reasonableness” by reference to terrestrial radio.
Dr. Katz then argues “available evidence indicates that promotional benefits also arise from web simulcasts of terrestrial broadcasts.”
To set an upper bound to his zone of reasonableness, Professor Katz looked to the Judges' decision in
In SDARS II, the judges found that 13 percent [of gross revenue] constitutes a sensible upper bound on the zone of reasonableness before adjusting to account for Section 801(b) factors. The rate was then reduced by an additional two percent for the third 801(b) factor, which was specific to Sirius XM and the SDARS II proceeding.
The net effect of the two adjustments essentially offset each other, resulting in an adjustment factor of one.
Dr. Katz's approach is similar in some respects to the approach that the Judges took (and the Court of Appeals affirmed) in
In
There is no market for licensing of sound recordings for transmission by terrestrial radio stations, since there is no general public performance right for sound recordings. That would be sufficient reason to reject Dr. Katz's proposed lower bound of “near zero” that he derived from terrestrial radio. Moreover, Dr. Katz relies on an assumption that the promotional effect of simulcasting is essentially the same as the promotional effect of terrestrial broadcasting, because they carry the same content. As discussed above, broadcasters' use of technologies to substitute songs in their simulcast streams destroys the underlying premise that the content of a simulcast stream is the same as the terrestrial broadcast. Even if the content is the same, the Judges do not find sufficient persuasive evidence supporting the conclusion that simulcasts have the same promotional effect as terrestrial broadcasts.
As for Dr. Katz's use of the
SoundExchange proposes that noncommercial webcasters pay a flat annual fee of $500 per station or channel for all performances up to a cap of 159,140 ATH per month. SoundExchange Rate Proposal at 4 (October 7, 2014) SoundExchange proposes that, in any month that a noncommercial webcaster exceeds 159,140 ATH, the webcaster pay per-performance royalties at the following rates for its transmissions in excess of 159,140 ATH:
The NRBNMLC proposes what it describes as a “tiered and capped flat fee structure.” NRBNMLC PFF ¶ 80. Under the NRBNMLC proposal, each noncommercial webcaster would pay a $500 annual fee for all performances of sound recordings up to a threshold of 400 average concurrent listeners (3,504,000 ATH) annually, and an additional $200 for each additional 100 average concurrent listeners (876,000 ATH) annually, up to an annual fee cap of $1,500 per station or channel.
Section 351.4 of the Judges' procedural rules sets forth the required contents of a participant's WDS, including the requirement that, in a rate proceeding, “each party must state its requested rate.” 37 CFR 351.4(b)(3) (required contents of WDS). The rule goes on to permit participants to revise their rate proposals at any time up to the filing of proposed findings of fact and conclusions of law.
IBS's WDS does not contain a rate proposal, or anything that the Judges could reasonably interpret as a rate proposal. It consists solely of the three-page written testimony of Frederick Kass. Captain Kass introduces himself and IBS, and briefly discusses the nature of IBS members' webcasting activities:
[IBS member] stations operate as non-profit entities within the meaning of the statute, as amended. They use digitally recorded music as instructional media for announcers and programmers. The instantaneous listenership to such music on member stations is
IBS Members provide significant science, technology, engineering, management, media, and communication skill set training. The stations typically act as learning laboratories where students may learn and perfect their skills.
Similarly, WHRB's WDS does not contain a rate proposal, or anything the Judges could reasonably interpret as a rate proposal. WHRB's WDS is comprised of the WDT of Michael Papish, one of the station's board members. In three pages of written testimony, Mr. Papish merely introduces himself and describes WHRB's operations.
Neither Captain Kass nor Mr. Papish presented a rate proposal in the course of their respective live testimony at the hearing. The only hint of a proposal might be gleaned from a colloquy between the Judges and counsel
[THE JUDGES]: So what exactly is IBS proposing here?
MR. MALONE: All right. In our pleadings as early as the agreement between SoundExchange and CPB, NPR became public when you published it in the
Then when you scale that down to show the number of ATH that these college stations, high school stations, academy stations, and the like are operating, it works out to around $20 a year.
In its proposed findings, IBS directed its efforts to arguing against adoption of the SoundExchange/CBI settlement agreement
Second, “around $20 a year” is not sufficiently definite or specific to constitute a rate proposal. For example, which noncommercial webcasters would pay “around $20 a year”? All of them? Only ones that transmit below a certain ATH threshold? What threshold? IBS does not say.
Third, even if the Judges were to consider this to be a proposal, IBS has offered only statements of counsel to support it. The record is devoid of
The Judges have recognized noncommercial webcasting as a separate submarket in prior decisions only “up to a point.”
SoundExchange's proposal to continue to impose of a limit on the size of noncommercial webcasters that are eligible for a separate noncommercial rate is supported by the testimony of Professor Thomas Lys. Professor Lys noted that, as a matter of economic logic, “there is no real difference between a noncommercial and a commercial broadcaster.” SX Ex. 28 ¶ 256 (Lys WRT); 5/29/15 Tr. at 6738. The Judges credit this testimony, but do not reach precisely the same ultimate conclusion as Professor Lys. While Professor Lys apparently argues that there should be no distinction between commercial and noncommercial rates, he did not consider (and was apparently unaware of) the revealed preference in the marketplace for a separate noncommercial rate. The Judges resolve the tension between Professor Lys's observation concerning economic logic and the revealed preference in the marketplace by limiting the differential treatment of noncommercial webcasters to smaller players that have a correspondingly smaller impact on the commercial market. The Judges thus agree with SoundExchange that eligibility for a noncommercial rate should be limited to those noncommercial webcasters whose audience size falls below a fixed threshold.
While SoundExchange proposes a threshold above which a noncommercial webcaster ceases to be eligible for a noncommercial rate, the NRBNMLC does not. The NRBNMLC does, however, propose a threshold above which a noncommercial webcaster must pay an additional flat royalty fee (this structure is described
SoundExchange proposes that the threshold remain the same as the
The NRBNMLC argues that the existing threshold should be increased because it was originally established in 2006 (based on 2004 survey data). NRBNMLC PFF ¶ 143. In addition, the NRBNMLC argues that an increase is necessary to provide noncommercial webcasters with “breathing room.”
While it is correct that the current 159,140 ATH threshold was adopted originally in
As to the NRBNMLC's argument that noncommercial webcasters need the “breathing room” that an increased threshold would provide, there is no persuasive record evidence to support that proposition. Mr. Emert did testify to this effect. Emert WDT ¶ 39;
To the contrary, there is ample record evidence to demonstrate that the vast majority of noncommercial webcasters do not exceed the existing threshold. SoundExchange payment data show that between 2010 and 2014, noncommercial webcasters
The NRBNMLC's proposal to increase the threshold to 400 concurrent listeners is unsupported by the record. By contrast, the evidence demonstrates that the current threshold of 159,140 ATH per month that SoundExchange proposes to retain has resulted, for the vast majority of noncommercial webcasters, in no additional liability for royalties beyond the minimum fee. Moreover, the willingness of SoundExchange and CBI to adopt that threshold in their current settlement agreement, after years of experience with the identical threshold under the current rates, demonstrates that it is reasonable and workable. The Judges hereby adopt it.
SoundExchange proposes that a noncommercial webcaster's transmissions beyond the 159,140 ATH threshold should no longer enjoy a reduced royalty rate. The NRBNMLC proposes that a reduced royalty rate, structured in $200 increments for each 876,000 ATH annually, should apply to transmissions beyond the threshold.
The Judges explained in
The NRBNMLC does not address this issue directly. Instead, the NRBNMLC argues that its proposed “tiered and capped flat rate structure” is what a willing buyer and a willing seller would
As additional evidence to support their argument that a “tiered and capped flat rate structure” is a market rate, the NRBNMLC cites the SoundExchange/CBI settlement agreement, the SoundExchange/NPR settlement agreement, the rates established for musical works under 17 U.S.C. 118, and the position taken by SoundExchange on legislation to create a public performance right for sound recordings that covers transmissions over terrestrial radio.
The SoundExchange/CBI settlement agreement imposes a flat $500 fee on NEWs that transmit up to 159,140 ATH per month. Any NEW that exceeds that threshold loses its eligibility to operate under the settlement, and thus becomes subject to the CRB rate for noncommercial webcasters for the remainder of the year.
The NRBNMLC is correct in pointing out that the SoundExchange/NPR settlement agreement imposes a flat royalty rate with no additional usage fee. However, the SoundExchange/NPR settlement differs so fundamentally in so many ways from what the NRBNMLC is proposing that it cannot serve as a support for that proposal. The SoundExchange/NPR settlement entails a single annual payment by a single payer (CPB), in advance, to cover over 500 NPR member radio stations. 80 FR at 59590-91. The stations include a range of formats, some of which entail very limited use of recorded music. Unlike the NRBNMLC's rate proposal, the settlement does not include tiered payments above the flat royalty rate, but does include a cap on the aggregate amount of recorded music that may be performed. NPR consolidates the reports of use for all of the stations covered by the agreement. The NRBNMLC's proposal does not provide for consolidated reports of use. On the whole, the terms of the SoundExchange/NPR agreement provide SoundExchange with significant benefits—reduced risk of nonpayment; protection against large numbers of uncompensated performances; reduced costs of processing usage data—that the NRBNMLC proposal does not. To pluck out a single element of the deal, the flat royalty rate, and cite it as support for the NRBNMLC rate proposal simply lacks credibility.
The musical works rate under the § 118 statutory license suffers from a similar lack of comparability to the rates the Judges must set in this proceeding. Rates under § 118 are in a different market, with different sellers and for different copyrighted works. The NRBNMLC has presented no evidence to demonstrate how a rate structure in that market, and with those sellers, reflects what a willing buyer and a willing seller would agree to in the sound recordings market.
Finally, SoundExchange's position on legislation has little or no bearing on what constitutes a market rate. The compromises and tradeoffs that parties are prepared to make in the legislative arena have only the remotest resemblance to the give and take of the marketplace. The record industry does not currently enjoy any legal right with respect to the transmission of its sound recordings over terrestrial radio. There is no basis for the Judges to conclude that what the industry may be willing to accept in legislation that establishes such a right is the same as what it would bargain for in an arms-length transaction against the backdrop of an existing statutory right of remuneration.
Although SoundExchange's proposal to impose commercial rates above the 159,140 ATH threshold is consistent with the Judge's rationale for limiting the applicability of noncommercial rates, the NRBNMLC levels multiple criticisms against it. These include:
• SoundExchange's entire rate proposal for noncommercial webcasters lacks evidentiary support;
• The specific usage rates that SoundExchange proposes are “inappropriate for commercial webcasters and even more inappropriate for noncommercial webcasters”; and
• The fact that few noncommercial webcasters have paid usage fees confirms that the proposed fees are unreasonable.
As Professor Rubinfeld readily conceded, there are no current marketplace benchmarks from which to derive SoundExchange's entire rate proposal for noncommercial webcasters. Rubinfeld CWDT ¶¶ 33, 246. The only contemporary agreements in evidence that cover noncommercial webcasters are the two settlement agreements between SoundExchange, on the one hand, and CBI and NPR, respectively, on the other hand. As discussed in the preceding section, there are a number of elements of the SoundExchange/NPR agreement that render it a poor benchmark for setting noncommercial rates generally. The SoundExchange/CBI agreement lends support for some elements of SoundExchange's rate proposal (
That does not mean, however, that SoundExchange's rate proposal is entirely without evidentiary support. As discussed,
The NRBNMLC pursues two lines of attack against the specific usage rates that SoundExchange proposes. The first, concerning Professor Rubinfeld's interactive benchmark analysis, essentially repeats the licensee services' criticisms of SoundExchange's proposal for commercial webcasting rates.
The second line of attack is that Professor Rubinfeld's benchmark analysis is inapplicable to noncommercial webcasters because none of the licensees under any of the benchmark agreements were noncommercial webcasters.
The NRBNMLC notes that few noncommercial webcasters pay usage fees and, of those that do, most pay a lower settlement rate in lieu of the rates set by the Judges for commercial webcasters. NRBNMLC PFF ¶ 131. Based on this evidence, the NRBNMLC concludes that the commercial webcaster rates are excessive, and that noncommercial webcasters are imposing listener caps or taking other affirmative steps to avoid paying them.
Of the 3,917 documented payments by noncommercial webcasters between 2010 and 2014, 112 included payments for usage above the ATH threshold. NAB Ex. 4141; NAB Ex. 4149. Of these, 13 were at the commercial rate determined by the Judges and 99 were at a lower rate established under a WSA settlement.
These facts do no support the NRBNMLC's conclusions. In itself, the fact that more than 97% of noncommercial webcaster payments do not include usage fees could just as easily support the conclusion that the vast majority of noncommercial webcasters—like the noncommercial webcasters that testified in this proceeding—operate well below the 159,140 ATH threshold. Without evidence that a substantial number of noncommercial webcasters are operating near the threshold, or are imposing listening caps, the Judges cannot conclude that the threshold operates as a significant constraint or that the usage fees are excessive.
The evidence that most noncommercial webcasters that paid usage fees did so under an alternative rate structure also does not support the NRBNMLC's conclusions. These webcasters made a rational choice to pay an available lower rate. That tells the Judges nothing about their willingness to pay the higher statutory rate in the absence of settlement. Conversely, though, it strongly suggests that nearly all of the webcasters that opted for the statutory rate structure or the NEW settlement expected that they would not exceed the threshold.
The NRBNMLC proposes that the total obligation of a noncommercial webcaster to pay royalties should be capped at $1,500, regardless of the number of sound recordings the webcaster performs. As with the other elements of its rate proposal, the NRBNMLC contends that the cap on fees is supported by marketplace evidence. Neither of the two noncommercial agreements in evidence employs the cap that the NRBNMLC proposes. The SoundExchange/CBI settlement imposes a flat royalty rate, but caps eligibility for that rate at 159,140 ATH. Beyond that threshold, the noncommercial webcaster must pay under the noncommercial rate structure determined in this proceeding. The SoundExchange/NPR settlement agreement employs a flat-fee structure (which serves as a cap on royalties), but also imposes a cap on music usage.
There is no other evidence of any kind that a copyright owner would willingly license unlimited use of its sound recordings for a fixed fee of $1,500. The Judges reject the NRBNMLC's proposed royalty cap.
IBS did not direct any criticism directly at either the SoundExchange or the NRBNMLC rate proposal. IBS's rate-related arguments were directed (or misdirected
Captain Kass testified that many IBS members are a part of state-funded educational institutions that are barred by state law from providing funds to organizations that lobby. IBS argues that these laws prevent certain IBS members from paying royalties to SoundExchange.
This argument is unavailing for several reasons. First, IBS failed to provide any legal authority or expert testimony to support Captain Kass's interpretation of these state laws. Even if the Judges accept as true the assertion that these state laws prohibit certain IBS members from remitting funds to lobbying organizations, it is far from clear whether those laws would prevent the same IBS members from paying statutory license royalties to an organization designated by regulation as a collective under a Federal statute.
Second, there is no evidence in the record concerning SoundExchange's lobbying activities,
Third, and most fundamentally, the entire question is not relevant to the Judges' task of setting rates for noncommercial webcasters. If IBS contends that its members may webcast sound recordings but are forbidden under state law to pay royalties to SoundExchange, that is an argument that must be resolved by a Federal District Court in an infringement action. It has no bearing on the particular rate structure that the Judges must determine for noncommercial webcasters.
IBS argues that royalty payments for noncommercial webcasters must be proportional to their use of sound recordings. While IBS's argument has a superficial appeal, it suffers from several shortcomings.
IBS does not and cannot cite any statutory authority for its argument. The statute directs the Judges to set willing buyer/willing seller rates.17 U.S.C. 114(f)(2)(B). Willing buyers and willing sellers may, and often do, agree to rates that are not strictly proportional to usage. The SoundExchange/NPR and SoundExchange/CBI agreements are examples of agreements that incorporate a flat-rate structure where royalties are not strictly proportional to use.
The statutory requirement of a minimum fee also runs counter to IBS's argument. By definition, a minimum fee (whatever its level) is not proportional to usage.
IBS also fails utterly to provide any evidentiary basis for concluding that the rates proposed by SoundExchange or the NRBNMLC are so disproportional to noncommercial webcasters' usage as to be unreasonable. To be sure, some noncommercial webcasters transmit a very small number of performances of recorded music.
For the rate period 2016-2020 the Judges adopt an annual rate of $500 per station or channel for all transmissions by noncommercial webcasters up to a threshold of 159,140 ATH. For transmissions in excess of 159,140 ATH, noncommercial webcasters shall pay royalties for 2016 at the commercial rate (
Sections 112 and 114 of the Act require the Judges to establish minimum fees as part of any rate structure under the respective statutory licenses. 17 U.S.C. 112(e)(3)-(4) and 114(f)(2)(A)-(B).
SoundExchange proposes a $500 per station or channel annual minimum fee. The minimum fee would be nonrefundable, but would be credited against royalties incurred during the applicable year. The minimum fee would be capped at $50,000 annually for a webcaster with 100 or more stations or channels. SoundExchange Rate Proposal at 2 (October 7, 2014).
Pandora does not make an explicit proposal for a minimum fee. Pandora does, however, propose that, apart from those terms for which it proposes changes, “the terms currently set forth in 37 CFR 380 be continued.” Proposed Rates and Terms of Pandora at 2 (Oct. 7, 2015). Those terms include the current minimum fee of $500 per station or channel (capped at $50,000) for commercial webcasters.
iHeartMedia does not propose a minimum fee.
Sirius XM does not make an explicit proposal for a minimum fee. Sirius XM does, however, propose that “other than the royalty rate, the terms currently applicable to commercial webcasters be retained in their current form.” Introductory Memorandum to the Written Direct Statement of Sirius XM at 1-2 (Oct. 7, 2014). Those terms presumably include the current minimum fee of $500 per station or channel (capped at $50,000) for commercial webcasters.
NAB proposes a $500 annual minimum fee for each terrestrial AM or FM radio station that a broadcaster webcasts. For purposes of calculating the minimum fee, each individual stream (
The minimum fee would be nonrefundable, but would be credited against royalties incurred during the applicable year. The minimum fee would be capped at $50,000 annually for a webcaster with 100 or more stations or channels.
All participants that proposed a minimum fee for commercial webcasters asked the Judges to retain the current annual minimum fee that the Judges adopted in
While there is no settlement of the minimum fee issue in the current proceeding, the convergence of the parties' proposals on the existing $500 minimum fee (capped at $50,000) counsels strongly in favor of its retention. In addition, the Judges follow their earlier determination that commercial and noncommercial webcasters alike should have to pay a minimum fee that at least defrays a portion of SoundExchange's costs to administer the statutory licenses.
SoundExchange's average administrative cost per licensee is substantially higher than the minimum fee it proposes to charge each licensee.
The current $500 minimum fee for commercial webcasters has been in force for more than a dozen years,
SoundExchange proposes a $500 per station or channel annual minimum fee for noncommercial webcasters. The minimum fee would be nonrefundable, but would be credited against royalties incurred during the applicable year. SoundExchange Rate Proposal at 4.
NRBNMLC proposes a $500 per station or channel annual minimum fee. The minimum fee would be nonrefundable, but would be credited against royalties incurred during the applicable year.
As discussed
Both the SoundExchange and NRBNMLC rate proposals include a $500 annual per station or channel minimum fee for noncommercial webcasters—
Although WHRB and IBS do not attack the SoundExchange and NRBNMLC minimum fee proposals directly, they argued against adoption of the SoundExchange/CBI settlement which incorporates the same $500 minimum fee, and they repeat those arguments in this proceeding. The Judges addressed their objections to the SoundExchange/CBI settlement in the
The current $500 annual minimum fee for noncommercial webcasters has been in force since
Section 112(e) grants entities that transmit performances of sound recordings a statutory license to make ephemeral recordings. SoundExchange proposes that the Judges bundle the royalties for Section 114 and 112 and allocate five percent (5%) of the Section 114 performance right royalty deposits to the Section 112(e) ephemeral recording right, a rate structure that would continue the extant arrangement. SX PFFCL ¶ 1369. SoundExchange contends that its proposal regarding the bundled rate for the Section 112 license is supported by the designated testimony of Dr. Ford. SX PFFCL at 1370 & n.64. SoundExchange also cites as support for its Section 112 proposal certain license agreements that were introduced into evidence. SX PFFCL ¶ 1374 (
SoundExchange contends that no participant offered evidence of a benchmark agreement that does not bundle performance rights and the right to make ephemeral copies. SX PFFCL ¶ 1375. SoundExchange further contends that “[a]s of the
Other participants that address the rate for the Section 112 license do not contradict SoundExchange's assertions.
The Judges accept SoundExchange's proposal to continue the current bundling of the Section 112 and 114 rates. The Judges find persuasive the designated testimony of Dr. Ford and the license agreements that SoundExchange cites in its PFFCL that willing buyers and willing sellers would prefer that the rates for the two licenses be bundled and that they would be agnostic with respect to the allocation of those rates to the Section 112 and 114 license holders.
SoundExchange and the services disagree, however, on the terms with respect to the Section 112(e) license. CRB Rule 380.3(c), which addresses ephemeral recordings, states: “The royalty payable under 17 U.S.C. 112(e) for the making of Ephemeral Recordings used by the Licensee solely to facilitate transmissions
Pandora proposes that the Judges strike the italicized language and replace it with the phrase “made pursuant to 17 U.S.C. 114.” Pandora believes the current language “creates the possibility (likely unintended) that ephemeral copies of sound recordings that are used by a service for non-compensable performances under Section 114 might not be authorized under the regulations.” Pandora PFFCL ¶ 416. Pandora also proposes that the Judges add the following sentence to the current amended regulation: “A Licensee is authorized to make more than one Ephemeral Recording of a sound recording as it deems necessary to make noninteractive digital audio transmissions pursuant to 17 U.S.C. 114.” Pandora PFFCL ¶ 417. Pandora contends that such “as necessary” language is consistent with industry practice.
The Judges adopt Pandora's proposed language and do not carry forward the language “for which it pays royalties” in the current regulation because they believe that the phrase could be construed in a way that would limit the application of the Section 112 license to certain transmissions made consistent with Section 114 that are not royalty generating, such as skips. The Judges also are sympathetic to the Services' contention that, in certain circumstances (
One of the purposes of this proceeding is to establish terms for the administration of the rates the Judges determine for the rate period 2016 to 2020. The parties proposed changes to Subchapter E of Chapter III, title 37 CFR, relating to royalty rates and terms. The Judges adopted some changes and rejected others in the initial Determination. In its Petition for Rehearing (Rehearing Motion), SoundExchange raised several issues relating to the Judges' determinations regarding proper regulatory language to effect their conclusions in the Determination. After considering the Rehearing Motion
In addition to the proposed terms concerning licensing ephemeral recordings discussed in the preceding section of this Determination, the Judges have weighed the proposals and the arguments of the parties in support of or opposed to various regulatory provisions and, after due consideration of the rehearing papers, adopt the Terms as detailed below this Supplementary Information section. The parties' proposals—and the Judges' rulings—include the following.
iHeart proposed changes to the statutory definition of “sound recording performance complement” to reflect the practice of waiving the statutory performance complement in private agreements, IHM PFF ¶ 425. The provision would “ensure[ ] that Broadcasters do not need to alter the content of their radio broadcasts simply because they have elected to simulcast those broadcasts over the Internet”. IHM Rate and Terms Proposal at 2-3. According to iHeart, because programs on terrestrial radio stations can play entire albums, iHeart should be allowed to simulcast the programs without altering them to satisfy the performance complement requirement, and the Judges have the authority to modify such “background terms of the statutory license” where willing buyers and sellers would negotiate such terms absent the statute. IHM COL ¶ 34-35. SoundExchange argued that statutory changes can only be made by Congress.
iHeart proposed to add a provision that exempts Broadcasters from the statutory six-month limitation on the retention of ephemeral recordings subject to certain conditions. SoundExchange argued that the Judges are not authorized to make changes to the statute by enacting regulations, and the Judges agreed. The Judges cannot and did not adopt this proposal.
SoundExchange proposed shortening the payment period from 45 days to 30 days. Pandora and Sirius did not oppose the change, but the NAB, NRBNMLC, and IHM did. SoundExchange argued that the shorter term would allow them to distribute payments more quickly and that the majority of agreements in the industry have payments terms of 30 days. The NAB and IHM argued that because of the unique character of their respective business models, shortening the term would cause additional burdens and create inaccuracies and overpayments that potentially would not be refunded. The Judges also are considering this issue in a rulemaking proceeding that is currently pending before them. The Judges do not believe the record before them in this rate-setting proceeding supports the change that SoundExchange seeks, and therefore decline to adopt it. The Judges can perceive the costs to the Services that the shortened reporting period would impose, and it is less clear that the benefits identified by SoundExchange from such a change would justify those costs. Nevertheless, the Judges will consider revisiting this issue in the broader context of the pending rulemaking proceeding.
NRBNMLC proposed that SoundExchange send emails (similar to those that the musical works collectives send) with reminders that annual payments are due, which would serve a function similar to an invoice. NRBNMLC also proposed a provision requiring SoundExchange to email acknowledgments of receipt of payment, which would function like a receipt and which is a common business practice, including in the nonprofit arena. SoundExchange argued there is no need for a regulation because it already sends reminders. It also argued that an acknowledgment email would be challenging because it does not have current email addresses for each of its licensees, and the cost would outweigh the benefit. SoundExchange countered that it will soon have an online payment portal, a fact that NRBNMLC points out shows that SoundExchange realizes that the receipts would be useful. The Judges found that the online portal should address the receipt concern and that the practice of sending reminders does not warrant a regulation. Therefore, the Judges did not adopt this proposed change.
Pandora proposed a single late fee for both a late payment and a late Statement of Account. It argued that a late fee for each of these is duplicative and unnecessary. SoundExchange countered that it incurs duplicative costs when both items are late and that it is fair to hold a late payor accountable for such costs. In addition, SoundExchange's ability to enforce compliance and make efficient distribution relies on late fees for each of these. The Judges agreed that such fees encourage compliance for each required item. As a result, the Judges did not adopt this proposed change.
iHeart, the NAB, and NRBNMLC proposed that the late fee rate be reduced from 1.5% (the equivalent of 18% per year) to a more “reasonable” fee; that is, one similar to statutory interest rates on judgments and tax underpayments. iHeart pointed out that its agreements with the Indies contain no late fee provision and that Warner has never asked them to pay the late fee when they have submitted a late payment. SoundExchange argued that the high fee provides an incentive for timely payments and covers costs due to late payments. The evidence shows that late fees in market agreements range from no fees up to the proposed fee of 1.5%. The 1.5% rate is an accepted rate in the market, and the services produced no evidence of actual hardship from the current rate of 1.5%. For this reason, the Judges did not adopt this proposed change.
Pandora proposed a change to allow Licensees to make adjustments to their Statements of Account. iHeart proposed changes that would allow Licensees to recoup overpayments. SoundExchange argued that the proposals are unreasonable because of,
The Judges agreed with SoundExchange. The burden of submitting accurate payments is on the Licensee, and the Licensee bears the risk of overpayment. In addition, the record contained no evidence to guide the Judges in determining a reasonable period for, or a reasonable number of, adjustments. Therefore, the Judges did not adopt this proposed change.
The parties also raised the issue of royalty fee payment adjustments in the context of audits.
Pandora proposed adding a sentence to the required language in a Statement of Account—just below the sentence where the signatory attests to the statement's accuracy and completeness—that would allow Licensees to amend their Statements of Accounts. This proposal was related to iHeart's proposal regarding overpayment and corrections to payments. The proposed sentence contained no time limit for making amendments to the Statements of Accounts and is therefore an unreasonable addition to the Statement of Account. The Judges did not adopt this proposed change.
In this proceeding, the Licensees proposed, and the Judges adopted, additional regulatory language regarding the Collective's duty to locate parties
If SoundExchange is able to make—and amenable to making—records searches to assure proper distribution of reports of use, the Judges should assure that SoundExchange makes no less of an effort to locate copyright owners when the time comes to distribute royalty funds. It would seem even more appropriate for SoundExchange to engage in best efforts when distributing royalties to avoid any appearance of impropriety or conflict of interest, in light of section 380.4(b), which may permit retention of unclaimed funds by SoundExchange. This minimal additional due diligence can do little other than assure the currency and integrity of SoundExchange's distribution database.
Further, SoundExchange outlined its search capabilities, but did not object expressly to the due diligence language proposed by NAB and NRBNMLC. The Judges adopted the proposal of NAB and NRBNMLC.
Pandora proposed that the provision in the regulations dealing with the Collective's use of unclaimed funds may not be consistent with state escheatment laws. SoundExchange opposed changes to this provision, which allows the Collective, under certain circumstances, to use unclaimed funds for administrative purposes. SoundExchange argued that the changes Pandora had proposed, which would have required the Collective to use unclaimed funds in a manner consistent with applicable law, could impose an unnecessary regulatory burden on the Collective.
The Judges adopted the changes substantially as proposed by Pandora. Although the Judges do not believe the unclaimed funds provision in the current regulations runs afoul of any state law, in abundance of caution and to avoid potential confusion in the upcoming rate period, the Judges adopted the more neutral drafting that Pandora proposed to ensure that the Collective's use of unclaimed funds comports with applicable law.
In the Rehearing Motion, SoundExchange further objected to the Judge's insertion of language to define the three-year holding period for unclaimed funds. The extant regulations contain an internal ambiguity concerning the measurement of the period for holding unclaimed funds. When the Judges suggested reorganization of the Part 380 regulations, they highlighted this issue for the parties.
On its face, the “date of payment by a Licensee” is not the same as the “date of distribution,” the latter of which is ambiguous, at best. Despite the Judges' invitation, no party offered explanation for the current regulatory discrepancy or suggested clarifying language to eliminate the ambiguity. In section 380.2(e) of the regulations adopted by the Judges as part of this proceeding, the Judges sought to resolve the ambiguity by specifying that the three-year holding period commences on “the date of final distribution of all royalties.” SoundExchange averred that the Judges'
SoundExchange requested that the Judges amend the regulation to specify that the three-year holding period commences on the date of the first distribution of royalties from the relevant payment by the service. Rehearing Motion at 10. No other party responded to SoundExchange's requested amendment. The Judges recognized that the language of section 380.2(e) may be unclear, and that the amendment that SoundExchange requested would clarify the regulation in a manner consistent with the Judges' intent. Therefore, the Judges accepted the SoundExchange proposal and clarified the regulatory language accordingly: The three-year escrow period for undistributable royalties shall be three years from the date of first distribution of relevant royalty deposits from a Licensee.
The Judges designated SoundExchange as Collective.
Upon review of the supplemental papers, the Judges made an additional change to the language regarding handling of confidential information, anticipating a claim of ambiguity. In its discussion of the new regulatory requirements for,
NAB and NRBNMLC proposed, and the Judges adopted, additional verbiage for the regulation (section 380.5(c) (1) in the newly-revised regulations) regarding confidential information shared by participants in webcasting proceedings that: (1) Required confidentiality agreements to be in writing; and (2) limited disclosure of confidential information to those performing activities “related directly” to collection and distribution of royalty payments. SoundExchange did not indicate that it ever addressed these proposed changes to the regulations. It was not until SoundExchange sought rehearing that it raised a specific challenge to this added confidentiality language. Supplemental Petition for Rehearing . . . at 4 (Supplement).
In their joint opposition to the Supplement, NAB and Pandora objected to allowing SoundExchange to raise a new issue on rehearing.
SoundExchange's objection was too little, too late. The Judges declined to change the confidentiality language.
SoundExchange objected to use of the phrase “distributees of the collective” in section 380.5(d) as creating an uncertain standard, contending that the provision could be interpreted to require recipients of confidential information to “adhere to the unknowable standards employed by SoundExchange's tens of thousands of distributees.” Supplement at 4. SoundExchange proposed to clarify that recipients of confidential information are bound by the standard of care that they employ with their own confidential information by substituting the phrase “Person authorized to receive confidential information” for “distributees of the collective.”
SoundExchange correctly discerned the intended meaning of the language that the Judges adopted. The Judges did not view the potential misinterpretation that SoundExchange feared to be a reasonable reading of the section 380.5(d). The Judges also did not view SoundExchange's proposed amendment as likely to clarify the Judges' intent. Nevertheless, to remove all doubt the Judges amended section 380.5(d) by deleting everything after the second-to-last comma and substituting the following: “but no less than the same degree of security that the recipient uses to protect its own Confidential Information or similarly sensitive information.”
SoundExchange argued that the Judges' newly-revised regulatory language regarding audit frequency included an unintended ambiguity regarding the frequency with which the Collective may audit Licensees. Motion at 10. In its Supplement, SoundExchange contended that section 380.6(b) could be interpreted as limiting SoundExchange to a single audit
The NAB proposed the Judges modify the audit regulation by removing the requirement that the Qualified Auditor's results be binding on the parties. SoundExchange objected to the Judges' adoption of the NAB proposal. Supplement at 4. As the NAB noted, SoundExchange
The Judges credited Dr. Lys's testimony and agreed that the subject of any audit should be permitted to contest audit results. SoundExchange offered no record support for its proposal that the regulations return to the current language, albeit made reciprocal in nature. The “binding” language has been excised from the newly-revised regulations.
SoundExchange proposed removing this provision because it allows audits to be routine financial audits instead of specialized “royalty examinations.” SX PFF ¶ 1285-86. Although the services did not oppose this change, SoundExchange offered no evidence of the ineffectiveness of the audits to date due to the existence of the provision, and therefore the Judges did not adopt the proposed change. A Service's recent financial audit need not preclude a business audit that focuses on the
Pandora suggested that Licensees and SoundExchange be permitted to agree on acceptable terms
The legislative emphasis in the Act on voluntary, negotiated settlements, should, without clear, contrary evidence or authority, extend to permitting agreement regarding the timing for account reconciliation. SoundExchange failed to show that permission to resolve a conflict by agreement is without evidentiary support or contrary to any legal requirements in the Act. The Judges did not err in adding this provision to the revised regulations. However, the regulatory language the Judges adopted might be construed as requiring, rather than permitting SoundExchange and Licensees to agree on acceptable terms of payment. Accordingly, the Judges clarified section 380.6(g).
The parties raised the issue of underpayment collection and overpayment recoupment (with interest) in the context of monthly royalty deposits. A periodic audit may also reveal underpayments and overpayments. SoundExchange objected to new language in section 380.6(g) that gives licensees a credit, with interest, for overpayments that are revealed in an audit, arguing that the provision is inconsistent with the Judges' rejection of a similar proposal by the services in connection with adjustments based on revised Statements of Account. Rehearing Motion at 10. In the then-extant regulations, the provisions regarding audits and audit findings did not address the question of financial adjustment,
The Licensees participating in this proceeding proposed an open-ended term that would permit them to amend SOAs and make concomitant financial adjustments (with interest). The Judges rejected this proposal because of the open-ended nature of the proposal, which could result in an excessive administrative burden on SoundExchange. The Judges concluded, rather, to allocate the burden of accuracy in reporting to the Licensees.
In allocating that administrative burden, however, the Judges were not opining on the propriety of or need for a balancing of accounts after an audit. SoundExchange may audit Licensees annually, but the period audited may be up to three years. No party offered evidence of past audit practices or results. The Judges were unaware whether any audit findings had ever resulted in cost-shifting, for example, let alone what remedies, if any, the parties had employed to reconcile under- or over-payments. Further, a sampling of direct license agreements did not reveal a standard regarding recoupment of overpayments detected by audit.
Nonetheless, even if directly-contracting parties negotiated reciprocal reconciliation of payments in any circumstance, the Collective is in a different business posture than its members making direct license deals. As SoundExchange pointed out, it is a non-profit organization that makes distributions directly to a multiplicity of artists and record companies from each royalty deposit. SoundExchange is not in the same position that an individual Licensor might be with regard to management of its funds.
The Judges thus adopted for audit findings the same rationale as that applicable to Statements of Account: The burden of accurate reporting and payment is on the Licensee. Accordingly, the Judges' regulations continue to require immediate restitution in the case of underpayment, but no right of recoupment for overpayment. As with any untimely payment, a Licensee that is obligated to remedy an underpayment is liable to pay reasonable interest thereon.
The NAB proposed adding a notice and cure provision to apply in case of breach because it is customary in contracts and is included in some of the agreements in evidence. SoundExchange wanted the option to use informal methods of dealing with breach, but the NAB argued this provision would not preclude such efforts; it would only be required in case of a material breach that SoundExchange planned to assert. Such a provision is not necessary merely because it is customary, and informal or formal methods of notice are always available to the parties. Therefore, the Judges did not adopt this proposed change.
The NAB and NRBNMLC proposed augmenting the audit notice provision with what they termed a reasonable deadline for completion of audits, arguing the potential for abuse and the burden that lengthy audits place on Broadcasters. They point to comments in a rulemaking proceeding regarding the burden. SoundExchange argues that the length of an audit is in the control of the services more than of the auditor and that the NAB and NRBNMLC point to no such provisions in private agreements. The comments in the rulemaking procedure are not evidence in this proceeding. What is reasonable is the ultimate finding of fact. The parties submitted no evidence on what would be a reasonable time within which to complete an audit. The Judges do not adopt this proposal.
The NAB and NRBNMLC proposed to redefine ATH to allow for a reduction in reported ATH for broadcast time devoted to talk radio. SoundExchange countered that NRBNMLC provided no evidence to justify a reduction different from the one established (and used) by NPR stations. SoundExchange pointed out that all the rates would have to be recalculated if the basic assumption regarding ATH is changed at this point. The Judges agreed. If the definition changed, the threshold would need to change as well, and there was no basis in the record for making those changes. The Judges did not adopt this change.
The NAB and iHeart proposed a change in the definition of broadcast retransmission (simulcast) to cover anything that is at least 51% identical to its antecedent terrestrial broadcast. This proposal was a companion proposal to the NAB's proposal of separate royalty rates for simulcasters. The Judges declined to establish separate rates for simulcasters and therefore did not include a definition of “broadcast retransmission” in the new regulations.
The NAB and NRBNMLC proposed to change the definition of Broadcaster, but did not provide a reason for the change. The Judges determined not to establish separate royalty rates for simulcasts by over-the-air broadcasters, obviating the need for a definition of “broadcaster” in the regulations. The Judges did not, therefore, adopt this proposed change.
In the Rehearing context, SoundExchange asked the Judges to change the definition of “Commercial Webcaster.” Motion at 10. As written in the original “Exhibit A” to the Determination, the definition of Commercial Webcaster excluded “an Educational Webcaster,
No participant in the hearing self-identified as a public broadcasting entity. Presumably, if there were an entity satisfying the statutory definition of a public broadcaster that was excluded by agreement from the settlement memorialized in Subpart D of the revamped regulations, the excluded entity would be treated as a noncommercial webcaster or a noncommercial educational webcaster, as the case may be.
The Judges have added a definition of “public broadcaster” to section 380.7, cross-referencing Subpart D.
In the current regulations, a “performance” is defined as “each instance in which any portion of a sound recording is publicly performed to a listener . . . .”
Pandora sought to add “in the United States” to the definition. The NAB and NRBNMLC asked for an alternate parenthetical description and a reference to the section in the Copyright Act regarding performances that do not require a license. More substantively, the NAB and NRBNMLC also added two exclusions to the definition, one regarding performances of very short duration and one very technical one regarding second connections from the same IP address. SoundExchange argued that rights owners should be compensated for all uses of their works, and thus that services should pay for performances even if they are of brief duration or the service deems them to be “skips.” SoundExchange also pointed out that the proposed rates were calculated based on the current statutory definition of “performance” and that any narrowing of the definition would require adjustments to the proposals. The second exclusion is not necessary because SoundExchange's witness, Mr. Bender, agreed that reconnections are not performances under the current regulations, which specify that a “performance” requires a listener.
The definition of performance in the regulations has long been established. The NAB and NRBNMLC argued that performances of very short duration are of no value to the listener or the service, and they pointed out that listeners cannot skip songs on their services. The Judges agreed that performance as it has been defined should continue to apply. The Judges did not adopt these changes.
In its Supplement, SoundExchange objected to the Judges' “linguistic changes” to the definition of “performance” in section 380.7. Supplement at 5. The Judges accepted SoundExchange's concern that the new language may harbor an ambiguity. No party objected to SoundExchange's request for modification of the definition. The Judges made the requested modification.
SoundExchange proposed that the regulations allow non-CPAs to perform audits if they have the requisite industry-specific expertise, arguing that it is difficult to find CPAs with the needed expertise and that other actors in the market allow content owners to audit royalty payments. The NAB and NRBNMLC countered with the argument that CPAs inspire confidence in the audit results because of the standards of their profession and that they can rely on experts in the industry to assist them if necessary. SoundExchange had argued in past proceedings for a change to allow in-house auditors to perform audits. The Judges had rejected that change. Final Rule and Order, Docket No. 2005-1 CRB DTRA (“Web II”), 72 FR 24084, 24109 (May 1, 2007). For the same reasons,
The Judges did, however, adopt language proposed by the NAB and NRBNMLC concerting the licensing of an auditor. In its Rehearing Motion, SoundExchange objected to the addition of a requirement that a Qualified Auditor be licensed in the jurisdiction in which it conducts the audit. Motion at 8-9. The NAB had requested this additional requirement to qualify an auditor as part of its proposed terms. NAB Proposed Rates and Terms at 3 (Tab B to NAB CWDS Vol. 1). SoundExchange asserted that the additional jurisdictional licensure requirement was not supported by the record. This requirement provides assurance that the auditor will be accountable and amenable to local governance in the jurisdiction in which it operates. Differences in ethical standards and sanctions for CPAs among jurisdictions might be small, but the requirement that the auditor submit itself to the jurisdiction of the local CPA governing bodies and local courts is significant. The NAB's suggestion is supported by the testimony of Professor Roman Weil and, therefore, was not without support in the record.
The NAB proposed a revision to the minimum fee provision that removed fees for individual channels, leaving only fees for individual
While the Judges rejected SoundExchange's objections to the royalty fee adjustment adopted in the Determination, the Judges acknowledged that the regulation should be clarified so that, in rounding to the nearest fourth decimal place, it is not understood to create a meaningful deviation from the unrounded real rate. Accordingly the Judges adopted a change to the regulation providing for annual royalty fee adjustment in order to clarify the Judges' intent with regard to, and provide examples of, calculating the indexed increase, if any.
The NAB proposed a waiver of census reporting on any material that is transmitted by a simulcaster that is programmed by a third party,
The NAB and NRBNMLC proposed that the regulation regarding distribution of royalties provide relief from reporting requirements for small broadcasters and those noncommercial webcasters that are “exempt from the report of use requirements contained in § 370.4”. NAB Proposed Terms at 6; NRBNMLC Amended Proposed Rates and Terms at 6. This is an argument the NAB and NRBNMLC make in the pending rulemaking proceeding and did not make in this proceeding other than to add the language to their proposed terms. SoundExchange's response is lodged in the rulemaking proceeding.
The Judges will set statutory rates for the year 2016. For the years 2017 through 2020, the rates shall be adjusted to reflect any inflation or deflation, as measured by changes in a particular Consumer Price Index (the CPI-U) announced by the Bureau of Labor Statistics (BLS), in November of the immediately preceding year, as described in the new regulations set forth in this determination. In this regard, the Judges concur with Dr. Shapiro, who testified that a regulatory provision requiring an annual price level adjustment is preferable to an implicit or explicit prediction of future inflation (or deflation). 5/19/15 Tr. 4608-10 (Shapiro).
The Judges shall also adjust any effective
Based on the analysis in this determination, the Judges shall set two separate rates for commercial noninteractive webcasting. One rate shall apply to performances on
The Judges have identified two usable benchmark rates for commercial noninteractive subscription services for 2016.
The first is the steering-adjusted rate derived from the benchmark developed by Dr. Rubinfeld on behalf of SoundExchange. Dr. Rubinfeld established a subscription-based benchmark rate of $0.002376. SX Ex. 59 (Rubinfeld CWDT Ex. 16(a);
As noted in this determination, the Judges apply a steering adjustment to this benchmark rate to reflect the rate-reducing effect of steering as indicated in the Pandora/Merlin Agreement.
(1) The unsteered subscription service rate for
(2) Pandora's effective rate at the [REDACTED]% (low end) of steering for
(3) Dr. Shapiro's $0.002238 steered rate for 2016 includes a 2.2%
(4) Backing out that 2.2% inflation factor indicates a
(5) Adjusting for the actual inflation in 2015 of 0.5% (announced by the BLS on December 15, 2015
(6) The unsteered 2015 subscription service rate of $0.[REDACTED] (step 1) minus the steered rate of $0.0022 equals $0.0003.
(7) The percentage change in the subscription service rate for 2015 is 12% (
Accordingly, Dr. Rubinfeld's proposed benchmark rate of $0.002376 must be reduced by 12% to reflect an effectively competitive rate. A reduction of 12% brings that subscription service rate to $0.0021 (rounded).
However, Dr. Rubinfeld's data covered the period 2011 through 2014. As noted
The second steering-based subscription rate that the Judges credit is the rate in the Pandora/Merlin Agreement, which already incorporates a steering adjustment. That proposed benchmark rate (at 12.5% steering) is $0.002238, rounded to $0.0022.
Thus (and perhaps not surprisingly), the steering and inflation-adjusted subscription rates under both proposed benchmarks establish an extremely tight zone of reasonableness, separated by only $0.0001.
Based on the foregoing, the Judges determine, in their discretion, that the appropriate per-play rate for royalties paid by licensees to licensors in the noninteractive subscription market under § 114 for the year 2016 is $0.0022. As discussed
The Judges have identified two usable benchmark rates for commercial noninteractive nonsubscription services for 2016. First, the Judges have identified the adjusted, effective average per-play rate derived from the iHeart/Warner Agreement. That rate, as developed,
Second, the Judges have identified the effective per-play rate in the Pandora/Merlin Agreement (with steering at [REDACTED]%) as a usable benchmark. The effective benchmark rate from that agreement is $0.[REDACTED].
Thus, the Judges identify a zone of reasonableness in this market segment as well. That is, the zone embraces a low effective rate of $0.[REDACTED] and high effective rate of $0.[REDACTED]. As noted earlier in this determination, it would be improper based on the present record, to set separate rates for Indies and Majors.
However, as the Judges have also explained,
Based on the foregoing factors, the Judges find that the appropriate statutory rate within this zone of rates, for nonsubscription, ad-supported (free-to-the-listener) services is $0.0017 per performance, as adjusted annually upward or downward to reflect changes in the Consumer Price Index over the preceding year, as set forth in the regulations.
In accordance with the Judges' analysis
The Judges have previously adopted the settlement agreement between SoundExchange, on one hand, and National Public Radio and the Corporation for Public Broadcasting, on the other, for simulcast transmissions by public radio stations.
The Judges have previously adopted the settlement agreement between SoundExchange, and College Broadcasters, Inc., for transmissions by Noncommercial Educational Webcasters (NEWs).
In accordance with the Judges' analysis
The royalty rate for ephemeral recordings under 17 U.S.C. 112(e) applicable to noncommercial webcasters shall be the same as the rate applicable to commercial webcasters; that is, royalties for ephemeral recordings shall be included within, and constitute 5% of the royalties such webcasters pay for performances of sound recordings under § 114 of the Act.
On the basis of the foregoing analysis and full consideration of the record, the Judges propound the rates and terms described in this Determination. The Register of Copyrights may review the Judges' Determination for legal error in resolving a material issue of substantive copyright law. The Librarian shall cause the Judges' Determination, and any correction thereto by the Register, to be published in the
Issue Date: March 4, 2016.
Copyright; sound recordings.
For the reasons set forth in the preamble, amend part 380 of title 37 of the Code of Federal Regulations as follows:
17 U.S.C. 112(e), 114(f), 804(b)(3).
(a)
(b)
(c)
(d)
(a)
(b)
(c)
(d)
(1)
(2)
(a)
(1) Such information as is necessary to calculate the accompanying royalty payment;
(2) The name, address, business title, telephone number, facsimile number (if any), electronic mail address (if any) and other contact information of the person to be contacted for information or questions concerning the content of the Statement of Account;
(3) The signature of:
(i) The Licensee or a duly authorized agent of Licensee;
(ii) A partner or delegate if the Licensee is a partnership; or
(iii) An officer of the corporation if the Licensee is a corporation.
(4) The printed or typewritten name of the person signing the Statement of Account;
(5) If the Licensee is a partnership or corporation, the title or official position held in the partnership or corporation by the person signing the Statement of Account;
(6) A certification of the capacity of the person signing;
(7) The date of signature; and
(8) An attestation to the following effect:
I, the undersigned owner/officer/partner/agent of the Licensee have examined this Statement of Account and hereby state that it is true, accurate, and complete to my knowledge after reasonable due diligence and that it fairly presents, in all material respects,
(b)
(a)
(2) The Collective must use its best efforts to identify and locate copyright owners and featured artists in order to distribute royalties payable to them under § 112(e) or 114(d)(2) of title 17, United States Code, or both. Such efforts must include, but not be limited to, searches in Copyright Office public records and published directories of sound recording copyright owners.
(b)
(c)
(d)
(2) If SoundExchange, Inc. should dissolve or cease to be governed by a board consisting of equal numbers of representatives of Copyright Owners and Performers, then it shall be replaced for the applicable royalty term by a successor Collective according to the following procedure:
(i) The nine Copyright Owner representatives and the nine Performer representatives on the SoundExchange board as of the last day preceding SoundExchange's cessation or dissolution shall vote by a majority to recommend that the Copyright Royalty Judges designate a successor and must file a petition with the Copyright Royalty Judges requesting that the Judges designate the named successor and setting forth the reasons therefor.
(ii) Within 30 days of receiving the petition, the Copyright Royalty Judges must issue an order designating the recommended Collective, unless the Judges find good cause not to make and publish the designation in the
(a)
(b)
(c)
(1) Those employees, agents, consultants, and independent contractors of the Collective, subject to an appropriate written confidentiality agreement, who are engaged in the collection and distribution of royalty payments hereunder and activities related directly thereto who require access to the Confidential Information for the purpose of performing their duties during the ordinary course of their work;
(2) A Qualified Auditor or outside counsel who is authorized to act on behalf of:
(i) The Collective with respect to verification of a Licensee's statement of account pursuant to this part 380; or
(ii) A Copyright Owner or Performer with respect to the verification of royalty distributions pursuant to this part 380;
(3) Copyright Owners and Performers, including their designated agents, whose works a Licensee used under the statutory licenses set forth in 17 U.S.C. 112(e) and 114 by the Licensee whose Confidential Information is being supplied, subject to an appropriate written confidentiality agreement, and including those employees, agents, consultants, and independent contractors of such Copyright Owners and Performers and their designated agents, subject to an appropriate written confidentiality agreement, who require access to the Confidential Information to perform their duties during the ordinary course of their work;
(4) Attorneys and other authorized agents of parties to proceedings under 17 U.S.C. 8, 112, 114, acting under an appropriate protective order.
(d)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(1) A performance of a sound recording that does not require a license (
(2) A performance of a sound recording for which the service has previously obtained a license from the Copyright Owner of such sound recording; and
(3) An incidental performance that both:
(i) Makes no more than incidental use of sound recordings including, but not limited to, brief musical transitions in and out of commercials or program
(ii) Does not contain an entire sound recording, other than ambient music that is background at a public event, and does not feature a particular sound recording of more than thirty seconds (as in the case of a sound recording used as a theme song).
(a)
(1) Commercial Webcasters: $0.0022 per performance for subscription services and $0.0017 per performance for nonsubscription services.
(2)
(b)
(c)
(d)
(b) * * *
(1) The Noncommercial Educational Webcaster shall, for such month and the remainder of the calendar year in which such month occurs, pay royalties in accordance, and otherwise comply, with the provisions of Part 380 Subparts A and B applicable to Noncommercial Webcasters;
(2) The Minimum Fee paid by the Noncommercial Educational Webcaster for such calendar year will be credited to the amounts payable under the provisions of Part 380 Subparts A and B applicable to Noncommercial Webcasters; and
(3) The Noncommercial Educational Webcaster shall, within 45 days after the end of each month, notify the Collective if it has made total transmissions in excess of 159,140 Aggregate Tuning Hours on a channel or station during that month; pay the Collective any amounts due under the provisions of Part 380 Subparts A and B applicable to Noncommercial Webcasters; and provide the Collective a statement of account pursuant to part 380, subpart A.
(c)
(b)
(b)
Approved By:
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
This final rule approves and implements Framework Adjustment 55 to the Northeast Multispecies Fishery Management Plan. This rule sets 2016-2018 catch limits for all 20 groundfish stocks, adjusts the groundfish at-sea monitoring program, and adopts several sector measures. This action is necessary to respond to updated scientific information and achieve the goals and objectives of the Fishery Management Plan. The final measures are intended to help prevent overfishing, rebuild overfished stocks, achieve optimum yield, and ensure that management measures are based on the best scientific information available.
Effective on May 1, 2016, except for the amendment to § 648.85(a)(3)(iii)(A), which is effective October 31, 2016.
Copies of Framework Adjustment 55, including the Environmental Assessment, the Regulatory Impact Review, and the Initial Regulatory Flexibility Analysis prepared in support of the proposed rule are available from Thomas A. Nies, Executive Director, New England Fishery Management Council, 50 Water Street, Mill 2, Newburyport, MA 01950. The supporting documents are also accessible via the Internet at:
Copies of each sector's final operations plan and contract, and the Fishing Year 2015-2020 Northeast Multispecies Sector Operations Plans and Contracts Programmatic Environmental Assessment, are available from the NMFS Greater Atlantic Regional Fisheries Office: John K. Bullard, Regional Administrator, National Marine Fisheries Service, 55 Great Republic Drive, Gloucester, MA 01930. These documents are also accessible via the Federal eRulemaking Portal:
Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this final rule may be submitted to NMFS, Greater Atlantic Regional Fisheries Office, 55 Great Republic Drive, Gloucester, MA 01930, and by email to
Aja Szumylo, Fishery Policy Analyst, phone: 978-281-9195; email:
This action approves and implements the management measures in Framework Adjustment 55 to the Northeast Multispecies Fishery Management Plan (FMP). The measures implemented in this final rule include:
• 2016-2018 specifications for all 20 groundfish stocks;
• 2016 shared U.S./Canada quotas for Georges Bank (GB) yellowtail flounder and Eastern GB cod and haddock;
• Modifications to the industry-funded sector at-sea monitoring program;
• Approval of a new sector;
• Modifications to the sector approval process;
• Adjustments to selective trawl gear requirements;
• Removal of the Gulf of Maine (GOM) cod prohibition for recreational anglers; and
• A mechanism for sectors to transfer GB cod quota from the Eastern U.S./Canada Area to the western area.
This action also implements a number of other measures that are not part of Framework 55, but that were considered under our authority specified in the Northeast Multispecies FMP. We are including these measures in Framework 55 for expediency purposes, and because these measures are related to the catch limits implemented in Framework 55. The additional measures implemented in this action are:
•
•
•
The Northeast Fisheries Science Center (NEFSC) conducted operational stock assessment updates in 2015 for all 20 groundfish stocks. The final report for the operational assessment updates is available at:
Status determination relative to reference points is no longer possible for GB cod and Atlantic halibut. The assessment peer review panel determined that available information for both stocks indicates they are still in poor condition and that stock size has not increased. Therefore, the panel recommended the status remain overfished for both stocks, consistent with the information from previous assessments. However, in the absence of fishing mortality estimates to compare to overfishing reference points, the
Although the review panel concluded that the overfishing status should be unknown for GB cod and halibut, the final NMFS determinations for these stocks are different from the review panel's recommendations. NMFS has developed a national approach to addressing common status determination situations for the purposes of completing the annual report to Congress on the Status of U.S. Fisheries and the Fisheries Stock Sustainability Index. For cases like GB cod and Atlantic halibut, where the stock assessment update is not accepted by the peer review process, NMFS bases the status determination on the most recent accepted assessment. Based on this approach, the stock status for GB cod will remain overfished, with overfishing occurring, consistent with the determination from the 2013 GB cod benchmark assessment. The status for Atlantic halibut will remain overfished, with overfishing not occurring, consistent with the 2012 assessment update for this stock. These status determinations will remain until an assessment can provide new reference points and/or numerical estimates of existing status determination criteria.
The numerical estimates for the status determination criteria for both stocks is still not available based on the results of the 2015 assessment updates, as reflected in Table 1. In the draft Framework 55 EA available to the Council when selecting preferred alternatives and taking final action, numerical estimates were not provided consistent with these results. However, following initial submission of Framework 55 to NFMS for review, and after the close of the public comment period on the proposed rule (81 FR 15003; March 21, 2016) and analysis, the Council changed the numerical estimates provided in the document to those from the previous 2013 GB cod assessment. Presumably, this change was made to provide estimates consistent with the assessment review panel's recommendation that the previous assessment is the best scientific information available for determining stock status. However, this change to the document was made after the Council took final action on Framework 55, and after close of the public comment period on the proposed rule and analysis, and is not consistent with our standard approach for developing numerical estimates for status determination criteria. When the stock assessment is not accepted, NMFS retains the status determination from the previous assessment because there are no new, or updated, numerical estimates of status determination criteria available to reliably evaluate whether stock status has changed. However, NMFS does not consider the numerical estimates of the status determination criteria from the previous assessment valid because the assessment update was not accepted.
The stock status changes for GB cod and halibut do not affect the rebuilding plans for these stocks. The rebuilding plan for GB cod has an end date of 2026, and the rebuilding plan for halibut has an end date of 2056. Although numerical estimates of status determination criteria are currently not available, to ensure that rebuilding progress is made, catch limits will continue to be set at levels that the Council's Scientific and Statistical Committee (SSC) determines will prevent overfishing. Additionally, at whatever point the stock assessment for GB cod and halibut can provide biomass estimates, these estimates will be used to evaluate progress towards the rebuilding targets.
As described in the proposed rule, eastern GB cod, eastern GB haddock, and GB yellowtail flounder are jointly managed with Canada under the United States/Canada Resource Sharing Understanding. This action adopts shared U.S./Canada quotas for these stocks for fishing year 2016 based on 2015 assessments and the recommendations of the Transboundary Management Guidance Committee (TMGC) (Table 3). For a more detailed discussion of the TMGC's 2016 catch advice, see the TMGC's guidance document at:
The regulations implementing the U.S./Canada Resource Sharing Understanding require that any overages of the U.S. quota for eastern GB cod, eastern GB haddock, or GB yellowtail flounder be deducted from the U.S. quota in the following fishing year. If catch information for the 2015 fishing year indicates that the U.S. fishery exceeded its quota for any of the shared stocks, we will reduce the respective U.S. quotas for the 2016 fishing year in a future management action, as close to May 1, 2016, as possible. If any fishery that is allocated a portion of the U.S. quota exceeds its allocation and causes an overage of the overall U.S. quota, the overage reduction would only be applied to that fishery's allocation in the following fishing year. This ensures that catch by one component of the fishery does not negatively affect another component of the fishery.
This action adopts catch limits for all 20 groundfish stocks for the 2016-2018 fishing years based on the 2015 operational assessment updates. Catch limit increases are adopted for 10 stocks; however, for a number of stocks, the catch limits adopted in this action are substantially lower than the catch limits set for the 2015 fishing year (with decreases ranging from 14 to 67 percent). The catch limits implemented in this action, including overfishing limits (OFLs), acceptable biological catches (ABCs), and annual catch limits (ACLs), can be found in Tables 4 through 11. A summary of how these catch limits were developed, including the distribution to the various fishery components, was provided in the proposed rule and is not repeated here. Additional information on the development of these catch limits is also provided in the Framework 55 EA and its supporting appendices. We have adjusted the groundfish sub-ACL for GB cod for 2017 and 2018 in Tables 6 and 7 to correct a transcription error in the proposed rule. The sub-ACL for 2017 and 2018 was incorrectly listed as 608 mt, but should have been listed as 997 mt. Although the 2017 and 2018 groundfish sub-ACL was listed incorrectly, the components of the groundfish sub-ACL, namely the preliminary sector sub-ACL (975 mt) and the preliminary common pool sub-ACL (22 mt), were correct in the proposed rule.
The sector and common pool catch limits implemented in this action are based on potential sector contributions for fishing year 2016 and fishing year
Framework 53 established a mechanism for setting default catch limits in the event a future management action is delayed. If final catch limits have not been implemented by the start of a fishing year on May 1, then default catch limits are set at 35 percent of the previous year's catch limit, effective through July 31 of that fishing year. If this value exceeds the Council's recommendation for the upcoming fishing year, the default catch limit must be reduced to an amount equal to the Council's recommendation. Because groundfish vessels are not able to fish if final catch limits have not been implemented, this measure was established to prevent disruption to the groundfish fishery. Additional description of the default catch limit mechanism is provided in the preamble to the Framework 53 final rule (80 FR 25110; May 1, 2015).
This rule announces default catch limits for the 2018 fishing year for GB yellowtail flounder, and for the 2019 fishing year for all remaining groundfish stocks. Default catch limits for the 2018 fishing year for GB yellowtail flounder were inadvertently omitted in the proposed rule, but are included here because the Council only recommended specifications for the 2016 and 2017 fishing year for this stock. The GB yellowtail flounder default specifications will become effective May 1, 2018, through July 31, 2018, unless otherwise replaced by final specifications. Similarly, for the remaining groundfish stocks, default specifications will become effective May 1, 2019, through July 31, 2019, unless otherwise replaced by final specifications. The default catch limits for 2018 GB yellowtail flounder are summarized in Table 12, and the default catch limits for 2019 for all other stocks are summarized in Table 13.
The preliminary sector and common pool sub-ACLs in Table 12 and 13 are based on existing 2015 sector rosters, and will be adjusted based on rosters from the 2017 or 2018 fishing years. In addition, prior to the start of the 2018 or 2019 fishing years, we will evaluate whether any of the default catch limits announced in this rule exceed the Council's recommendations for 2018 for GB yellowtail flounder, or for 2019 for the remaining groundfish stocks. If necessary, we will announce adjustments prior to implementing the default specifications.
The midwater trawl fishery is the only non-groundfish fishery with an inseason accountability measure for its groundfish allocation. When the GOM or GB haddock catch cap specified for the default specifications period is caught, the directed herring fishery would be closed for all herring vessels fishing with midwater trawl gear for the remainder of the default specifications time period, unless final specifications were set prior to July 31. For other non-groundfish fisheries that receive a groundfish allocation (
This action adjusts the groundfish sector at-sea monitoring (ASM) program to ensure the likelihood that discards for all groundfish stocks are monitored at a 30-percent coefficient of variation (CV) while making the program more cost-effective. Due to changes in the 2015 revision to the Standardized Bycatch Reporting Methodology (SBRM) Amendment (80 FR 37182; June 30, 2015) that limit Agency discretion in how Congressional funding is used to provide observer coverage, we are unable to pay for industry's portion of ASM costs for the 2016 fishing year. A description of the existing industry-funded ASM program, and historic determination of ASM coverage levels, is included in the preamble to the proposed rule and is not repeated here.
This final rule modifies the method used to set the target coverage level for the industry-funded ASM program based on 5 years of experience with ASM coverage operations for groundfish sectors and evaluation of the accumulated discard data. These adjustments provide for setting target coverage levels sufficient to meet the 30-percent CV requirement while making the program more cost effective and smooth the fluctuations in the annual coverage level to provide additional stability for the fishing industry. The changes in this action remove ASM coverage for a certain subset of sector trips, use more years of discard information to predict ASM coverage levels, and base the target coverage level on the predictions for stocks that would be at a higher risk for an error in the discard estimate.
None of the adjustments implemented in this action remove our obligation under Amendment 16 and Framework 48 to ensure sufficient ASM coverage to achieve a 30-percent CV for all stocks, nor do they change our requirement to monitor catch sufficiently to prevent overfishing. The changes result in a target coverage level of 14 percent for the 2016 fishing year, including SBRM coverage paid in full by the Northeast Fisheries Observer Program (NEFOP). Assuming NEFOP covers 4 percent of trips as it has in recent years, this action results in sectors paying for ASM on approximately 10 percent of their vessels' trips in 2016.
We have determined that all of the adjustments to the ASM program in Framework 55 are consistent with the Northeast Multispecies FMP, including Amendment 16 and Framework 48, the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) and its National Standards, and other applicable law. Amendment 16 stated that the primary goal of at-sea monitors is to verify area fished, catch, and discards by species and gear type. Amendment 16's overall goals included achieving goals of economic efficiency and minimizing adverse economic impacts on fishing communities to the extent practicable. Framework 48 clarified the objectives of the ASM program and included these goals. It further elaborated that target ASM coverage levels must balance the goals and objectives of groundfish monitoring programs, the National Standards, and the requirements of the Magnuson-Stevens Act, including, but not limited to, costs to us and sector vessels. In making our determination of the annual ASM coverage level, we must take into account the National Standards, in particular National Standards 1, 2, 5, 7, 8, and 9. These National Standards specifically speak to preventing overfishing; using the best scientific information available; minimizing costs and avoiding duplications where practicable; efficiency in the use of fishery resources; taking into account impacts on fishing communities and minimizing adverse economic impacts to the extent practicable; and minimizing bycatch to the extent practicable. The adjustments in Framework 55 are consistent with Amendment 16, Framework 48, and the National Standards. They further refine our ability to address groundfish monitoring objectives while setting a more efficient target ASM coverage level.
The measures included in this action are reasonable, narrowly-focused adjustments to the method used to calculate the target ASM coverage level for 2016 and future fishing years. Rather than specifying a fixed ASM coverage target for all future years, this action refines the process we use for predicting the level of ASM coverage necessary in a given year to achieve the 30-percent CV requirement. While these adjustments result in a lower target ASM coverage level for the 2016 fishing year compared to previous years, there is no guarantee that the changes will result in reduced target coverage levels in future fishing years (
We are only able to determine whether the target coverage level reaches the 30-percent CV for all stocks in hindsight, after a fishing year is over. Thus, while a target ASM coverage level is expected to generate a 30-percent CV on discard estimates for each stock, there is no guarantee that the required coverage level will be met or result in a 30-percent CV across all stocks due to changes in fishing effort and observed fishing activity that may happen in a given fishing year. However, during the 2010-2014 fishing years, the target coverage level was in excess of the coverage level that would have been necessary to reach at least a 30-percent CV for almost every stock.
We expect the 2016 target coverage level to achieve results consistent with prior years based on applying the 2016 target coverage level to the 2010-2014 fishing year data. For example, over the five years from 2010-2014, coverage levels of 14 percent would have achieved a 30-percent CV or better for 95 out of the 100 monitored stocks (
Further, the risk of not achieving the required CV level for these stocks is mitigated by a number of factors. For example, a sizeable portion of the SNE/MA yellowtail flounder ACL has been caught over the last three years (58-70 percent), but less than 10 percent of total catch was made up of discards. Redfish and GOM winter flounder were underutilized over the last three fishing years (less than 50 percent of the ACL caught) and less than 10 percent of their total catch was made up of discards. Thus, even in the unexpected event of not achieving a 30-percent CV, the risk to these stocks of erring in the discard estimates is very low.
Further, the ASM program is only a portion of overall sector monitoring. The ASM program provides a basis for sector discard estimation. For most allocated stocks, discards are only a small portion of total catch. To monitor total sector catch, not just discards, NMFS and sector managers rely on a number of data sources, including NEFOP data, vessel monitoring systems (VMS), vessel trip reports, VMS catch reports, and dealer reports, all subject to extensive reconciliation processes. In addition, due to joint and severable liability of sector members for certain violations, including illegal discarding and misreporting of catch, there is a strong incentive for sector members to self-enforce monitoring and reporting requirements to ensure the sector has the most accurate information available. To account for any lack of absolute precision and accuracy in estimating overall catch by sector vessels, uncertainty buffers are included when establishing commercial groundfish fishery catch limits. In light of these requirements, and based on the available analyses of groundfish monitoring programs, we conclude that the sector monitoring requirements overall, including the adjustments to the method used to set the ASM coverage level in conjunction with other available data, are sufficient to monitor sector allocations and prevent overfishing.
From 2012 to 2015, we set coverage levels to ensure that at least 80 percent of the discarded pounds of all groundfish stocks were estimated at a 30-percent CV or better to maintain the same statistical quality achieved in the 2010 fishing year. We applied this standard during years when Congress appropriated funds to pay for industry costs for the ASM program (2010 and 2011), and in other years when we were able to fund industry's costs for ASM (2012—2014, and part of 2015). In some years, applying this standard resulted in higher coverage levels than if the standard were not applied. However, this additional criterion was not necessary to satisfy the CV requirement of the ASM program, or to accurately monitor sector catches, and was not required by the Northeast Multispecies FMP. This action clarifies the Council's intent that target ASM coverage levels for sectors should be set using only realized stock-level CVs, and should not be set using the additional administrative standard of monitoring 80 percent of discard pounds at a 30-percent CV or better.
This Council action removes the ASM coverage requirement for sector trips using gillnets with extra-large mesh (10 inches (25.4 cm) or greater) in the SNE/MA and Inshore GB Broad Stock Areas. A majority of catch on these trips is of non-groundfish stocks such as skates, monkfish, and dogfish, with minimal or no groundfish catch. As a result, applying the same level of coverage on these trips as targeted groundfish trips does not contribute to improving the overall precision and accuracy of sector discard estimates, and would not be an efficient use of the limited resources for the ASM program. These trips will still be subject to SBRM coverage through NEFOP, and monitoring coverage levels would be consistent with non-sector trips that target non-groundfish species.
This measure is intended to reduce ASM costs to sectors with members that take this type of extra-large mesh gillnet trip. Reducing ASM coverage for these trips allows resources to be used to monitor trips that catch more groundfish, which could improve discard estimates for directed groundfish trips. All other sector trips will still be required to meet the 30-percent CV standard at a minimum. Changes in stock size or fishing behavior on these trips could change the amount of groundfish bycatch in future fishing years. However, data from 2012 to 2014 shows that groundfish catch has represented less than 5 percent of total catch on a majority of trips, and large changes are not expected. We will continue to evaluate this measure in the future to make sure bycatch levels remain low.
Because this subset of trips will have a different coverage level than other sector trips in the SNE/MA and Inshore GB Broad Stock Areas, we will create a separate discard strata for each stock caught on extra-large gillnet trips in order to ensure the different coverage levels do not bias discard estimates. At this time, no adjustments to the current notification procedures appear necessary to implement this measure. Sector vessels already declare gear type and Broad Stock Area to be fished in the Pre-Trip Notification System, which will allow us to easily identify trips that are exempt from ASM coverage.
To minimize the possibility that this measure could be used to avoid ASM coverage, only vessels declared into the SNE/MA and/or Inshore GB Broad Stock Areas using extra-large mesh gillnets will be exempt from the ASM coverage requirement. Vessels using extra-large mesh gillnet declaring into the GOM or Offshore GB Broad Stock Areas will not be exempt from the ASM coverage requirement. In addition, a vessel is already prohibited from changing its fishing plan for a trip once a waiver from coverage has been issued.
Framework 48 implemented a similar measure exempting the subset of sector trips declared into the SNE/MA Broad Stock Area on a monkfish Day-At-Sea (DAS) and using extra-large mesh gillnets from the standard ASM coverage level. The Framework 48 measure gave us the authority to specify some lower coverage level for these trips on an annual basis when determining coverage levels for all other sector trips. Since this measure was implemented at the start of the 2013 fishing year, the ASM coverage level for these trips has been set to zero, and these trips have only been subject to NEFOP coverage. The measure adopted in this action supersedes the Framework 48 measure because it entirely removes the ASM coverage requirement from these trips.
Currently, data from the most recent fishing year are used to predict the target ASM coverage level for the upcoming fishing year. For example, data from the 2013 groundfish fishing year were used to set the target ASM coverage level for the 2015 fishing year. When a single year of data is used to determine the target coverage level, the entire coverage level is driven by the variability in discards in a single stock. This variability is primarily due to inter-annual changes in management measures and fishing activity. Though the target ASM coverage level has ranged from 22 to 26 percent for the last four fishing years, there is the potential that variability could result in large fluctuations of target ASM coverage levels in the future, and result in target coverage levels that are well above the level necessary to meet the 30-percent CV for most stocks. For example, available analyses indicates that, using the status quo methodology, the ASM coverage level would be 41 percent in 2016 compared to the current 2015 rate of 24 percent. Based on a 2016 target coverage level of 41 percent, the coverage level that would have been necessary to meet a 30-percent CV in 2014 would be exceeded by 15-39 percent for 19 of the 20 stocks.
The measure adopted in this action will use information from the most recent three full fishing years to predict target ASM coverage levels for the upcoming fishing year. For example, data from the 2012 to 2014 fishing years were used to predict the target ASM
The measure adopted in this action will filter the application of the 30-percent CV standard for determining target coverage levels consistent with existing goals for the ASM program. Stocks that meet all of the following criteria will not be used as the predictor for the annual target ASM coverage level for all groundfish stocks: (1) Not overfished; (2) Overfishing is not occurring; (3) Not fully utilized (less than 75 percent of sector sub-ACL harvested); and (4) Discards are less than 10 percent of total catch.
None of the adjustments in this Framework, including this measure, eliminates the 30-percent CV standard or removes the Agency's requirement to prevent overfishing. Rather, this measure is intended to reflect the Council's policy that the target ASM coverage level should be based on stocks that are overfished, are subject to overfishing, or are more fully utilized—that is, stocks for which it is critical to attempt to fully account for past variability in discard estimates. Because stocks that meet all four of the filtering criteria are healthy and not fully utilized, there is a lower risk in erring in the discard estimate. Additionally, using these stocks to predict the target coverage could lead to coverage levels that are not necessary to accurately monitor sector catch.
For the 2016 fishing year, preliminary analysis shows that, under the status quo methodology for determining the ASM target coverage level, redfish would drive the target coverage level at 37 percent. However, redfish is a healthy stock, and current biomass is well above the biomass threshold. Redfish also meets all of the filtering criteria—the stock is currently not overfished, overfishing is not occurring, only 45 percent of the sector sub-ACL was harvested in 2014, and only 3 percent of total catch was made up of discards. Also, because of the high year-to-year variability in the coverage necessary to achieve the 30-percent CV standard for redfish, we expect the target coverage level of 14 percent to meet the 30-percent CV requirement for 2016.
As described in the preamble to the proposed rule, Framework Adjustment 48 revised and clarified the goals and objectives of groundfish monitoring programs to include, among other things, improving the documentation of catch, reducing the cost of monitoring, and providing additional data streams for stock assessments. However, Framework 48 did not prioritize these goals and objectives. This rulemaking clarifies that, consistent with Amendment 16, the primary goal of the sector ASM program is to verify area fished, catch and discards by species, and by gear type, and that when the Agency sets the target coverage rate, it should consider achieving this goal in the most cost effective manner practicable, which is consistent with Magnuson-Stevens Act requirements and Amendment 16's overall goal. This clarification of the program goals would not affect the target ASM coverage levels.
This action approves the formation of a new sector, Sustainable Harvest Sector II, for operation in the 2016 fishing year. Allocations for Sustainable Harvest Sector II are included in section “8. Sector Measures for the 2016 Fishing Year” based on enrollment information submitted for this sector as of March 15, 2016. All permits enrolled in this sector, and the vessels associated with those permits, have until April 30, 2016, to withdraw from the sector and fish in the common pool for the 2016 fishing year. Final 2016 sector allocations, based upon final rosters, will be announced as soon as possible after the start of the 2016 fishing year.
This action modifies the sector approval process so that new sectors no longer have to be approved through an FMP amendment or framework adjustment. Under the process implemented in this final rule, new sectors must submit operations plans to both the Council and NMFS no later than September 1 of the fishing year prior to the fishing year they intend to begin operations. For example, if a new sector wishes to operate for the 2017 fishing year starting on May 1, 2017, it must submit its operations plan to the Council and NMFS no later than September 1, 2016.
Once NMFS receives operations plans for any proposed sectors, it will notify the Council in writing of its intent to consider approving new sectors. NMFS will present the submitted sector operations plans and any supporting analysis for the new sector at a Groundfish Committee meeting and a Council meeting. After its review, the Council will submit comments to NMFS in writing and indicate whether it endorses the formation of the new sector. NMFS will then make a final determination about new sector consistent with the Administrative Procedure Act. NMFS will not initiate a rulemaking to make final determinations on the formation of the new sector without the Council's endorsement.
This modified process is intended to shorten the timeline for, and increase the flexibility of, the sector approval process, while maintaining the same opportunities for Council approval and public involvement that the current process provides. No other aspects of the sector formation process, including the content of sector operations plan submissions, change as a result of this measure.
This action modifies requirements for the haddock separator trawl to improve the enforceability of this selective trawl gear. In many haddock separator trawls, the separator panel is made with the same mesh color as the net, which makes it difficult for enforcement to identify whether the gear is properly configured during vessel inspections. This rule requires the separator panel to be a contrasting color to the portions of the net that it separates in order to make
This final rule removes the prohibition on recreational possession of GOM cod that was established as part of the protection measures implemented for this stock in Framework 53. We currently set recreational management measures for GOM cod and haddock in consultation with the Council, and have the authority to modify bag limits, size limits, and seasons. The Framework 53 prohibition on the recreational possession of GOM cod was implemented as a permanent provision in the Northeast Multispecies FMP. In removing the permanent prohibition on recreational possession of GOM cod, this measure returns the authority to us to set the recreational bag limit for GOM cod. We are implementing the 2016 recreational management measures for GOM cod and haddock in a separate, concurrent rulemaking to ensure the recreational fishery does not exceed its allocations for these stocks.
This rule allows sectors to “convert” their eastern GB cod allocation into western GB cod allocation using the same process previously implemented for GB haddock in Framework Adjustment 51 (77 FR 22421; April 22, 2014). This measure is intended to prevent the Western U.S./Canada Area from prematurely closing to a sector before its overall GB cod allocation has been caught, and provides additional flexibility for sectors to harvest their GB cod allocations.
Sectors are allowed to convert eastern GB cod allocation into western GB cod allocation at any time during the fishing year, and up to 2 weeks into the following fishing year to cover any overage during the previous fishing year. A sector's proposed allocation conversion would be referred to, and approved by, NMFS based on general issues, such as whether the sector is complying with reporting or other administrative requirements, including weekly sector reports, or member vessel compliance with Vessel Trip Reporting requirements. Based on these factors, we would notify the sector if the conversion is approved or disapproved. Consistent with the existing GB haddock transfer provision, we intend to use member vessel compliance with Vessel Trip Reporting requirements as the basis for approving, or disapproving, a reallocation of eastern GB quota to the Western U.S./Canada Area. If we include additional criteria in the future as the basis for approving or disapproving reallocation of these requests, we will do so consistent with the Administrative Procedure Act. This is identical to the process used for reviewing, and approving, quota transfer requests between sectors.
The responsibility for ensuring that sufficient allocation is available to cover the conversion is the responsibility of the sector. This measure would also extend to state-operated permit banks. Any conversion of eastern GB cod allocation into western GB cod allocation may be made only within a sector, or permit bank, and not between sectors or permit banks. In addition, once a portion of eastern GB cod allocation has been converted to western GB cod allocation, that portion of allocation remains western GB cod for the remainder of the fishing year. Western GB cod allocation may not be converted to eastern GB cod allocation. This measure does not change the requirement that sector vessels may only catch their eastern GB cod allocation in the Eastern U.S./Canada Area, and may only catch the remainder of their GB cod allocation in the Western U.S./Canada Area.
The total catch limit for GB cod includes the U.S. quota for eastern GB cod, so this measure does not jeopardize the total ACL for GB cod, or the U.S. quota for the eastern portion of the stock. A sector would also still be required to stop fishing in the Eastern U.S./Canada Area once its entire eastern GB cod allocation was caught, or in the Western U.S./Canada Area once it's western GB cod allocation was caught, or at least until it leased in additional quota. This ensures sufficient accountability for sector catch that will help prevent overages of any GB cod catch limit. Although we are approving this measure, we recommend that the Council occasionally review this measure in the future to ensure that it is still appropriate, particularly if there is a drastic change in the stock assessment for GB cod or its eastern management unit.
This action also includes measures necessary to implement sector operations plan, including sector regulatory exemptions and annual catch entitlements, for all 19 sectors for the 2016 fishing year. In past years, sector operations measures have been approved through a separate, concurrent rulemaking, but are included in this rulemaking for efficiency.
A total of 19 sectors are approved to operate in the 2016 fishing year, including:
• Seventeen sectors that had operations plans previously approved for the 2016 fishing year (see the Final Rule for 2015 and 2016 Sector Operations Plans and 2015 Contracts and Allocation of Northeast Multispecies Annual Catch Entitlements; 80 FR 25143; May 1, 2015);
• Sustainable Harvest Sector II, discussed in section “7. Other Framework 55 Measures,” which was approved for formation as part of Framework 55; and
• Northeast Fishery Sector 12, which has not operated since 2013, but submitted an operations plan that is approved for the 2016 fishing year.
Copies of the operations plans and contracts, and the EA, for all approved sectors are available at:
Based on anticipated 2016 sector enrollment as of March 15, 2016, we have projected sector allocations for the 2016 fishing year in this final rule. All permits enrolled in a sector, and the vessels associated with those permits, have until April 30, 2016, to withdraw from a sector and fish in the common pool for the 2016 fishing year. We will publish final sector annual catch entitlements (ACEs) and common pool sub-ACL totals, based upon final rosters, as soon as possible after the start of the 2016 fishing year, and again after the start of the 2017 and 2018 fishing years.
The sector allocations in this final rule are based on the 2016 fishing year specifications described above under “3. Catch Limits for the 2016-2018 Fishing Years.” We calculate the sector's allocation for each stock by summing its members' potential sector contributions (PSC) for a stock, as shown in Table 14. The information presented in Table 14 is the total percentage of the commercial sub-ACL each sector would receive for
We do not assign an individual permit separate PSCs for the Eastern GB cod or Eastern GB haddock; instead, we assign a permit a PSC for the GB cod stock and GB haddock stock. Each sector's GB cod and GB haddock allocations are then divided into an Eastern ACE and a Western ACE, based on each sector's percentage of the GB cod and GB haddock ACLs. For example, if a sector is allocated 4 percent of the GB cod ACL and 6 percent of the GB haddock ACL, the sector is allocated 4 percent of the commercial Eastern U.S./Canada Area GB cod TAC and 6 percent of the commercial Eastern U.S./Canada Area GB haddock TAC as its Eastern GB cod and haddock ACEs. These amounts are then subtracted from the sector's overall GB cod and haddock allocations to determine its Western GB cod and haddock ACEs. Framework 51 implemented a mechanism that allows sectors to “convert” their Eastern GB haddock allocation into Western GB haddock allocation (79 FR 22421; April 22, 2014) and fish that converted ACE in Western GB. This rule approves a similar measure for GB cod under “6. Other Framework 55 Measures.”
At the start of the 2016 fishing year, we will withhold 20 percent of each sector's 2016 fishing year allocation until we finalize fishing year 2015 catch information. In the past, we have typically finalized the prior year's catch during the summer months. We expect to finalize 2015 catch information consistent with this past practice. We will allow sectors to transfer ACE from the 2015 fishing year for two weeks of the fishing year following our completion of year-end catch accounting to reduce or eliminate any 2015 fishing year overages. If necessary, we will reduce any sector's 2016 fishing year allocation to account for any remaining overages in the 2015 fishing year. We will notify the Council and sector managers of this deadline in writing and will announce this decision on our Web site at:
Sectors can carry over up to 10 percent of the unused initial allocation for each stock into the next fishing year. However, the maximum available carryover may be reduced if up to 10 percent of the unused sector sub-ACL, plus the total ACL for the upcoming fishing year, exceeds the total ABC. Based on the catch limits implemented in this action, we evaluated whether the total potential catch in the 2016 fishing year would exceed the ABC if sectors carried over the maximum 10-percent of unused allocation from 2015 to 2016 (Table 17). Table 17 corrects errors presented in that table in the proposed rule, and provides analysis of maximum carryover for pollock, which was omitted from the table in the proposed rule. Under this scenario, total potential catch would exceed the 2016 ABC for all stocks except for GOM haddock and GB haddock. As a result, we expect we will need to adjust the maximum amount of unused allocation that a sector can carry forward from 2015 to 2016 (down from 10 percent). However, it is possible that not all sectors will have 10 percent of unused allocation at the end of the 2015 fishing year. We will make final adjustments to the maximum carryover possible for each sector based on the final 2015 catch for the sectors, each sector's total unused allocation, and the cumulative PSCs of vessels/permits participating in the sector. We will announce this adjustment as close to May 1, 2016, as possible.
Based on the catch limits adopted in this rule, the
Because sectors elect to receive an allocation under a quota-based system, the Northeast Multispecies FMP grants sector vessels several “universal” exemptions from the FMP's effort controls. These universal exemptions apply to: Trip limits on allocated stocks; the GB Seasonal Closure Area; NE multispecies DAS restrictions; the requirement to use a 6.5-inch (16.5-cm) mesh codend when fishing with selective gear on GB; and portions of the GOM Cod Protection Closures. The Northeast Multispecies FMP prohibits sectors from requesting exemptions from permitting restrictions, gear restrictions designed to minimize habitat impacts, and reporting requirements. In addition to the “universal” exemptions approved under Amendment 16 to the FMP, all 19 sectors are granted 19 additional exemptions from the NE multispecies regulations for the 2016 fishing year. These exemptions were previously approved in the sector operations rulemaking for the 2015 and 2016 fishing years. Descriptions of the current range of approved exemptions are included in the preamble to the Final Rule for 2015 and 2016 Sector Operations Plans and 2015 Contracts (80 FR 25143; May 1, 2015) and are not repeated here.
We are approving an additional sector exemption intended to complement the Framework 55 measure that removes the ASM coverage requirement for sector trips using 10-inch (25.4-cm) mesh, or larger, gillnet gear and fishing exclusively in the inshore GB and SNE/MA broad stock areas (described in section “6. Groundfish At-Sea Monitoring Program Adjustments”). The sector exemption allows vessels on these ASM-excluded sector trips to also target dogfish using 6.5-inch (16.5-cm) mesh gillnet gear within the footprint and season of either the Nantucket Shoals Dogfish Exemption Area (June 1 to October 15), the Eastern Area of the Cape Cod Spiny Dogfish Exemption Area (June 1 to December 31), or the Southern New England Dogfish Gillnet Exemption Area (May 1 to October 31). Allowing sectors to participate in these exempted fisheries for dogfish while simultaneously being excluded from ASM coverage on extra-large mesh sector trips (
We intend to monitor the use of this exemption using the existing vessel trip report (VTR) requirement. Vessels are currently required to send separate VTRs for each statistical area in which fishing occurred on a trip, and for each gear type used on a trip. Thus, consistent with the current regulations, vessels must submit a VTR to document catch on the extra-large mesh portion of the trip, and a separate VTR for the portion of the trip in which deploy the vessel deploys 6.5-inch (16.5-in) mesh gillnet gear within the footprint and season of the existing dogfish exempted areas. We will closely monitor this exemption to evaluate whether additional reporting measures are necessary, and will propose any changes to reporting requirements related to this measure consistent with the Administrative Procedure Act. While sector trips using this exemption will still be exempt from ASM coverage, any legal-sized allocated groundfish stocks caught during these trips must be landed and the associated landed weight (dealer or VTR) will be deducted from the sector's ACE.
The Northeast Multispecies FMP gives us authority to implement certain types of management measures for the common pool fishery, the U.S./Canada Management Area, and Special Management Programs on an annual basis, or as needed. This action implements a number of these management measures for the 2016 fishing year. These measures are not part of Framework 55, and were not specifically considered by the Council. We are implementing them in conjunction with Framework 55 measures in this final rule for expediency purposes, and because they relate to the catch limits considered in Framework 55.
The initial fishing year 2016 DAS possession limits and maximum trip limits for common pool vessels are included in Tables 18 and 19. These possession limits were developed after considering changes to the common pool sub-ACLs and sector rosters from 2015 to 2016, catch rates of each stock during 2015, and other available information. During the fishing year, we will adjust possession and trip limits, as necessary, to facilitate harvest or prevent overages, of common pool catch limits.
We have corrected an error in the per DAS limit for CC/GOM yellowtail flounder in Table 18. Table 19 in the proposed rule listed the CC/GOM yellowtail flounder limit as 75 lb (34 kg) per DAS. The limit should have been listed as 750 lb (340 kg) per DAS. After re-evaluating the common pool allocation, and in response to public comment, we are also setting the initial GOM haddock trip limit at 200 lb (91 kg) per DAS, up to 600 lb (272 kg) per trip. We have determined that this higher initial trip limit is warranted given the 175-percent increase in the 2016 GOM haddock common pool sub-ACL, and will provide increased opportunity for common pool vessels to target GOM haddock.
This action allocates zero trips for common pool vessels to target yellowtail flounder within the Closed Area II Yellowtail Flounder/Haddock Special Access Program (SAP) for fishing year 2016. Common pool vessels can still fish in this SAP in 2016 to target haddock, but must fish with a haddock separator trawl, a Ruhle trawl, or hook gear. Vessels are not allowed to fish in this SAP using flounder trawl nets. This SAP is open from August 1, 2016, through January 31, 2017.
We have the authority to determine the allocation of the total number of trips into the Closed Area II Yellowtail Flounder/Haddock SAP based on several criteria, including the GB yellowtail flounder catch limit and the amount of GB yellowtail flounder caught outside of the SAP. The Northeast Multispecies FMP specifies that no trips should be allocated to the Closed Area II Yellowtail Flounder/Haddock SAP if the available GB yellowtail flounder catch is insufficient to support at least 150 trips with a 15,000-lb (6,804-kg) trip limit (or 2,250,000 lb (1,020,600 kg)). This calculation accounts for the projected catch from the area outside the SAP. Based on the 2016 fishing year GB yellowtail flounder groundfish sub-ACL of 465,175 lb (211,000 kg), there is insufficient GB yellowtail flounder to allocate any trips to the SAP, even if the projected catch from outside the SAP area is zero. Further, given the low GB yellowtail flounder catch limit, catch rates outside of this SAP are more than adequate to fully harvest the 2016 GB yellowtail flounder allocation.
The following changes are being made using Magnuson-Stevens Act section 305(d) authority to clarify regulatory intent, correct references, inadvertent deletions, and other minor errors.
In § 648.87(b)(4)(i)(G), text is revised to clarify that NMFS will determine the adequate level of insurance that monitoring service providers must provide to cover injury, liability, and accidental death to cover at-sea monitors, and notify potential service providers.
In § 648.87(c)(2)(i)(A), the definition of the Fippennies Ledge Area is added after being inadvertently deleted in a previous action.
In § 648.87(c)(4), regulatory text is added to detail the process for amending sector operations plans during the fishing year.
We received 35 comments during the comment period on the Framework 55 proposed rule. Public comments were submitted by the Council, two state officials and one state office, five non-governmental organizations, seven sectors, six commercial fishing organizations, seven commercial fishermen, four recreational fishermen, and two individuals. We requested specific comment on whether the Council's proposed measures in Framework 55 are consistent with the Northeast Multispecies FMP, as adjusted by Amendment 16 and Framework 48, the Magnuson-Stevens Act and its National Standards, and other applicable law. Responses to the comments received are below, and, when possible, responses to similar comments on the proposed measures have been consolidated.
The 2015 assessment review panel agreed that, in the event the 2015 assessment update for any stock was not accepted, an alternative assessment approach to specify catch advice would be based on the most recent 3-year average quota or catches. The assessment model for GB cod was rejected as a basis for catch advice. However, the assessment peer review panel was concerned that the status quo catch may not be appropriate for GB cod given current stock status and resource survey trends. As a result, the peer review panel recommended using an approach that reduced recent average catch by the same proportion as the most recent survey trend. The Council's Groundfish Plan Development Team (PDT) provided the SSC with advice based on this approach and the SSC used this approach, which represents the best scientific information available, in developing its recommendation of 1,249 mt for the 2016 to 2018 fishing years.
Since the 2015 assessments, we have continued to work with Canadian managers and scientists to resolve the differences in the assumptions used in both assessments. The TRAC has been directed to provide 2017 catch advice that better balances the different assumptions used in the GB cod and eastern GB cod assessment models. We are also planning to assess the structure of the cod stocks (GB and GOM) in 2017. The results of this analysis will help determine how many stocks there are, based on the biology of the stock, and inform discussions on the assumptions used in the GB cod and eastern GB cod assessment models. All of this analysis will ultimately support future benchmark assessments for the resulting cod stocks.
The majority of other subcomponent catch from 2010-2014 was recreational landings; however, the Council has not yet considered whether a recreational allocation for GB cod may be necessary. Creation of a recreational allocation for this stock would have to be developed through the Council in a future management action.
The SSC's ABC recommendation is a limit that the Council may not exceed when developing its final ABC recommendation. However, this does not, and should not, preclude the Council from selecting an ABC that is lower than the SSC's catch advice. Although the Council could have selected a higher ABC equal to the SSC's recommendation of 500 mt, the Council recommended a slightly lower ABC (460 mt) to balance the need to provide flexibility for groundfish vessels while reducing the risk of overfishing. The Council recommended this ABC after consideration of stock growth, the probability of overfishing, and the economic impacts of the various ABC alternatives. An ABC of 460 mt complies with Magnuson-Stevens Act requirements, including achieving optimum yield and taking into account the needs of fishing communities, without compromising conservation objectives to prevent overfishing and rebuild the stock.
As noted in the proposed rule, a benchmark assessment for witch flounder is scheduled for fall of 2016. Assessment results would likely be available in time to re-specify witch flounder catch limits for the 2017 fishing year, if necessary. Thus, although a 3-year constant ABC is adopted in this action, the limits may only be in place for 1 year and will be replaced if updated information shows it is necessary.
NSC correctly noted that the preamble to the proposed rule did not correctly reference the December 2015 Council motion for the SSC to reconsider the witch flounder ABC. The preamble inadvertently included text from the Council's larger discussion leading to the final motion that discussed consideration of incidental non-target catch of witch flounder. However, the proposed rule included the correct ABC of 460 mt, and the error does not affect the rationale for the catch limit adopted in this final rule.
When developing its ABC recommendations for SNE/MA yellowtail flounder, the SSC discussed the disparate treatment of the GB cod and SNE/MA yellowtail flounder assessment. The SSC noted that, although the decisions for each assessment seem inconsistent, there are important differences between the assessments that justified these respective decisions. For example, the magnitude of the retrospective bias for SNE/MA yellowtail flounder (106 percent) was substantially less than for GB cod (240 percent). In addition, the SNE/MA yellowtail flounder assessment performed better than the GB cod assessment by other diagnostic measures. We agree that these are reasonable distinctions that support the SSC's decisions. The SSC's discussion is summarized in more detail in the SSC's November 17, 2017, memorandum to the Council on 2016-2018 groundfish ABCs, included in Appendix I to the Framework 55 EA.
Although the SNE/MA yellowtail flounder assessment update was not rejected, as supported by the commenters, the SSC acknowledged the poor condition of the stock, substantial uncertainty in the assessment, and procedural issues with the assessment terms of reference in recommending a 3-year ABC of 267 mt. This ABC is based on a combination of the assessment catch projections and an estimate of 2015 catch, which appropriately balances the new understanding of this stock's status and uncertainty in the assessment, while allowing as much flexibility as practicable for groundfish and scallop vessels.
Because SNE/MA yellowtail flounder is now overfished, a rebuilding program must be developed for the stock. We will work with the Council to develop an appropriate rebuilding program, particularly in light of some of the difficulties that the assessment results presented in developing 2016-2018 catch advice.
The assessment review panel expressed concern that the recent biomass estimates substantially decreased despite relatively low catch, and noted that reasons for this apparent decline are unknown. In spite of the uncertainties in the assessment, it was approved as a basis for catch advice. Because catch advice fluctuates with area-swept assessments, the assessment review panel recommended stabilizing catch advice by averaging the area-swept fall and spring survey. This results in an ABC of 745 mt. The PDT provided the SSC with this option, but the SSC ultimately chose an ABC consistent with 75% F
NMFS disagrees that a commercial moratorium is necessary to limit catch of GOM winter flounder. While this is a relatively large ABC increase compared to 2015, recent catches have been well below the overfishing threshold. In addition, available catch information suggests that a majority of GOM winter flounder catch comes from the same statistical areas as the majority of GOM cod catch. We expect that the low catch limit for GOM cod will continue to limit catch of GOM winter flounder.
The 2015 assessment updates replicated the methods recommended in the most recent benchmark decisions, as modified by any subsequent operational assessments or updates, with the intention of simply adding years of data. Only minor flexibility in the assessment assumptions was allowed to address emerging issues. Thus, the commenters' suggestions for alternative data sources or assessment models would not have been appropriate for the 2015 assessment updates.
The NEFSC has made significant efforts over the past few years to
Based on these changes, this rule also announces our determination that the target ASM coverage level is 14 percent (ASM + NEFOP observer coverage) for the 2016 fishing year. This level of coverage provides a reliable estimate of overall catch by sectors to monitor annual catch levels in the most cost-effective means practicable. This interpretation is justified in light of the requirement for conservation and management measures to be consistent with all National Standards, specifically, National Standards 2, 5, 7, and 8, which speak, respectively, to the need to use the best scientific information available; efficiency in the use of fishery resources; the need to minimize costs and avoid unnecessary duplication, where practicable; and the need to take into account impacts on fishing communities and minimize adverse economic impacts, to the extent practicable. We have conducted analyses, and considered both precision and accuracy issues in determining the appropriate level of coverage that provides a reliable estimate of overall catch while reducing the cost burden to sectors and NMFS. A more detailed summary of the supporting analyses, and an explanation and justification supporting our determination that an at-sea coverage level of 14 percent (10 percent ASM + 4 percent NEFOP) is sufficient is contained in the EA.
These extra-large mesh gillnet sector trips will be excluded from the trips considered in setting and monitoring ASM coverage levels. However, we are not yet able to determine how removing the ASM coverage requirement from certain trips will impact the overall variability of the remaining population of sector trips, or how it will affect the coverage necessary to meet the 30-percent CV requirement in future years. The economic impact section of the EA (Section 7.4) discusses this uncertainty, and notes that, if ASM coverage were to be shifted onto other components of the fleet, there would be no overall cost savings to sectors. Nonetheless, we are approving this measure because it prioritizes limited resources and monitoring coverage for trips that actually catch groundfish.
The commenter cites an inaccurate portrayal of the intent of the measures contained in the text of the draft version of the EA. The text states that we will likely miss the 30-percent CV standard, but these measures were always intended to meet the 30-percent CV standard and the monitoring goals and objectives of the FMP. We released an advance draft of the EA to support the publication of the proposed rule prior to completing our full review process. We are not required to finalize the EA at the proposed rule stage, but have routinely published draft EAs in the past to allow the public time to consider and comment on the full range of potential impacts of actions under consideration in our region. We have clarified our intent for these measures in our development the final EA. Our proposed rule and this final rule provide the analysis for our conclusion that we expect the method used to set the target ASM coverage level, and the 14-percent 2016 target coverage level, to meet the 30-percent CV precision standard specified in the Northeast Multispecies FMP. We have not changed our requirement to ensure that the target coverage level will achieve the required CV standard. If the target coverage level resulting from this method was too low to ensure we would achieve the 30-percent CV standard, we would set a different target coverage level to achieve that standard.
Framework 48's goals and objectives for the ASM program include performing periodic reviews of the monitoring program's effectiveness. Framework 55 does not change this goal, and we agree with the commenters that review should include evaluating the groundfish monitoring program beyond this action, including whether the 30-percent CV standard is the most appropriate way to set ASM coverage levels. NMFS, and now industry, are both devoting considerable financial resources to achieving this precision standard, and it is important to fully consider whether this expenditure is appropriate to meet the groundfish monitoring goals and objectives. Further evaluation is also warranted in light of the 2015 assessment results, potential changes in the fishery since 2010, and now that the sector program has been operational for over 5 years. As noted in previous responses to comments, this evaluation must occur through the Council, and is already underway.
We agree with the commenters that an evaluation of the ASM program must include a review of its performance for providing data for stock assessments and reducing management and/or biological uncertainty, along with all of the other goals and objectives identified by Framework 48. The CV standard, however, only sets the level of precision that will be achieved through catch sampling. A precision standard for at-sea monitoring by itself cannot account for the entirety of scientific and management uncertainty. For example, we recognize that overfishing is still occurring for many groundfish stocks despite the fact that we have met the CV standard, and ACL overages have not occurred. A 2013 NMFS publication (Methot, R. 2013) discusses this possibility, and explains “that scientific and management uncertainty mean that simply setting targets below limits does not necessarily prevent the stock from experiencing overfishing” (p. 63). The overfishing status of a stock can be based on an estimate of fishing mortality compared to the threshold, or catch being greater than OFL. However, because the fishing mortality threshold and the OFL are based on estimates, they cannot perfectly reflect what is happening to the fish stock. Further, overfishing can be caused by a number of factors, including a lack of effective management controls and scientific uncertainty in fishing mortality estimates or environmental factors. As is the case with many groundfish stocks, new scientific information and updated assessments have changed the perception of stock status from when catch limits were specified.
As the commenters point out, achieving a certain level of precision
EDF and Oceana noted that the changes included in Framework 55 violate our obligation under the Magnuson-Stevens Act to “assess and specify the present . . . condition of the fishery” and “assess the amount and type of bycatch” occurring in the fishery. However this requirement is satisfied by the Greater Atlantic Region SBRM, not the ASM program. The sector ASM program is a separate program with distinct goals. Providing additional data for stock assessments is one of the goals of groundfish monitoring programs and is considered when evaluating the ASM program and setting the target coverage level. This statement is not meant to diminish the information benefits the ASM program provides for stock assessments, but is meant to clarify that the changes to the ASM program in Framework 55 are not in violation of our SBRM requirements under the Magnuson-Stevens Act.
Last, we do not use the CV standard alone to reliably estimate catch. There are many reporting requirements that vessels adhere to, and there are strong incentives for vessels to report accurately. Enforcing reporting requirements is currently a high priority for the Northeast Division of the NOAA Office of Law Enforcement, and the threat of a civil or criminal enforcement action creates a strong incentive for compliance. There is also a strong incentive for sectors to promote internal compliance, because a sector and the fishing businesses in a sector can be held jointly and severally liable for overages and misreporting of catch, including both landings and discards. The percent of overall catch composed of discards has a larger impact on monitoring ACLs than the 30-percent CV standard. Landings remain the largest portion of catch for allocated stocks and are reported by dealers, vessels, and sectors.
Despite uncertainty that exists in assessments and the degree of imprecision in monitoring inherent in the 30-percent CV standard, we will continue to use the information in the assessments to adjust catch limits and management measures to prevent overfishing. National Standard Guidelines recognize that scientific and management uncertainty exists and requires consideration of, and accounting for, such uncertainty when setting catch limits.
To that end, significant additional uncertainty buffers are established in the setting of ACLs that help make up for any lack of absolute precision and accuracy in estimating overall catch by sector vessels. Although the commenters focus on uncertainties in assessments that merit consideration when evaluating the information provided by the ASM program in future actions, the commenters provide no concrete evidence of a link between Framework 55's coverage target adjustments to our ability to adequately monitor sector catch and provide information sufficient for assessments. We conclude that sector monitoring requirements overall, including the adjustments to the method used to set the ASM coverage level, are sufficient to monitor sector ACE and prevent overfishing.
EDF cites our analysis of at-sea monitoring requirements for the Northeast multispecies sector fishery, but draws the unsupported conclusion that discarding increases on unobserved trips. An analysis contained in that report examined if there were indications of an observer effect on groundfish trips that could result in either systematic or localized biases, which would suggest that observer data used to generate discard estimates may not be representative. This study evaluated whether differences in performance occur when a vessel carried an observer and when it did not. The study found evidence for some differences in fishing behavior between observed and unobserved groundfish trips; however, the analysis could not conclude whether the apparent differences would necessarily result in discard rates on unobserved trips that are different (higher or lower) than on observed trips. If the discard rate is unchanged, then the apparent differences would not affect total discard estimates.
Oceana cited another NFMS analysis, included in the same ASM summary report, which found that even if there is some bias that increases unreported discards, the discard rate for the groundfish sector trips studied would need to be five to ten times higher on unobserved trips to appreciably increase the risk for total catch to exceed the ABC or OFL. None of the analyses conducted to date suggest behavioral differences on observed versus unobserved trips of this magnitude. Neither commenter provides evidence of the magnitude of potential discarding. The analysis concluded that, given that landings are below the total sector ACLs, setting a monitoring coverage level that meets the 30-percent CV requirement at the stock level provides a reasonable level of certainty that observer bias would have to be much larger than plausible before the risk of exceeding the OFL would exceed
None of the commenters provided information showing that a reduction in the target coverage level will coincide with or cause increased bias involving increased discards on unobserved trips, or the magnitude of any such increased discards. EDF commented that there is an economic incentive for a vessel to fish differently when an observer is on board. There may be economic incentives to discard stocks with low catch limits to avoid reaching those limits. It is unclear, however, whether and how this incentive changes as target monitoring levels increase or decrease, or when a vessel is required to pay for an at-sea monitor's services and warrants further review when evaluating the ASM program. For example, at the June 2015 Council meeting during the development of Framework 55, EDF commented that observer bias was due to NMFS subsidizing ASM costs for industry since 2010. Because sectors have not had to pay for ASM, EDF noted the incentive for bias exists to catch less on observed trips. This argument posits that the bias incentive occurs when fishermen do not pay for ASM services, presumably because they can better afford a trip that avoids discarding and results in less catch. Based on this argument, one may equally infer that, when industry pays for ASM, their economic incentive to fish differently on monitored trips may change. In the absence of any studies or analysis to support these conclusions, or that show the magnitude of any such incentives and changed behavior, we have no reasonable basis for setting different coverage target rates or using a different method than provided for in this action. We have determined that changes to the method used to set the target ASM coverage level, and the resulting 14-percent coverage level set for fishing year 2016, are expected to reach a 30-percent CV, and will provide accurate and precise enough discard estimates to monitor sector ACEs and ACLs.
Finally, EDF and TNC argue that the low GOM cod catch and ACE lease price in the 2015 fishing year is evidence that vessels are illegally discarding GOM cod on unobserved trips. This allegation is based on many assumptions about the abundance, distribution, and catchability of GOM cod, and the ability of vessels to avoid GOM cod. EDF and TNC ignore the simplest logical deduction, that if the stock assessment has accurately characterized the abundance of GOM cod as truly low and the population as highly concentrated, and that vessels are successfully avoiding GOM cod, then we would expect to see a decline in catch and resultant decrease in ACE leasing price.
Amendment 16 specified that ASM coverage levels should be less than 100 percent, which requires estimating the discard portion of catch, and thus total catch. While it is required that the overall ASM coverage level must meet at least a 30-percent CV precision standard, that level of coverage also must minimize effects of potential monitoring bias to the extent practicable while maintaining as much flexibility as possible to enhance fleet viability. In order to assure perfect accuracy (
Ultimately, the target ASM coverage level should meet the 30-percent CV standard and provide confidence that the overall catch estimate is accurate enough to ensure that sector fishing activities are consistent with National Standard 1 requirements to prevent overfishing while achieving on a continuing basis optimum yield from each fishery. We have determined that applying the method we approve in this action to set the 2016 target coverage level of 14 percent will meet this goal. Our determination incorporates all of our sector monitoring and reporting requirements, including obligations on sectors to self-monitor and self-report, which is linked to Agency monitoring. For the most part, the commenters have generally asserted that this system and level of monitoring is not adequate without providing any specific justification or information to support their assertion. As noted in other responses, this action does not specify a fixed ASM coverage target for all future years, and only refines the process we use for predicting the level of ASM coverage necessary in a given year to achieve the 30-percent CV requirement. In comparison to previous years, the refinements made in this action could lead to lower, or higher, ASM coverage target rates in future years.
We agree that it would be beneficial to complete additional analysis of the potential sources of bias. However, it is difficult to quantify bias, or make definitive conclusions on these types of analyses, because data must be used to infer activity that may not be observed or documented. Available analyses suggest that bias is not likely to undermine our ability to monitor ACLs. We support the continued improvement of available analyses, especially in light of the recent declines in groundfish catch limits, and expect that as additional data become available, these types of analyses will improve.
Both the PDT and the Council have periodically discussed the possibility of increasing the buffers due to evidence that fishing behavior may differ on observed and unobserved trips, possibly resulting in an underestimate of discards. However, to date, there is no scientific basis for determining either the direction or magnitude of bias sufficient for the PDT to estimate the amount of suspected bias on unobserved trips. As a result the PDT has been unable to determine whether any adjustments to the existing buffers would be warranted to address potential bias. The PDT concluded that no new information is available at this time that would warrant any changes to the buffers previously adopted in Framework 50, and recommended no changes to the management uncertainty.
The commenters provide no quantitative evidence of a specific amount of unobserved discarding, and do not suggest a method to quantify bias in order to adjust the management uncertainty buffer. As stated above, we agree that it would be beneficial to complete additional analysis of the potential sources, magnitude, and direction of bias. However, it is difficult to quantify bias, or make definitive conclusions on these types of analyses, since data must be used to infer activity that may not be observed or documented. Thus, at this time, we are not able to reasonably determine an appropriate adjustment to the management uncertainty buffer than is already used. Using the best scientific information available is neither arbitrary, nor capricious, but is consistent with the National Standards.
The analysis in the EA assumes ASM costs are $710 per seaday, based on the cost that NMFS was able to negotiate with service providers. As EDF points out, sectors were successfully able to negotiate lower seaday costs for ASM. However, the fact that sectors were able to negotiate lower costs does not diminish the significant economic impact of the industry-funded ASM program on individual fishery participants and sectors. Our economic analyses predict economic impacts for average vessels in different size classes, or the fishery as a whole, but could mask very real economic impacts at the vessel or community scale.
We disagree with the comment that the EA fails to consider the costs of lower monitoring in the form of overfishing. Section 7.4 of the EA
The Northeast Multispecies FMP already allows sectors to use electronic monitoring in place of at-sea monitors if the technology is deemed sufficient for a specific trip, based on gear type and area fished, if approved by NMFS. We had been working with TNC, GMRI, EcoTrust Canada, and several sectors for the last year, to implement a program that would have used electronic monitoring to monitor the fishery. We have approved an exempted fishing permit to allow a number of sector vessels to participate in an experiment using electronic monitoring in lieu of ASM to further develop a program based on electronic monitoring for sectors. NMFS will continue to support development of electronic monitoring as a potential tool where it is fitting and appropriate.
Dr. Sun recently published a peer-reviewed article (Sun and Fine, 2016) that included additional adjustments to the approach, in which coverage is further weighted to account for stocks with high utilization. This article was published on December 29, 2015, after the Council developed and took final action on Framework 55. The Groundfish PDT received a presentation on the revised analysis at its March 30, 2016, meeting, and intends to review this approach, along with other monitoring approaches, as part of the development of the forthcoming groundfish monitoring amendment. The Council can choose to further develop this approach if it meets the Council's goals and objectives for groundfish monitoring programs. We reiterate that adopting this approach to groundfish monitoring would require a Council amendment, because it would change the objectives and standards for the groundfish monitoring program established in Amendment 16 and Framework 48.
As stated elsewhere in this rule, this action does not specify a fixed ASM coverage target for all future years, and is not approving a lower target ASM coverage level in perpetuity. Rather, this action refines the process we use for predicting the level of ASM coverage necessary in a given year to achieve the 30-percent CV required. In comparison to previous years, the refinements made in this action could lead to lower, or higher, ASM coverage target rates in future years. Thus, while the Council and our analysis considers the impacts of a reduced ASM coverage level for 2016, we do not necessarily expect that the lower coverage level will persist for future fishing years.
In addition, the goals of Amendment 16 and Frameworks 48 and 55, are consistent with our requirement to take into account the National Standard, and in particular National Standards 1, 2, 5, 7, 8, and 9 in making our determination of the appropriate level of ASM coverage for sectors on an annual basis. These National Standards specifically speak to preventing overfishing; using the best scientific information available; efficient use of fishery resources; minimizing costs, and avoiding duplications where practicable; taking into account impacts on fishing communities; minimizing adverse economic impacts to the extent practicable; and minimizing bycatch and bycatch mortality to the extent practicable.
We agree that the EA characterizes the impacts of lower ASM coverage levels as negative compared to higher ASM coverage levels. The EA notes that positive impacts of higher ASM coverage levels could include better information for stock assessments and reduced uncertainty around discard estimates. However, any quantification of the magnitude of these types of benefits is speculative, and can only be discussed as marginal because it is not yet possible to quantify the biological outcomes relative to the information gained with each additional percentage of monitoring coverage. A similar concept is highlighted in the economic analysis in section 7.4 of the Framework 55 EA, in terms of the overall benefit of added precision in discard estimates. The EA notes that the marginal value of added precision from each percent increase in ASM coverage is unknown. Hence, the EA describes any impact potential as low.
We have generally characterized the benefits of higher monitoring coverage levels as positive compared to lower monitoring coverage levels in other actions in this region (
First, this action adjusts the method used to set target ASM coverage levels. The adjustments to the method used to set target ASM coverage levels do not, by themselves, automatically allow for higher ASM coverage in future fishing years. While increases in target ASM coverage levels may be expected to improve data quality, realization of an increase in the target coverage level compared to past fishing years depends on the coverage levels generated by the changes approved in this action. As noted elsewhere in this section, in comparison to previous years, the changes in this action could lead to lower or higher ASM coverage target rates in future years. Thus, while the Council's and our analysis considers the impacts of a reduced ASM coverage level for 2016, we do not necessarily expect that the lower coverage level will persist for future fishing years.
Second, in addition to the uncertainty of what target coverage rates will be set in future years, the potential effects of increased data deriving from a method setting target coverage rates are too remote and speculative to be quantitatively evaluated in the EA because there is no way to predict the effect that an improvement in data quality would have for managing the groundfish fishery. Improvements in data quality would give assessment scientists and fishery managers more confidence in the data. However, there is no way to predict the type of new information that would arise from future catch estimations (
Thus, while acknowledging that it is not possible to quantify the biological benefit for higher coverage, the EA makes conclusions concerning environmental impacts from lower or higher coverage based on the idea that more information from monitoring tends to reduce uncertainty in setting catch limits and assessments. However, by this principle alone, and without consideration of other factors, one would be required to conclude that coverage rates should never be reduced, and should always be increased if possible. To underscore the imprudence of following this logic, in similar fashion one could conclude that fishing should always be reduced because less fishing mortality generally benefits fish stocks. The National Standards, Amendment 16, and Frameworks 48 and 55 require consideration of other factors, however. Specifically, we must consider the efficient use of resources for monitoring catch limits and preventing overfishing. In this instance, we have considered the target coverage rate required to monitor catch rates in the most efficient manner practicable. While one may conclude that a generally higher coverage rate may provide more catch information that would potentially reduce uncertainty, any potential benefit to fish stocks in the future from more information is more attenuated than the sufficiency of the information for the immediate task of monitoring of catch limits and the cost benefits that come from the efficient use of monitoring resources to achieve that purpose. We are required by law to consider these other factors when determining a rate of coverage that meets conservation requirements.
During the development of Framework 55, using coverage information that was unavailable when the administrative standard was first adopted, the PDT reevaluated this administrative standard, and determined that it was not necessary to accomplish the goals of the ASM program. As noted in the proposed rule, this standard is not necessary to satisfy the CV requirement of the ASM program to accurately monitor sector catches, or meet the other monitoring program goals, and it was not required by the Northeast Multispecies FMP. Further, imposing a standard that results in coverage higher than necessary to meet the program goals would not be consistent with National Standards 5, 7, and 8, which relate to efficiency in the use of fishery resources; minimizing costs and avoiding duplications where practicable; efficiency in the use of fishery resources; and taking into account impacts on fishing communities and minimizing adverse economic impacts to the extent practicable. Removing this administrative standard makes the method used to set the target ASM coverage level more efficient, while still addressing groundfish monitoring program objectives.
Section 7.1 of the Framework 55 EA compares the performance of basing the target coverage level on 1 year of data to 2- and 3-year averages to evaluate their ability to predict the coverage level necessary to achieve a 30-percent CV in 2014. To predict the target coverage level using 1 year of data, the 2012 target coverage level was used to predict the coverage necessary to achieve a 30-percent CV for 2014. For the 2-year average, data for 2011-2012 was used. For the 3-year average, data from 2010-2013 was used. Overall, the 3-year average performed relatively well compared to using a single year, or 2-year average. The EA acknowledges that, because the ASM program only started in 2010, there are a limited number of years of data available to make this comparison, and that more years of data and analysis are necessary to make the final conclusion regarding the most appropriate approach. Therefore, using multiple years of data may reveal true trends while minimizing non-significant fluctuations, which provides for additional stability for industry consistent with National Standards 5 and 8.
In addition, averages are routinely used in fisheries management to smooth interannual variability. In the Greater Atlantic Region, the recreational fisheries for GOM cod, GOM haddock, summer flounder, scup, and black sea bass base the determination of whether catch has exceeded the recreational sub-ACL by comparing the 3-year moving average of recreational catch to the 3-year moving average of the recreational sub-ACL. For overfished skate species, the 3-year average of the appropriate weight per tow from the trawl survey index is used as a proxy for stock biomass, and is a trigger to indicate whether the additional management measures are necessary to promote stock rebuilding. We have determined that using three years of data will minimize unnecessary fluctuations in the target ASM coverage level while meeting our need to reliably estimate discards.
We agree that ASM has provided a wealth of information about protected species interactions in commercial fishing gear, particularly in the extra-large mesh gillnet fisheries. The full discussion of the protected species impacts of this alternative is provided in the EA in Section 7.3.3.1.4, and is not repeated in full here. In terms of data collection, the EA notes that removing the ASM coverage requirement for these trips may reduce the amount of information available on protected species interactions in extra-large mesh gillnet gear. From 2010-2014, the number of hauls observed through the ASM program in the extra-large mesh fishery exceeded the number of hauls observed by traditional NEFOP observers, constituting 60 percent of all observed extra-large mesh hauls. Moreover, ASM documented 63 percent of all protected species interactions in the extra-large mesh fisheries. Data collected on protected species interactions through ASM has also reduced uncertainty in bycatch estimates for almost all gear types used in the groundfish fishery. The EA characterizes this potential reduction in information benefits on protected resources interactions in extra-large mesh gear as an indirect, low negative impact on protected resources.
In spite of the information collection benefits the ASM program has provided
The filtering alternative is designed to be conservative. It does not exempt stocks from coverage necessary to meet the 30-percent CV requirement. Rather, it removes healthy stocks with low utilization and low discards as predictors for the target ASM coverage level. In addition, target ASM coverage levels are evaluated and updated on an annual basis in order to incorporate the most recent available data. This means that, if new stock status or catch information indicates that a stock no longer meets all of the criteria, then the stock must be used as a predictor for target ASM coverage levels for the upcoming fishing year. For example, if, in setting the coverage level for 2017, 2015 redfish catch data indicated that over 75 percent of the groundfish sub-ACL was caught, or more than 10 percent of 2015 catch were comprised of discards, the stock would not be removed a predictor for the 2017 ASM target coverage level. Further, we are required to set target coverage at a level that is sufficient to achieve the 30-percent CV standard and other groundfish monitoring program objectives.
We also disagree that these changes are inconsistent with the goals and objectives of the Northeast Multispecies FMP. As noted in the proposed rule and this final rule, Framework 55 does not change the 30-percent CV requirement or the monitoring program goals and objectives, and only adjusts the method used to set target coverage levels to meet this requirement. The Council deemed the regulations necessary to accomplish these adjustments as consistent with their intent in Framework 55. Thus, we have determined that these changes are lawful under the combination of allowable framework provisions of the Northeast Multispecies FMP and section 305(d) of the Magnuson-Stevens Act which authorizes NMFS to implement regulations necessary to ensure that Council measures are carried out in a manner consistent with the Act.
We also disagree that the EA fails to consider the cumulative environmental impacts of Framework 55. Section 7.6 of the EA explicitly provides a discussion of the expected cumulative impacts associated with this action. We have determined that this treatment of the cumulative impacts is consistent with CEQ regulations and current NOAA policy.
The overall sector monitoring program is not changed by the measures in Framework 55. Specifically, the requirement to set the target ASM coverage levels to achieve a 30-percent CV on discard estimates for groundfish stocks is not changed. We have determined that the modifications to the method used to determine the target ASM coverage level are reasonable and should result in target coverage levels that will meet the 30-percent CV requirement. While we have determined that a 2016 target ASM coverage level of 14 percent can be expected to meet the 30-percent CV target, we note again that this coverage level is not set in perpetuity. This means that, in future fishing years, higher or lower coverage levels could result from the method approved in this action, and we are still required to set target coverage levels at a rate that are expected to achieve the 30-percent CV standard. In addition, this action does not approve any other notable changes to the total sector monitoring program (
Finally, EDF claims that the Agency may have pre-judged the outcome of the EA in order to ensure that Framework 55 measures would be published in time for May 1. They note that 1 month before Framework 55 was formally submitted, NMFS argued in a preliminary injunction hearing in the U.S. District Court for the District of New Hampshire that harm to the plaintiff was not significant because of the likelihood that NMFS would approve Framework 55 measures and reduce monitoring levels.
We agree that there is a Magnuson-Stevens Act requirement to initiate an evaluation of proposed regulations for implementing or modifying FMPs or amendments, to determine whether they are consistent with the FMP and applicable law within 15 days, and to publish such regulations for a public comment period of 15 to 60 days. We published the proposed rule within the bounds of the comment period provided for in that provision and the final rule is expected to be published well in advance of the outside time limit specified in the same provision. We believe the publication timeline has provided a meaningful opportunity for full and fair public comment and participation.
Each year since 2013, we have published the target coverage level that we expect is sufficient to achieve the Northeast Multispecies FMP's monitoring goals. This target rate was determined using internal administrative standards we developed to ensure coverage was at a rate based on past experience where we could reasonably expect to achieve these goals. Prior to the Council's adoption of the measures in Framework 55 or approval of this final rule, we developed two of the adjustments to our administration of the ASM program that were also proposed as part of Framework 55. We would have been required to apply these administrative adjustments in the absence of Framework 55 measures as part of default changes had Framework 55 not been published in time for the beginning of the fishing year. Specifically, we planned to stop using our internal standard of monitoring 80 percent of discarded pounds at a 30-percent CV. We also planned to use multiple years of information to set the target ASM coverage level. Because these were changes to our internal mechanisms for administering the ASM program, they were outside of the Council process and did not require public comment. As we were considering these changes and expecting to implement them in time for the new fishing year, we worked with the Council to evaluate these changes in the context of a framework adjustment for the purpose of transparency, and to allow the public the maximum opportunity to participate in the development and evaluation of these changes. The measures in Framework 55 were always subject to our approval or disapproval under the Magnuson-Stevens Act. Our intent to make a sub-set of administrative adjustments did not pre-determine what impacts may occur and the assessment of those potential impacts of all of the Framework 55 measures. It also did not foreclose the Council's consideration of other alternatives included in Framework 55, their impacts, and an assessment of how they all interacted. Last, we expressed our concern that these adjustments complied with the Magnuson-Stevens Act, its National Standards, and the groundfish FMP's goals and objectives. For example, in our proposed rule we specifically requested comments on whether the Council's proposed revisions to the groundfish ASM program met the requirements of the Magnuson-Stevens Act, its National Standards, and the groundfish FMP to engage the public in our evaluation of the proposed measures.
We agree that our limited monitoring resources should be focused on sector trips with groundfish catch. This action approves a measure to exempt extra-large mesh gillnet trips in SNE and Inshore GB Broad Stock Areas from ASM coverage requirement, as well as a sector exemption to allow these same vessel to target dogfish in existing dogfish exemption areas. These trips have low groundfish catch, and primarily target non-groundfish species such as dogfish and skate. As noted above, these trips will still be subject to NMFS-funded NEFOP coverage requirements, and all groundfish catch on these trips will still be deducted from a sector's ACE. We will evaluate these trips on an annual basis to ensure that groundfish catch is still minimal enough to continue exempting these trips for ASM coverage requirements.
Sectors may still carry over up to 10 percent of their unused allocation as long as this amount, plus the total ACL for the upcoming fishing year, does not exceed the ABC. If the full 10-percent carryover possible would exceed the ABC, the Northeast Multispecies FMP requires that we reduce the available carryover for each sector. This provision limits the amount of carry-over to ensure that the ABC is not exceeded for a stock. For 2016, total potential catch would exceed the 2016 ABC for all groundfish stocks, except for GOM and GB haddock, if sectors carried over the maximum 10-percent of unused allocation allowed. As a result, we expect we will need to adjust the maximum amount of unused allocation that a sector can carry forward from 2015 to 2016 (down from 10 percent). The final adjustment will depend on each sector's final 2015 catch. As noted in the preamble, we will make adjustments as soon after May 1 as possible.
After re-evaluating the common pool allocation, and in response to public comment, we are also setting the initial GOM haddock trip limit at 200 lb (91 kg) per DAS, up to 600 lb (272 kg) per trip. This increase is warranted given the increase to the 2016 GOM haddock common pool sub-ACL compared to 2015, as described further in section “9. 2016 Fishing Year Annual Measures Under Regional Administrator Authority.” We will monitor common pool catch in-season, and if necessary or warranted, will make adjustments to the common pool trip limits implemented in this rule.
This final rule contains a number of minor adjustments from the proposed rule. We clarify a discrepancy in the status determination criteria for GB cod and Atlantic halibut. This rule corrects errors in the CC/GOM yellowtail flounder common pool trip limit and the 2016 sector carry-over table, adds inadvertently omitted default specifications for GB yellowtail flounder, and correct the GB cod groundfish catch limits for 2017 and 2018. We are also implementing a higher initial 2016 GOM haddock common pool trip limit than announced in the proposed rule.
Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that the management measures implemented in this final rule are necessary for the conservation and management of the Northeast groundfish fishery and consistent with the Magnuson-Stevens Act, and other applicable law.
This final rule has been determined to be not significant for purposes of Executive Order (E.O.) 12866.
This final rule does not contain policies with Federalism or “takings” implications as those terms are defined in E.O. 13132 and E.O. 12630, respectively.
The Assistant Administrator for Fisheries finds good cause, under 5 U.S.C. 553(d)(3), to waive the 30-day delayed effectiveness of this action. This action sets 2016 catch limits for all groundfish stocks, and adopts several other measures to improve the management of the groundfish fishery. This final rule must be in effect at the beginning of the 2016 fishing year to fully capture the conservation and economic benefits of Framework 55 and sector administrative measures.
This rulemaking incorporates information from updated stock assessments for all 20 groundfish stocks. The development of Framework 55 was timed to incorporate the results of the 2015 groundfish stock assessments, which were finalized in October 2015. As a result, this rulemaking could not be completed further before this date. Therefore, in order to have this action effective at the beginning of the 2016 fishing year, which begins on May 1, 2016, it is necessary to waive the 30-day delayed effectiveness of this rule.
If this action is delayed, the coverage level for the industry-funded ASM program would be 17 percent beginning on May 1, 2016, based on default measures for 2016 published in a separate rulemaking. When combined with the default groundfish specifications (set at 35 percent of the 2015 allocations), a delay in the implementation of these measures would result in direct economic loss for the groundfish fleet due to the high costs of ASM and the low default groundfish specifications, which may restrict fishing effort or temporarily alter business plans. In addition, this action approves two new sectors for operation on May 1, 2016. These sectors would be unable to operate and their vessels would be unable to fish until this action is finalized, which would result in direct economic loss for these vessels.
The groundfish fishery already faced substantial catch limit reductions for many key groundfish stocks over the past 5 years, and this rule implements additional catch limit reductions. However, the negative economic impacts of implementing the default catch limits on May 1 would exceed any negative economic impacts anticipated from this action. Any further disruption to the fishery that would result from a delay in this final rule could worsen the severe economic impacts to the groundfish fishery. While this action includes several catch limit decreases for several stocks in poor condition, it also includes catch limits increases for a number of healthy groundfish stocks. These increases in catch limits for healthy groundfish stocks may help mitigate the economic impacts of the reductions in catch limits for other key groundfish stocks.
The allocation changes for GOM haddock and GOM cod in this action would allow for increases in the recreational possession limits for both stocks through a separate, concurrent rulemaking. A delay in this action would delay setting recreational measures for the 2016 fishing year and the economic benefits that these measures would provide. Additionally, recreational fishermen book fishing trips months in advance for the upcoming fishing year. Thus, delays in finalizing recreational measures result in additional negative impacts on the recreational fishing industry due to uncertainty and the inability to book trips.
Overall, a delay in implementation of this action would greatly diminish any benefits of these specifications and other approved measures. For these reasons, a 30-day delay in the effectiveness of this rule is impracticable and contrary to the public interest.
Section 604 of the RFA, 5 U.S.C. 604, requires Federal agencies to prepare a Final Regulatory Flexibility Analysis (FRFA) for each final rule. The FRFA describes the economic impact of this action on small entities. The FRFA includes a summary of significant issues raised by public comments, the analyses contained in Framework 55 and its accompanying Environmental Assessment/Regulatory Impact Review/Initial Regulatory Flexibility Analysis (IRFA), the IRFA summary in the proposed rule, as well as the summary provided below. A statement of the necessity for and for the objectives of this action are contained in Framework 55 and in the preamble to this final rule, and is not repeated here.
Our responses to all of the comments received on the proposed rule, including those that raised significant issues with the proposed action, or commented on the economic analyses summarized in the IRFA, can be found in the Comments and Responses section of this rule. As outlined in that section, significant issues were raised by the public with respect to the GB cod catch limits for 2016-2018 and the combined suite of groundfish ASM program adjustment. Comment 5 discussed that the GB cod catch limit, as well as catch limits for other key groundfish stocks, are expected to constrain the commercial groundfish fishery. Comment 26 discusses compares economic impacts of the No Action ASM alternative to the combined suite of ASM program adjustments, and the economic analysis in the IRFA. Comments 27 and 28 discuss alternatives to the proposed changes to the ASM program that were not considered in this action, namely electronic monitoring and an alternative approach for allocating ASM coverage. Detailed responses are provided to each of these specific comments and are not repeated here. There were no other comments directly related to the IRFA; the Chief Counsel for the Office of Advocacy of the Small Business Administration (SBA) did not file any comments. No changes to the proposed rule measures were necessary as a result of these public comments.
The SBA defines a small business as one that is:
• Independently owned and operated;
• Not dominant in its field of operation;
• Has annual receipts that do not exceed—
○ $20.5 million in the case of commercial finfish harvesting entities (NAIC
○ $5.5 million in the case of commercial shellfish harvesting entities (NAIC 114112)
○ $7.5 million in the case of for-hire fishing entities (NAIC 114119); or
• Has fewer than—
○ 750 employees in the case of fish processors; or
○ 100 employees in the case of fish dealers.
This final rule impacts commercial and recreational fish harvesting entities engaged in the groundfish fishery, the small-mesh multispecies and squid fisheries, the midwater trawl herring fishery, and the scallop fishery. Individually-permitted vessels may hold permits for several fisheries, harvesting species of fish that are regulated by several different FMPs, even beyond those impacted by this action. Furthermore, multiple-permitted vessels and/or permits may be owned by entities affiliated by stock ownership, common management, identity of interest, contractual relationships, or economic dependency. For the purposes of the Regulatory Flexibility Act analysis, the ownership entities, not the individual vessels, are considered to be the regulated entities.
Ownership entities are defined as those entities with common ownership personnel as listed on the permit application. Only permits with identical ownership personnel are categorized as an ownership entity. For example, if five permits have the same seven persons listed as co-owners on their permit application, those seven persons would form one ownership entity that holds those five permits. If two of those seven owners also co-own additional vessels, these two persons would be considered a separate ownership entity.
On June 1 of each year, NMFS identifies ownership entities based on a list of all permits for the most recent complete calendar year. The current ownership dataset used for this analysis was created on June 1, 2015, based on calendar year 2014 and contains average gross sales associated with those permits for calendar years 2012 through 2014.
In addition to classifying a business (ownership entity) as small or large, a business can also be classified by its primary source of revenue. A business is defined as being primarily engaged in fishing for finfish if it obtains greater than 50 percent of its gross sales from sales of finfish. Similarly, a business is defined as being primarily engaged in fishing for shellfish if it obtains greater than 50 percent of its gross sales from sales of shellfish.
A description of the specific permits that are likely to be impacted by this action is provided below, along with a discussion of the impacted businesses, which can include multiple vessels and/or permit types.
Table 20 describes the total number of commercial business entities potentially regulated by this action. As of June 1, 2015, there were 1,359 commercial business entities potentially regulated by this action. These entities participate in, or are permitted for, the groundfish, small-mesh multispecies, squid, herring midwater trawl, and scallop fisheries. For the groundfish fishery, this action directly regulates potentially affected entities through catch limits and other management measures designed to achieve the goals and objectives of the Northeast Multispecies FMP. For the non-groundfish fisheries, this action includes allocations for groundfish stocks caught as bycatch in these fisheries. For each of these fisheries, there are accountability measures that are triggered if their respective allocations are exceeded. As a result, the likelihood of triggering an accountability measure is a function of changes to the ACLs each year.
This action will directly impact entities engaged in the limited access groundfish fishery. The limited access groundfish fishery consists of those enrolled in the sector program and those in the common pool. Both sectors and the common pool are subject to catch limits and accountability measures that prevent fishing in a respective stock area when the entire catch limit has been caught. Additionally, common pool vessels are subject to DAS restrictions and trip limits. All permit holders are eligible to enroll in the sector program; however, many vessels remain in the common pool because they have low catch histories of groundfish stocks, which translate into low PSCs. Low PSCs limit a vessel's viability in the sector program. In general, businesses enrolled in the sector program rely more heavily on sales of groundfish species than vessels enrolled in the common pool.
As of June 1, 2015 (just after the start of the 2015 fishing year), there were 1,068 individual limited access multispecies permits. Of these, 627 were enrolled in the sector program, and 441 were in the common pool. For fishing year 2014, which is the most recent complete fishing year, 717 of these limited access permits had landings of any species, and 273 of these permits had landings of groundfish species.
Of the 1,068 individual limited access multispecies permits potentially impacted by this action, there are 661 distinct ownership entities. Of these, 649 are categorized as small entities, and 12 are categorized as large entities. However, these totals may mask some diversity among the entities. Many, if not most, of these ownership entities maintain diversified harvest portfolios, obtaining gross sales from many fisheries and not dependent on any one. However, not all are equally diversified. This action is most likely to affect those entities that depend most heavily on sales from harvesting groundfish species. There are 61 entities that are groundfish-dependent (obtain more than 50 percent of gross sales from groundfish species), all of which are small, and all but one of which are finfish commercial harvesting businesses.
The limited access scallop fisheries include Limited Access (LA) scallop permits and Limited Access General Category (LAGC) scallop permits. LA scallop businesses are subject to a mixture of DAS restrictions and dedicated area trip restrictions. LAGC scallop businesses are able to acquire and trade LAGC scallop quota, and there is an annual cap on quota/landings. The scallop fishery receives an allocation for GB and SNE/MA yellowtail flounder and southern windowpane flounder. If these allocations are exceeded, accountability measures are implemented in a subsequent fishing year. These accountability measures close certain areas of high groundfish bycatch to the scallop fishery, and the length of the closure depends on the magnitude of the overage.
Of the total commercial business entities potentially affected by this action (1,359), there are 169 scallop fishing entities. The majority of these entities are defined as shellfish businesses (166). However, three of these entities are defined as finfish businesses, all of which are small. Of the 169 total scallop fishing entities, 154 entities are classified as small entities.
There are five categories of permits for the herring fishery. Three of these permit categories are limited access, and vary based on the allowable herring possession limits and areas fished. The remaining two permit categories are open access. Although there is a large number of open access permits issued each year, these categories are subject to fairly low possession limits for herring, account for a very small amount of the herring landings, and derive relatively little revenue from the fishery. Only the midwater trawl herring fishery receives an allocation of GOM and GB haddock. Once the entire allocation for either haddock stock has been caught, midwater trawl vessels may not fish for herring or haddock in the respective area for the remainder of the fishing year. Additionally, if the midwater trawl fishery exceeds its allocation, the overage is deducted from its allocation in the following fishing year.
Of the total commercial business entities potentially regulated by this action (1,359), there are 63 herring fishing entities. Of these, 39 entities are defined as finfish businesses, all of which are small. There are 24 entities that are defined as shellfish businesses, and 18 of these are considered small. For the purposes of this analysis, squid is classified as shellfish. Thus, because there is some overlap with the herring and squid fisheries, it is likely that these shellfish entities derive most of their revenues from the squid fishery.
The small-mesh exempted fisheries allow vessels to harvest species in designated areas using mesh sizes smaller than the minimum mesh size required by the Northeast Multispecies FMP. To participate in the small-mesh multispecies (whiting) fishery, vessels must hold either a limited access multispecies permit or an open access multispecies permit. Limited access multispecies permit holders can only target whiting when not fishing under a DAS or a sector trip, and while declared out of the fishery. A description of limited access multispecies permits was provided above. Many of these vessels target both whiting and longfin squid on small-mesh trips, and, therefore, most of them also have open access or limited access Squid, Mackerel, and Butterfish (SMB) permits. As a result, SMB permits were not handled separately in this analysis.
The small-mesh fisheries receive an allocation of GB yellowtail flounder. If this allocation is exceeded, an accountability measure is triggered for a subsequent fishing year. The accountability measure requires small-mesh vessels to use selective trawl gear when fishing on GB. This gear restriction is only implemented for 1 year as a result of an overage, and is removed as long as additional overages do not occur.
Of the total commercial harvesting entities potentially affected by this action, there are 1,007 small-mesh entities. However, this is not necessarily informative because not all of these entities are active in the whiting fishery. Based on the most recent information, 223 of these entities are considered active, with at least 1 lb (0.45 kg) of whiting landed. Of these entities, 167 are defined as finfish businesses, all of which are small. There are 56 entities that are defined as shellfish businesses, and 54 of these are considered small. Because there is overlap with the whiting and squid fisheries, it is likely that these shellfish entities derive most of their revenues from the squid fishery.
The charter/party permit is an open access groundfish permit that can be requested at any time, with the limitation that a vessel cannot have a
During calendar year 2015, 425 party/charter permits were issued. Of these, 271 party/charter permit holders reported catching and retaining any groundfish species on at least one for-hire trip. A 2013 report indicated that, in the northeast U.S., the mean gross sales was approximately $27,650 for a charter business and $13,500 for a party boat. Based on the available information, no business approached the $7.5 million large business threshold. Therefore, the 425 potentially regulated party/charter entities are all considered small businesses.
This action contains a change to an information collection requirement, which has been approved by the Office of Management and Budget (OMB) under OMB Control Number 0648-0605: Northeast Multispecies Amendment 16 Data Collection. This action adjusts the ACE transfer request requirement implemented through Amendment 16. This rule adds a new entry field to the ACE transfer request form to allow a sector to indicate how many pounds of eastern GB cod ACE it intends to re-allocate to the Western U.S./Canada Area. This change is necessary to allow a sector to apply for a re-allocation of eastern GB ACE in order to increase fishing opportunities in the Western U.S./Canada Area. Currently, all sectors use the ACE transfer request form to initiate ACE transfers with other sectors, or to re-allocate eastern GB haddock ACE to the Western U.S./Canada Area, via an online or paper form to the Regional Administrator. The change only adds a single field to this form, and does not affect the number of entities required to comply with this requirement. Therefore, the change is not expected to increase the time or cost burden associated with the ACE transfer request requirement. Public reporting burden for this requirement includes the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.
Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act, unless that collection of information displays a currently valid OMB Control Number.
The economic impact of each measure is discussed in more detail in sections 7.4 and 8.11 of the Framework 55 EA and are not repeated here. Although small entities are defined based on gross sales of ownership groups, not physical characteristics of the vessel, it is reasonable to assume that larger vessels are more likely to be owned by large entities. The economic impacts of this action are anticipated to result in aggregate gross revenue losses of approximately $8 million for the 2016 fishing year, compared to predicted revenues for the 2015 fishing year. However, the impacts of the approved catch limits would not be uniformly distributed across vessels size classes and ports. Some vessel size classes and ports are predicted to have 50- to 80-percent declines in revenues from groundfish.
Because predicted losses are expected to primarily affect small businesses, this action has the potential to place small entities at a competitive disadvantage relative to large entities. This is mainly because large entities may have more flexibility to adjust to, and accommodate, the measures. However, as discussed in more detail below, the additional declines in gross revenues expected as a result of this action will pose serious difficulties for all groundfish vessels and their crew.
This action updates the numerical estimates of the status determination criteria for all groundfish stocks in order to incorporate the results of the 2015 stock assessments. For many stocks, these updates result in lower values of MSY. For some of these, the lower values of MSY result in lower ACLs in the short-term, which is expected to have negative economic impacts (
Status determination criteria are formulaic based on the results of a stock assessment. As a result, the only other alternative considered for this action was the No Action option, which would not update the status determination criteria for any groundfish stocks based on the 2015 stock assessments. This option would not incorporate the best scientific information available, and would not be consistent with Magnuson-Stevens Act requirements, and, as a result, was not selected. This option would not have any immediate economic impacts. However if this option resulted in overfishing in the long-term, then it would have severe negative economic impacts for the fisheries affected by this action.
This action sets catch limits for all 20 groundfish stocks. For 19 of the stocks, there is only a single catch limit alternative to the No Action alternative, described in Table 5 in the preamble. For witch flounder, there are three non-selected alternatives to the adopted ABC of 460 mt, namely 399 mt, 500 mt, and the No Action alternative. In each of these witch flounder alternatives, except for the No Action alternative, all other groundfish stock allocations would remain the same as those described in Table 5. All of the non-selected action alternatives assume a 14-percent target ASM coverage level for 2016. The No Action alternative assumes a 41-percent target ASM coverage level for 2016.
For the commercial groundfish fishery, the approved catch limits (460 mt witch flounder ABC) are expected to result in a 10-percent decrease in gross revenues on groundfish trips, or $8 million, compared to predicted gross revenues for the 2015 fishing year. The impacts of the approved catch limits would not be uniformly distributed across vessels size classes and ports. Vessels in the 30-50 ft (9-15 m) category are expected to see gross revenue increases of 2 percent. Vessels in the 50-75 ft (15-23 m) size class are expected to see revenue increases of 19 percent. The largest vessels (75 ft (23 m) and greater) are predicted to incur the largest decreases in gross revenues revenue decreases of 30 percent relative to 2015, due primarily to reductions in several GB and SNE/MA stocks (
Southern New England ports are expected to be negatively impacted, with New Jersey, New York, and Rhode Island predicted to incur revenue losses
Two of the three non-selected alternatives would have set all groundfish allocations at the levels described in Table 5, with the exception of the witch flounder allocation. In the alternative that considered a witch flounder ABC of 399 mt, gross revenues were predicted to be the same as the approved catch limit (460-mt witch flounder ABC), namely a 10-percent decrease in gross revenues on groundfish trips, or $8 million, compared to predicted gross revenues for the 2015 fishing year. The 399-mt alternative was also expected to provide the same changes in gross revenue by vessels size class. In the alternative that considered a witch flounder ABC of 500 mt, gross revenues were predicted to be slightly lower than the approved catch limit, namely an 11-percent decrease in gross revenues on groundfish trips, or $9 million, compared to predicted gross revenues for fishing year 2015. Vessels in the 30-50 ft (9-15 m) category were expected to see gross revenue increases of 4 percent. Vessels in the 50-75 ft (15-23 m) size class were expected to see revenue increases of 15 percent. The largest vessels (75 ft (23 m) and greater) were predicted to incur the largest decreases in gross revenues revenue decreases of 28 percent relative to 2015. State and port-level impacts are also similar across the action alternatives.
Under the No Action option, groundfish vessels would be required to operate under default specifications of catch limits at 35 percent of the levels used last fishing year and would have only have 3 months (May, June, and July) to operate in the 2016 fishing year before the default specifications expire. Once the default specifications expire, there would be no ACL for a number of the groundfish stocks, and the fishery would be closed for the remainder of the fishing year. This would result in greater negative economic impacts for vessels compared to the proposed action due to lost revenues as a result of being unable to fish. The adopted action is predicted to result in approximately $69 million in gross revenues from groundfish trips. Roughly 92 percent of this revenue would be lost if no action was taken to specify catch limits. Further, if no action was taken, the Magnuson-Stevens Act requirements to achieve optimum yield and consider the needs of fishing communities would be violated.
Each of the 2016 ACL alternatives show a decrease in gross revenue when compared to the 2015 fishing year. When compared against each other, the economic analysis of the various witch flounder ABC alternatives did not show any gain in gross revenue at the fishery level, or any wide difference in vessel and port-level gross revenue, as the witch flounder ABC increased. The economic analysis consistently showed other stocks (GB cod, GOM cod, and SNE/MA yellowtail flounder) would be more constraining than witch flounder, which may partially explain the lack of predicted revenue increases with higher witch flounder ABCs. In addition, there are other assumptions in the economic analysis that may mask sector and vessel level impacts that could result from alternatives with lower witch flounder ABCs. Ultimately, the adopted alternative (460-mt witch flounder ABC) is expected to mitigate potential economic impacts to fishing communities compared to both the No Action alternative and the 399-mt witch flounder ABC alternative, while reducing the biological concerns of an increased risk of overfishing compared to the 500-mt witch flounder ABC alternative.
The catch limits approved in this action are based on the latest stock assessment information, which is considered the best scientific information available, and the applicable requirements in the Northeast Multispecies FMP and the Magnuson-Stevens Act. With the exception of witch flounder, the only other possible alternatives to the catch limits in this action that would mitigate negative impacts would be higher catch limits. Alternative, higher catch limits, however, are not permissible under the law because they would not be consistent with the goals and objectives of the Northeast Multispecies FMP, or the Magnuson-Stevens Act, particularly the requirement to prevent overfishing. The Magnuson-Stevens Act and case law prevent implementation of measures that conflict with conservation requirements, even if it means negative impacts are not mitigated. The catch limits in this action are the highest allowed given the best scientific information available, the SSC's recommendations, and requirements to end overfishing and rebuild fish stocks. The only other catch limits that would be legal would be lower than those in this action, which would not mitigate the economic impacts of the approved catch limits.
This action approves a set of four alternatives that, in combination, result in a 2016 target ASM coverage level of 14 percent. The four selected alternatives will: (1) Remove ASM coverage for extra-large mesh gillnet trips fishing in Broad Stock Areas 2 and/or 4; (2) remove the administrative standard that 80 percent of discards be estimated at a 30-percent CV; (3) use 3 years of discard information to predict ASM coverage levels; and (4) base the target coverage level on the predictions for stocks that would be at a higher risk for an error in the discard estimate. The No Action alternative would have resulted in a 2016 ASM coverage level of 41 percent.
The combination of ASM alternatives would result in a lower level of ASM coverage (14 percent) relative to the No Action alternative (41 percent) thereby resulting in a reduction in cost to sectors. Selecting the alternatives in combination has the maximum economic impact mitigation compared to No Action. Assuming NEFOP coverage of 4 percent for the 2016 fishing year, industry would be responsible for paying for ASM coverage on an estimated 10 percent of trips under the combined ASM alternatives, and an estimated 37 percent of trips under the No Action alternative. Assuming 20,000 days absent, and a cost of $710 per ASM seaday, the cost of ASM to sectors would be $1.4 million (20,000*.10*$710). This would represent cost savings of $3.9 million relative to the No Action alternative ($5.3 million). The $710 per ASM seaday is based on NMFS cost estimates for the ASM program. If sectors are able to negotiate lower per seaday rates for ASM coverage with service providers, these figures may be overestimates.
Each of the four selected alternatives, if approved in isolation, would have also resulted in a lower ASM coverage level relative to the No Action alternative. Using the effort and ASM cost assumptions noted above, removing ASM coverage for extra-large mesh gillnet trips fishing in Broad Stock Areas 2 and/or 4 would result in a cost savings of $64,610 relative to the No Action alternative. Remove the
This action approves the formation of a new sector, Sustainable Harvest Sector II, for operation for the 2016 fishing year. The No Action alternative was the only alternative to the approved action, and would not approve the formation of Sustainable Harvest Sector II. Allowing the formation of the new sector increases flexibility for groundfish fishery participants within the sector management system, and is thus anticipated to have positive economic impacts.
This action modifies the sector approval process such that a Council framework adjustment or amendment is no longer needed to approve a new sector. The No Action alternative was the only alternative to the approved action, and would maintain the existing process for sector approval. Modifying the sector approval process decreases the administrative cost of approving a new sector, and allows more time for new sectors to prepare operations plans and analysis to support the formation of a new sector. The additional time to prepare operations plans may have minor economic benefits to fishery participants.
This action modifies the current definition of the haddock separator trawl to require that the separator panel contrasts in color to the portions of the net that it separates. An estimated 46 unique vessels had at least one trip that used a haddock separator trawl from 2013-2015. The costs for labor and installation of a new separator panel are estimated to range from $560 to $1,400 per panel. The No Action alternative would not modify the current definition of the haddock separator trawl. The approved action is expected to expedite Coast Guard vessel inspections when compared to the No Action alternative, which could improve enforceability of this gear type and reduce delays in fishing operations while inspections occur. In order to minimize impact of this measure, we are delaying the effective date of this requirement by 6 months to allow affected fishermen time to replace their separator panels with contrasting netting.
For the recreational fishery, the removal prohibition on GOM cod possession, coupled with measures in the recreational rule, are expected to result in short-term positive economic impacts. The measures implemented for 2016 in that rule are expected to result in an increase in the number of trips taken by anglers, and increased catch, while staying within the recreational quotas for 2016. Under the No Action alternative, vessels would be prohibited from harvesting GOM cod, which would have negative economic impacts compared to the selected alternative.
The action allows sectors to convert their eastern GB cod allocation to western GB cod allocation and provide sectors additional flexibility to harvest more of their total GB cod allocation. Only the No Action alternative and the selected alternative were considered. Compared to the No Action alternative, this measure is expected to have positive economic impacts on groundfish-dependent small entities that participate in the sector program due to increased operational flexibility. This measure is also expected to prevent the Western U.S./Canada Area from being closed to a sector prematurely, before the sector harvests all of its GB cod allocation, which will ultimately prevent foregone yield in the fishery. Given the sizable decreases in the GB cod catch limit for 2016, the ability of sectors to convert their eastern GB cod allocation to western GB cod may be of critical importance for allowing members to maintain fishing operations on Georges Bank through 2016. In the absence of GB cod allocation, sectors members are not permitted to fish in the Inshore and Offshore Georges Bank broad stock areas.
Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, a small entity compliance guide will be sent to all holders of Federal permits issued for the Northeast multispecies fisheries, as well as the scallop and herring fisheries that receive an allocation of some groundfish stocks. In addition, copies of this final rule and guides (
Fisheries, Fishing, Recordkeeping and reporting requirements.
For the reasons stated in the preamble, NMFS amends 50 CFR part 648 as follows:
16 U.S.C. 1801
(k) * * *
(16) * * *
(iii) * * *
(B) Fail to comply with the requirements specified in § 648.81(f)(5)(v) when fishing in the areas described in § 648.81(d)(1), (e)(1), and (f)(4) during the time periods specified.
(a) * * *
(3) * * *
(iii) * * *
(A)
(
(
The revisions read as follows:
(a)
(2) Upon receipt of a proposal to form a new sector allocation, and following the deadline for each sector to submit an operations plan, as described in paragraph (b)(2) of this section, NMFS will notify the Council in writing of its intent to consider a new sector allocation for approval. The Council will review the proposal(s) and associated NEPA analyses at a Groundfish Committee and Council meeting, and provide its recommendation on the proposed sector allocation to NMFS in writing. NMFS will make final determinations regarding the approval of the new sectors based on review of the proposed operations plans, associated NEPA analyses, and the Council's recommendations, and in a manner consistent with the Administrative Procedure Act. NMFS will only approve a new sector that has received the Council's endorsement.
(b) * * *
(1) * * *
(i) * * *
(B) * * *
(
(
(
(
(v) * * *
(B)
(
(
(
(4) * * *
(i) * * *
(G) Evidence of adequate insurance (copies of which shall be provided to the vessel owner, operator, or vessel manager, when requested) to cover injury, liability, and accidental death to cover at-sea monitors (including during training); vessel owner; and service provider. NMFS will determine the adequate level of insurance and notify potential service providers;
(c) * * *
(2) * * *
(i) * * *
(A)
(B) [Reserved]
(4) Any sector may submit a written request to amend its approved operations plan to the Regional Administrator. If the amendment is administrative in nature, within the scope of and consistent with the actions and impacts previously considered for current sector operations, the Regional Administrator may approve an administrative amendment in writing. The Regional Administrator may approve substantive changes to an approved operations plan in a manner consistent with the Administrative Procedure Act and other applicable law. All approved operations plan amendments will be published on the regional office Web site and will be provided to the Council.
(d)
(1) GB Cod Hook Sector.
(2) GB Cod Fixed Gear Sector.
(3) Sustainable Harvest Sector.
(4) Sustainable Harvest Sector II.
(5) Sustainable Harvest Sector III.
(6) Port Clyde Community Groundfish Sector.
(7) Northeast Fishery Sector I.
(8) Northeast Fishery Sector II.
(9) Northeast Fishery Sector III.
(10) Northeast Fishery Sector IV.
(11) Northeast Fishery Sector V.
(12) Northeast Fishery Sector VI.
(13) Northeast Fishery Sector VII.
(14) Northeast Fishery Sector VIII.
(15) Northeast Fishery Sector IX.
(16) Northeast Fishery Sector X.
(17) Northeast Fishery Sector XI.
(18) Northeast Fishery Sector XII.
(19) Northeast Fishery Sector XIII.
(20) Tristate Sector.
(21) Northeast Coastal Communities Sector.
(22) State of Maine Permit Banking Sector.
(23) State of Rhode Island Permit Bank Sector.
(24) State of New Hampshire Permit Bank Sector.
(25) State of Massachusetts Permit Bank Sector.
(e) * * *
(3) * * *
(iv)
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
This action sets the recreational management measures for Gulf of Maine cod and haddock for the 2016 fishing year. This action is intended to increase recreational fishing opportunities for cod and haddock consistent with the 2016 catch limits for these stocks, while ensuring the quotas are not exceeded. This action is expected to facilitate the recreational fishery achieving the recreational quotas for 2016.
Effective May 1, 2016.
Copies of a supplemental environmental assessment (EA) to Framework Adjustment 55 to the Northeast Multispecies Fishery Management Plan prepared by the Greater Atlantic Regional Fisheries Office and Northeast Fisheries Science Center; and the Framework 55 EA prepared by the New England Fishery Management Council for this rulemaking are available from: John K. Bullard, Regional Administrator, National Marine Fisheries Service, 55 Great Republic Drive, Gloucester, MA 01930. The Framework 55 EA and supplement are also accessible via the Internet at:
Mark Grant, Sector Policy Analyst, phone: 978-281-9145; email:
Under the Northeast Multispecies Fishery Management Plan (FMP), specific sub-annual catch limits (sub-ACL) for the recreational fishery are established for each fishing year for Gulf of Maine (GOM) cod and haddock. The regulations at 50 CFR 648.89(f)(3) authorize the Regional Administrator, in consultation with the New England Fishery Management Council (Council), to modify the recreational management measures for the upcoming fishing year to ensure the recreational fishery achieves, but does not exceed, the recreational fishery sub-ACLs. The proposed rule for this action published in the
After consulting with the Council, we are increasing recreational fishing opportunities for GOM cod and haddock. Starting May 1, 2016, anglers may retain 1 cod per day during August and September, and may keep up to 15 haddock per day for most of the fishing year. Table 1 provides the new measures effective with the start of fishing year 2016 (May 1, 2016) compared to the current measures. These measures are based on the fishing year 2016 recreational quotas, and removal of the GOM cod retention prohibition approved and implemented as part of Framework Adjustment 55 to the Northeast Multispecies FMP.
For 2016, the GOM haddock recreational sub-ACL is increasing 149 percent compared to 2015, based on continued growth of the stock biomass. Although GOM cod remains overfished and subject to overfishing, biomass has increased slightly, and the GOM cod recreational sub-ACL is increasing 30 percent compared to 2015. A more detailed summary of these catch limits, and the removal of the cod prohibition, is provided in the Framework 55 final rule and not repeated here.
On March 3, 2016, we published a proposed rule in the
Recreational catch and effort data are estimated by the Marine Recreational Information Program (MRIP). A peer-reviewed bioeconomic model, developed by the Northeast Fishery Science Center, was used to estimate 2016 recreational GOM cod and haddock mortality under various combinations of minimum sizes, possession limits, and closed seasons. Catch data and model projections suggest that the recreational fleet is not expected to exceed its fishing year 2015 catch limits for GOM cod or haddock. Further, based on the increased recreational sub-ACLs for the 2016 fishing year, analyses indicate that recreational catch for both GOM cod and haddock could be increased without undermining conservation objectives. Additional details are provided in the Supplemental EA (see
The final measures implemented by this action for the 2016 fishing year, as recommended by the Council, are expected to result in an increase in the number of trips taken by anglers, and increased catch, in comparison to retaining the 2015 measures, while staying within the recreational sub-ACLs for 2016 (Table 2).
We received 102 comments on the proposed 2016 recreational measures. One comment received was not germane to the proposed measures. We received comments from the Council, the Massachusetts Striped Bass Association, the Stellwagen Bank Charter Boat Association, and 99 individuals.
We encourage the recreational community to fish not only for cod, but for the other plentiful species in our waters, including haddock, pollock, and redfish. Recipes for these fish are available on our Fishwatch Web site at:
The Administrator, Greater Atlantic Region, NMFS, determined that these measures are necessary for the conservation and management of the Northeast multispecies fishery and that it is consistent with the Magnuson-Stevens Fishery Conservation and Management Act and other applicable laws.
There is good cause under 5 U.S.C. 553(d)(1) and (3) to waive the requirement for an effective date 30 days after date of publication because this rule relieves a restriction by increasing recreational fishing opportunities for Gulf of Maine (GOM) cod and haddock. This rule could not have been published sooner because data to justify these measures was only recently available and there was a regulatory requirement to first consult with the Council which could be done no sooner than its December 1-3, 2015, meeting. Subsequent to that meeting NMFS was required to publish a proposed rule and accept comment on the proposed measures prior to publishing this final rule. Currently, recreational fishing vessels are prohibited from retaining any GOM cod. Additionally, the recreational bag limit for GOM haddock is three fish and the fishery is only open May through August and November through February.
The measures implemented by this final rule relieve the current restriction on the recreational fishery by increasing the GOM cod bag limit from zero to one fish and the haddock bag limit from 3 fish to 15 fish beginning on May 1, resulting in in positive economic benefits to the recreational fishery. Because the recreational fishery has been closed since February 29, 2016, it is important to immediately implement this increased bag limit to ensure that recreational anglers, and the small businesses that make up the for-hire fleet, can plan for and make the most of
This final rule has been determined to be not significant for purposes of Executive Order 12866.
The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification. As a result, a regulatory flexibility analysis was not required and none was prepared.
Fisheries, Fishing, Recordkeeping and reporting requirements.
For the reasons stated in the preamble, NMFS amends 50 CFR part 648 as follows:
16 U.S.C. 1801
(b)
(c) * * *
(1) * * *
(ii) Each person on a private recreational fishing vessel, fishing from August 1 through September 30, may possess no more than one cod per day in, or harvested from, the EEZ when fishing in the GOM Regulated Mesh Area specified in § 648.80(a)(1); with the exception that each person on a private recreational vessel in possession of cod caught outside the GOM Regulated Mesh Area specified in § 648.80(a)(1) may transit this area with more than one such cod per person up to the possession limit specified at paragraph (c)(1)(i) of this section, provided all bait and hooks are removed from fishing rods and any cod on board has been gutted and stored.
(2)
(ii) Each person on a charter or party boat permitted under this part, fishing from August 1 through September 30, and not fishing under the NE multispecies DAS program or on a sector trip, may possess no more than one cod per day in the GOM Regulated Mesh Area specified in § 648.80(a)(1); with the exception that each person on a charter or party boat in possession of cod caught outside the GOM Regulated Mesh Area specified in § 648.80(a)(1) may transit this area with more than one such cod up to any possession limit under paragraph (c)(2)(i) of this section, provided all bait and hooks are removed from fishing rods and any cod on board has been gutted and stored.
(iii) For purposes of counting fish, fillets will be converted to whole fish at the place of landing by dividing the number of fillets by two. If fish are filleted into a single (butterfly) fillet, such fillet shall be deemed to be from one whole fish.
(iv) Cod harvested by a charter or party boat with more than one person aboard may be pooled in one or more containers. Compliance with the possession limits will be determined by dividing the number of fish on board by the number of persons on board. If there is a violation of the possession limits on board a vessel carrying more than one person, the violation shall be deemed to have been committed by the owner or operator of the vessel.
(v) Cod must be stored so as to be readily available for inspection.
(8)
(B)
(ii)
(
(
(
(B)
(
(
(
(iii) For purposes of counting fish, fillets will be converted to whole fish at the place of landing by dividing the number of fillets by two. If fish are filleted into a single (butterfly) fillet, such fillet shall be deemed to be from one whole fish.
(iv) Haddock harvested in or from the EEZ by private recreational fishing boats or charter or party boats with more than one person aboard may be pooled in one or more containers. Compliance with the possession limit will be determined by dividing the number of fish on board by the number of persons on board. If there is a violation of the possession limit on board a vessel carrying more than one person, the violation shall be deemed to have been committed by the owner or operator of the vessel.
(v) Haddock must be stored so as to be readily available for inspection.
Category | Regulatory Information | |
Collection | Federal Register | |
sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
Publisher | Office of the Federal Register, National Archives and Records Administration |