Federal Register Vol. 82, No.108,

If adopted, new part 746, subpart B will govern most authorized appeals to the Board of adverse determinations made at program office levels under agency regulations that permit such an appeal. The agency's discussion of the proposed changes details which rules would be affected but the Board specifically requests comments on any other agency rules that should provide for an appeal and thus be covered under the proposal. The following actions or determinations would not be covered under the proposal because appeals relating to them are already covered under different agency procedures but the Board nonetheless seeks comments on their proposed exclusion:

• Formal enforcement actions;

• Creditor claims in liquidation, to the extent that the claimant has requested and the Board has agreed to consider the appeal formally on the record;

• Material supervisory determination within the jurisdiction of the Supervisory Review Committee, including appeals of SRC determination to the Board (addressed under a separate agency proposal issued with this proposal);

• Challenges to actions imposed under the prompt corrective action regime; and

• Appeals of matters that are delegated by rule to an officer or position below the Board for final, binding agency action.

The Board is committed to providing credit unions, and other persons or entities that are affected by agency decisions, with an opportunity to obtain meaningful review of those decisions. At present, procedures for obtaining that review are embedded in and scattered throughout NCUA's regulations and, in many cases, are slightly different from one another. For example, time frames for seeking higher level review may differ and deadlines within which final agency action is to be rendered may also be different.1 In this proposal, the Board has developed a more uniform set of procedures to govern those rules in which an appeal to the Board is permitted. The Board seeks to strike a balance that will afford the appellant fair consideration of the issues while avoiding procedures that are overly burdensome, time consuming, and expensive for either the petitioner or the agency. The Board invites comment on all aspects of this proposal.

The proposed procedures would apply to federal credit unions (FCUs), federally insured, state-chartered credit unions (FISCUs), or certain institution-affiliated parties (IAPs) such as officers or directors when appealing an agency determination under one of the rules to which proposed part 746, subpart B would apply. For example, FCUs and FISCUs appealing a waiver determination by a regional director under the loan participations rule would be subject to these procedures.2 These procedures would also apply to an IAP appealing an adverse determination relating to a change in officials.3

Several NCUA regulations contain appeals procedures in addition to their substantive provisions. These procedures generally lack uniformity and may be confusing for those seeking an appeal. To improve the appeals process that applies under the covered rules, the Board proposes to promulgate a more uniform set of appeals procedures contained in subpart B of part 746 to replace the current inconsistent appeals procedures that now apply to agency determinations under the affected regulations. The Board proposes to include in each of the affected rules a cross-reference to the proposed procedures to be located in subpart B of part 746.

The following is a bulleted list of the various regulations that have appeals procedures that would be replaced by the proposed procedures in subpart B of part 746.

• Claims of a Creditor of an Insolvent FICU Under an NCUA Alternative Resolution Dispute Process. Within 60 days from the date that NCUA's Asset Management and Assistance Center (AMAC) issues a notice of disallowance, a creditor of an insolvent FICU may file or continue a lawsuit in U.S. district court or seek review by the Board.4 Claimants seeking Board review may request a hearing on the record in accordance with part 747 of NCUA's regulations and the formal adjudicatory procedures set forth in the APA.5 Alternatively, a claimant seeking review by the Board may submit to an alternative dispute resolution process.6 The proposed amendments supplant those procedures currently in part 709 of NCUA's regulations 7 and replace them with a reference to new subpart B to part 746.

• Payment of Claims Regarding Federally Insured Shares or Deposits. The FCU Act provides that the Board is to make payment of the insured shares or deposits as soon as possible following a liquidation.8 The FCU Act authorizes the Board to require a proof of claim to be filed with it before making payment, and it contemplates that the Board may “approve or reject” such claims.9 The FCU Act also provides that the Board may, by regulation, prescribe procedures to resolve disputed claims.10 No conditions or limitations are imposed by statute on this resolution process, although the FCU Act does provide that the agency's final determination of an insurance claim is subject to judicial review in accordance with the relevant provisions of the APA.11 Subpart B to part 745 currently implements this authority. The proposed amendments would replace the current procedures.

• Chartering and Field of Membership. NCUA's Office of Consumer Financial Protection and Access (OCFPA) is responsible for making certain determinations regarding chartering and field of membership, and these determinations are appealable to the Board. The FCU Act does not provide any specific right to a hearing on the record in connection with any of these determinations, and the procedures do not call for such a proceeding. The Board proposes to delete from NCUA's Chartering and Field of Membership Manual all descriptions of the current procedures for challenging OCFPA determinations, such as the denial of initial charter applications (including proposed senior officials), requests for expansion or spinoff, requests to add an underserved area, and conversion requests. The Board proposes that all of these procedures be governed by new subpart B to part 746.

• Community Development Loans. In accordance with part 705 of NCUA's regulations, qualifying credit unions may apply for loans from NCUA's Community Development Revolving Loan Fund.12 A credit union failing to qualify may appeal to the Board. Part 705 specifies that the appeal must be taken within 30 days of the notice of disqualification, and it provides that the Board's review is limited to the threshold question of qualification.13 The Board proposes to replace these procedures with new subpart B to part 746.

• Golden Parachutes. Pursuant to part 750 of NCUA's regulations, FICUs are limited in the amount of severance plan arrangements that are permissible for senior level officials.14 Credit unions are permitted to request from the regional director or the Office of National Examinations and Supervision (ONES) Director, as appropriate, the authority to make an otherwise impermissible severance payment. If the request is denied, part 750 specifies a process by which the credit union may appeal to the Board.15 The Board proposes to replace that process with the procedures in subpart B to part 746.

• Investment Authority. An FCU may appeal decisions by the regional director or ONES Director rejecting its request for expanded investment authority or authority to engage in derivatives investment activity.16 In each case, the investment rule is silent as to the appeals procedures other than timing. The Board proposes that these appeals be governed by the procedures in new subpart B to part 746.

• Change of Officials for Troubled or Newly Chartered Credit Unions. A `troubled' or newly chartered FICU may appeal an adverse determination regarding a change of an official or officials to the Board. Procedures governing this review are in § 701.14 of NCUA's regulations. The regulation refers to subpart J of part 747 of NCUA's regulations which contains explicit guidance on the appeals process.17 There is no express statutory right to a hearing on the record in this circumstance. The Board proposes to replace the current procedures with the procedures in new subpart B to part 746. The 90-day time frame within which the Board must decide an appeal under § 701.14 would be preserved, as would other shorter time frames currently included in subpart J.

• Conversions and Mergers. NCUA administers the processes by which a FICU may convert to a mutual savings bank or merge into a bank.18 Part 708a specifies that the appropriate NCUA official will oversee the methods and procedures of the conversion or merger. If the appropriate NCUA official disapproves the methods by which the vote was taken or the procedures applicable to the vote, the FICU may appeal that disapproval to the Board.19 For conversions, a FICU may appeal a determination within 30 days and the Board must act within 90 days.20 For mergers, a FICU may appeal a determination within 30 days and the Board must act within 120 days.21 The Board proposes to replace these procedures with the appeals procedures in new subpart B to part 746. The Board specifically invites comment on whether the extension of these deadlines would pose an undue hardship on credit unions converting to mutual savings banks or merging with banks.

• Other Miscellaneous Regulations Affected by Subpart B to Part 746. The following is a list of additional regulations that contain appeals procedures that would be replaced with the proposed appeals procedures in subpart B of part 746.

• NCUA's general lending rule.22

• NCUA's eligible obligations rule.23

• NCUA's loan participations rule.24

• Section 701.32 of NCUA's regulations regarding public unit and nonmember shares.25

• Section 701.34 of NCUA's regulations regarding the low income designation.26

• Section 741.11 of NCUA's regulations regarding branch offices outside the United States.27

New subpart B to part 746 is designed to govern appeals under the regulations addressed above. There are five areas that are excluded from the scope of the proposed rule. Each of these is discussed below.

Enforcement Actions. Appeals that involve an agency hearing on the record and the development of an initial decision by a hearing officer or administrative law judge and are governed by formal procedural requirements described in secs. 7 and 8 of the APA.28 These formal requirements are applicable only where the Federal Credit Union Act (FCU Act) 29 specifically calls for the agency's adjudication “to be determined on the record after opportunity for an agency hearing.” 30

Section 206 of the FCU Act addresses enforcement actions that the NCUA may take against an insured institution or its IAPs.31 Of these, four specifically include an opportunity for the affected entity or individual to be heard before the action becomes effective. These include actions to terminate the institution's insured status (sec. 206(c)), cease and desist actions (sec. 206(e)), removal actions (sec. 206(g)), and civil money penalties (sec. 206(k)), including any actions to obtain enforcement of an outstanding order issued under sec. 206 or under the prompt corrective action provisions in sec. 216 of the FCU Act.32 There are two enforcement actions that may be taken by NCUA with immediate effectiveness and an agency hearing is not required (temporary cease and desist actions (sec. 206(f)) and actions to appoint a conservator (sec. 206(h)). Each of these carries with it an opportunity for the affected entity or individual to proceed immediately to court to file a challenge to the NCUA's action.

Other formal enforcement measures are found in sec. 131 of the FCU Act, which provides that FCUs convicted of money laundering, cash transaction reporting, or certain other related offenses are subject to forfeiture of their charter after a pre-termination hearing conducted on the record.33 In addition, FICUs fined for failure to file accurate call reports may request a hearing on the record under sec. 202(a)(3) of the FCU Act.34 Similarly, FISCUs fined for failure to submit accurate certified statements in connection with calculating National Credit Union Share Insurance Fund premium charges may request a hearing on the record under sec. 202(d)(2)(E) of the FCU Act.35 Finally, in accordance with sec. 304(e)(3) of the FCU Act, the Board may terminate a FICU's membership in the Central Liquidity Facility (CLF) for non-compliance with statutory or regulatory requirements pertaining to the CLF, but only after providing the opportunity for an agency hearing.36

Actions under sec. 206(i) of the FCU Act to suspend, remove, or prohibit individuals who have engaged in certain criminal acts are treated somewhat differently. In these instances, the affected individual is removed immediately, but is given the opportunity to appear before the Board to show that his or her continued service on behalf of the FICU does not pose a threat to the interests of the credit union or its members.37 The FCU Act directs the Board to fix a time and place at which the party may appear, in person or through counsel, to submit written material and make oral presentations and, with the agreement of the Board, oral testimony.38

For these types of actions, NCUA has promulgated explicit rules of procedure, which provide safeguards such as representation by counsel, document production, discovery, testimony from witnesses, an official record of the proceedings, and the development of a recommended decision by an administrative law judge for the consideration of the Board.39 Such procedures regarding these enforcement actions would not be covered by new subpart B to part 746.

Creditor claims in liquidation that are litigated or reviewed by the Board under formal agency adjudication procedures. The FCU Act specifies that a person appealing an initial creditor claim determination by the liquidating agent of an insolvent FICU may either: (1) File an action in federal court (or renew an action that had been pending before the liquidation began) seeking a de novo judicial determination of the merits of his claim; or (2) they may request that the Board review the claim.40 The FCU Act also specifies that, if the Board agrees to the review request, the Board must consider the claim after opportunity for a hearing on the record.41 Part 709 of NCUA's regulations implements this provision by providing that the formal adjudication provisions set out in part 747, subpart A will govern the process.42 These provisions remain in place and are not affected by new subpart B to part 746. However, as discussed above, alternatively a petitioner may request an appeal under the proposed provisions in subpart B to part 746.

Material Supervisory Determinations. As required by the Riegle Community Development and Regulatory Improvement Act of 1994,43 NCUA established an SRC to provide a forum for FICUs to appeal an examiner's material supervisory determinations. Procedures followed by the SRC are described in Interpretive Ruling and Policy Statement (IRPS) 11-1, as amended by IRPS 12-1. Subjects that may be appealed to the SRC include examination ratings, the adequacy of loan loss reserve provisions, and loan classifications on loans that are significant to the institution.44 The Board expanded the jurisdiction of the SRC in April 2011 by adding appeals of determinations by the Director of the Office of Small Credit Union Initiatives to deny a reimbursement request made in connection with a technical assistance grant.45 As proposed, the provisions in new subpart B to part 746 would not apply to issues that are reviewable by the SRC. Along with the issuance of this proposed rule, the Board is seeking comments on a separate proposal that contains significant changes to the SRC, including how adverse determinations made by the SRC may be appealed to the Board. If adopted, those proposed changes to the SRC would be contained in a new subpart A to part 746.

Prompt Corrective Action. Under the FCU Act, FICUs are subject to mandatory and discretionary supervisory actions, based on their net worth position.46 Mandatory actions are not subject to appeal, but discretionary actions are. Under the FCU Act, these discretionary measures are considered “material supervisory determinations” and could have been made subject to the jurisdiction of the SRC.47 The FCU Act, however, permits the Board to establish a separate appeals process regarding these determinations. Exercising this authority, the Board determined previously that challenges to determinations made by a regional director or ONES Director and imposed under the prompt corrective action regime are more appropriately covered by the procedures in subpart L to part 747.48 These procedures are informal but specialized, ranging from the submission of written materials (in the case of orders imposing discretionary supervisory action) 49 to requesting a hearing before a presiding officer designated by the Board (for orders reclassifying a credit union on safety and soundness criteria, as well as orders to dismiss a director or senior executive officer). In the context of discretionary supervisory actions, the Board will respond to the written challenge.50 In the context of challenges to reclassification and dismissal of officials or directors, the rules provide for a hearing at which the appellant is entitled to be represented by counsel, to introduce relevant documents, and to make oral presentations. Witness testimony is permissible with the consent of the presiding officer.51 The hearing is recorded, and the appellant is entitled to receive a transcript upon request and payment of the cost thereof. The presiding officer makes a recommendation to the Board, which has 60 days in which to decide the issue.52

Because the determinations made by a regional director or the ONES Director and imposed under the prompt corrective action regime are addressed separately, they are not subject to proposed subpart B to part 746. Similar determinations involving exclusively corporate credit unions are set forth in subpart M to part 747 and are likewise unaffected by this proposal. However, the Board seeks specific comments as to whether appeals provisions relating to prompt corrective action are sufficient and whether such provisions should be consolidated with the proposed part 746.

Other Exclusions. By rule, appeals of adverse determinations under the Freedom of Information Act are decided by the General Counsel.53 The General Counsel also decides on requests made under NCUA's Touhy regulation 54 and appeals of initial determinations made under the Privacy Act.55 None of these areas would be affected by this proposed rule but the Board seeks comments on their exclusion.

The proposed procedures in subpart B to part 746 would also not affect how consumer complaints are processed by the NCUA.56 On September 30, 2010, the Board delegated the authority to examine and supervise federal credit unions for compliance with consumer laws and regulations to OCFPA. As a result of this delegation, consumers may not appeal determinations by OCFPA's Director of the Division of Consumer Affairs to the Board. The Board invites comment on this exclusion.

The Board is proposing to add subpart B to part 746 to address procedures that govern informal appeals of agency decisions under specific regulations. As discussed above, the proposed rule would amend existing NCUA regulations to include a cross-reference to the procedures contained in this subpart. The Board proposes to adopt these procedures to improve and streamline the appeals process as it applies to decisions under the covered rules.

The first section of proposed subpart B to part 746 states the Board's authority for issuing the rule as well as its scope and purpose.

The Board is issuing this proposed rule pursuant to authority granted to it by secs. 120, 207, and 209 of the FCU Act. Section 120 of the FCU Act is a general grant of regulatory authority over FCUs. Section 207 of the FCU Act is a specific grant of authority over share insurance coverage, conservatorships, and liquidations. Section 209 of the FCU Act is a plenary grant of regulatory authority to issue rules and regulations necessary or appropriate to carry out its role as share insurer for all FICUs.

As stated above, the purpose of the proposed rule is to provide uniform procedures for appeals to the Board under affected agency regulations. The Board believes the creation of uniform rules will help ensure that appellants receive appropriate due process and that agency decisions are made in a prompt and efficient manner.

Paragraph (c) first lists each of the regulations with current appeal procedures that would be covered under the new rule. The section would also clarify that there are five categories of agency actions that are excluded from the scope of the rule. Because this rule would only apply to informal agency adjudications, formal adjudications would be excluded. Likewise, creditor claim appeals where the claimant has requested a hearing on the record would be excluded. In addition, the rule would not cover appeals of prompt corrective action determinations or material supervisory determinations appealable to NCUA's SRC. Finally, the rule would not cover the appeal of FOIA determinations, Privacy Act determinations, or determinations made under NCUA's Touhy regulation.

In § 746.202, the Board proposes to define certain terms. Unless otherwise defined, the Board expects FICUs and other affected parties to interpret terms or phrases according to their plain meaning.

The proposed rule would define “initial agency determination” to clarify that the rule only applies to certain agency decisions made by personnel below the Board level. The rule does not apply to any action that results in the formulation of a rule, regulation, guidance document, or policy statement.

The term “petitioner” would refer to a natural person or legal entity seeking review of an initial agency determination. Several of NCUA's regulations use different terminology when referring to parties appealing determinations to the Board. For example, a party appealing the denial a creditor claim is a “claimant,” 57 while a party appealing a denial of share insurance coverage is referred to as an “accountholder.” 58 Rather than use all of these different terms, the Board is proposing to adopt a uniform term to describe all classes of individuals or legal entities appealing determinations to the Board.

Similarly, the Board is proposing to adopt a uniform term “program office” to refer to all offices within NCUA responsible for making initial agency determinations. Several NCUA offices below the Board level are responsible for administering various NCUA regulations. For example, chartering and field of membership determinations are made by OCFPA, while waivers and safety and soundness determinations are made by the appropriate regional office or ONES. Rather than use different terminology, the Board is proposing to adopt “program office” as a uniform term to describe the different NCUA offices responsible for making initial agency determinations.

Proposed § 746.203 would set forth procedures for requesting reconsideration from a program office prior to filing an appeal with the Board. Several regulations issued by the NCUA Board permit affected parties to request reconsideration. This process is a useful, relatively inexpensive, and efficient method of resolving most disputes. It also limits the overall number of matters appealed to the Board. Therefore, the Board proposes to make this optional procedure available for any matter that could otherwise be appealed to the Board under part 746, subpart B and seeks comments on this approach.

The reconsideration process promotes greater efficiency by allowing matters to be resolved at the program office level where possible. In general, the Board anticipates that the disposition of a request for reconsideration will either resolve the matter entirely or clarify the issues that remain for resolution at the Board level. Ordinarily, the Board anticipates that one request for reconsideration will be sufficient, and that the next appropriate step for a party still seeking resolution of the issues will be to appeal to the Board. The rule recognizes, however, that there may be cases involving extenuating circumstances, such as the discovery of new evidence or documentation, and that a second request for reconsideration may be appropriate in such circumstances. Absent such circumstances, a second request for reconsideration would be treated as an appeal to the Board.

Paragraph (e) would require the program office to issue a written determination within 30 calendar days of receiving a first request for reconsideration. Paragraph (f) would specify that the written determination must include a description of any right to appeal a determination to the Board. In the case of creditor claims, paragraph (f)(2) would require a description of the right to file or continue a lawsuit in federal court.

In the Board's experience, 30 calendar days is a sufficient amount of time for a program office to consider new information and reach a determination after reconsideration. If the program office fails to make a determination within 30 calendar days, proposed paragraph (g) would treat the request for reconsideration as if it had been denied. To avoid undue prejudice, the denial of a request for reconsideration is treated as an initial agency determination for purposes of the deadline to file an appeal with the Board in proposed § 746.204. If the petitioner obtains new information or there are reasonable, mitigating circumstances that precluded the presentation of existing information in connection with the first request for reconsideration, as determined solely by the program office in its reasonable judgment, the petitioner may request a second reconsideration prior to a Board appeal.

Proposed § 746.204 would state the procedures for filing an appeal with the Board. The provision would also list the information that must be included as part of the appeal. These requirements would be similar to the current requirements for creditor claims and share insurance claims, including the requirement that any appeal must be filed with the Secretary of the Board within 60 calendar days of the date of the initial agency determination or, if applicable, any determination following a request for reconsideration. However, the Board may grant extensions for timely filing in response to a petitioner's request base on the petitioner's reasonable, extenuating circumstances.

In order to establish subject matter jurisdiction, federal courts typically require affected parties to exhaust administrative remedies.59 For example, in creditor and share insurance cases, the failure to exhaust administrative remedies is a jurisdictional bar preventing affected parties from seeking judicial review of their claims in federal court.60 Proposed paragraph (c) would clarify that, absent mitigating circumstances, a petitioner who fails to file a timely request for an appeal would be considered to have waived claims that may be adjudicated under part 746, subpart B.

Proposed paragraph (d) would outline the content requirements for an appeal to the Board. To ensure the Board is able to review an appeal in a timely and efficient manner, this paragraph would require a petitioner to provide a statement of the facts on which an appeal is based, any objections to the basis on which the program office made its initial determination, and any additional evidence that may be relevant to the matter that was not previously provided to the program office. Proposed paragraph (e) would address the burden of proof at the appeal level.

Proposed paragraph (f) would describe the right of the petitioner to file supplemental materials within 45 calendar days of filing an appeal. In addition to the authority of the Board to request additional information, the petitioner may amend or supplement the written record. If the petitioner does amend or supplement the record, the Board is permitted to request additional information. A petitioner's failure to provide information requested by the Board could serve as a basis for denial of an appeal.

Section 746.204(g) would specify that a petitioner may request an oral hearing before the Board and provides cross-references to proposed § 746.207, which sets out the procedures that govern oral hearings. The petitioner may request to appear before the Board, in person or through or with counsel. This request should be filed with the initial appeal documents. On his or her own initiative or at the request of the petitioner, the Chairman may in his or her sole discretion allow for a hearing to be conducted via teleconference or video conference facilities.

This section of the proposed rule describes preliminary internal processes for reviewing appeals. Additional information from the petitioner may be requested by the agency in order to provide the Board with a more full and complete administrative record but such requests must be reasonable and timely to facilitate the processing of the appeal, not to delay it.

Proposed § 746.206 would set out the standard procedures followed by the Board when it receives a timely appeal. These proposed procedures would be, in some respects, a codification of informal practices that the Board currently follows when reviewing appeals.

Proposed paragraph (a) would describe procedures followed by the Special Counsel when reviewing an appeal. After receiving a timely appeal, the Special Counsel would be responsible for gathering relevant evidence from the appropriate program office and conducting an independent review of these materials along with any materials provided by the petitioner. The Special Counsel would then provide a written recommendation to the Board and, at the request of the Board, make an oral presentation in an official meeting concerning the recommendation. The duties of the Special Counsel under this provision must be fulfilled in a timely manner and all requests for additional information must be reasonable, to facilitate the appeal.

Proposed paragraph (b) would require the Board to render a written decision stating the reasons for the decision within 90 calendar days from the date of receipt of an appeal by the Secretary of the Board. Such a decision would constitute a final agency action permitting the petitioner to seek review in federal court under the APA. In the discretion of the Chairman, the time for the Board's decision may be extended as the Chairman may consider necessary or appropriate for a full and fair consideration of the issues, including accommodation of an oral hearing. If the Board does not reach a decision within 90 calendar days from the date of receipt, or within any extension of time as established by the Chairman, the appeal will be deemed to be denied. The deadline will help ensure that the Board has adequate time to decide a matter on appeal while avoiding any undue prejudice to petitioners from unnecessary delays.

This section of the proposed rule sets out the process for requesting and conducting an oral hearing. The Board recognizes that, in some unusual cases, the opportunity to make a presentation in person is necessary or useful to assure a thorough understanding of the issues in a case.

Paragraph (a) would describe the process for requesting an oral hearing. The request would accompany the notice of appeal itself, set out in a separate document entitled “Request for Oral Hearing.” The petitioner must show good cause as to why the NCUA should hold an oral hearing, stating reasons why the case cannot be presented adequately with only written statements. Proposed paragraph (b) would specify that an oral hearing would be scheduled provided at least one Board member agrees to hear the appeal, but specifies that the action by a Board member to approve an oral hearing must be taken within 20 days of the receipt of the appeal by the Board Secretary. The Special Counsel would notify the petitioner of the Board's determination whether to approve a request for an oral hearing. Proposed paragraph (c) would specify that, in the event the request does not receive the support of at least one Board member, the appeal will proceed on the basis of the written record.

Oral hearings will be held at NCUA headquarters in Alexandria, Virginia, except that on his or her own initiative or at the request of the petitioner, the Chairman may in his or her sole discretion allow for a hearing to be conducted via teleconference or video conference facilities.

At an oral hearing, the petitioner would be permitted to be represented by not more than two officers, employees, or other representatives (including counsel) unless the Chairman, in his or hers sole discretion, allows a greater number of participants. This proposed paragraph recognizes the general right granted in the APA for individuals appearing in person before an agency to be “accompanied, represented, and advised by counsel or, if permitted by the agency, by other qualified representative[s].” 61 In general, courts have found the right to counsel to be a fundamental aspect of procedural due process in both informal and formal agency adjudications.62

I. Background

Section 309(a) of the Riegle Community Development and Regulatory Improvement Act of 1994 (Riegle Act) 1 required the NCUA and the federal banking agencies to establish independent intra-agency appellate processes to review material supervisory determinations.2 The Riegle Act also required the NCUA and the federal banking agencies to ensure that appeals of material supervisory determinations are heard and decided expeditiously and that appropriate safeguards exist for protecting appellants from retaliation by agency examiners.3

On November 17, 1994, the Board published proposed Interpretive Ruling and Policy Statement (IRPS) 94-2 “Guidelines for the Supervisory Review Committee” in the Federal Register and solicited public comment.4 The Board proposed to establish a committee of five regular members consisting of NCUA's Executive Director, General Counsel, Director of E&I, a regional director, and one additional senior or Board staff member. The regional director was to be selected on a rotating basis every two years and an alternate regional director was to be designated to consider matters arising in the regular regional director member's region. The Executive Director was to serve as chair. The jurisdiction of the SRC was to be limited to matters specifically listed as material supervisory determinations in the Riegle Act.5

After receiving and considering public comment, the Board adopted an IRPS and published it in the Federal Register on March 20, 1995 as IRPS 95-1.6 In the final IRPS, the Board reduced the size of the SRC from five members to three, with each member appointed by the NCUA Chairman. The jurisdiction of the SRC was limited to matters specifically listed as material supervisory determinations in the Riegle Act, although the Board reserved the right to expand the number of supervisory determinations appealable to the SRC after gaining some experience with the process. The final IRPS also clarified that material “examination ratings” included composite CAMEL ratings of 3, 4, or 5, as well as component ratings of those composite ratings.

The Board revised the IRPS in 2002 to expand the jurisdiction of the SRC to include decisions by a regional director to revoke a credit union's authority under NCUA's then Regulatory Flexibility Program (RegFlex).7 In 2011, the Board revised the IRPS again to expand the jurisdiction of the SRC to include denials of Technical Assistance Grant (TAG) reimbursements by the Director of the Office of Small Credit Union Initiatives (OSCUI).8 This revision was published in the Federal Register as IRPS 11-1, “Supervisory Review Committee” on April 29, 2011. The Board has not made material changes to IRPS 11-1 since 2012, when it removed all references to RegFlex to reflect the elimination of that program.9

The proposed rule would: (1) Expand the number of material supervisory determinations appealable to the SRC; (2) create an optional intermediate level of review before an appeal is brought to the SRC; and (3) change the nature and composition of the SRC. The proposed rule would be codified as Subpart A to part 746. The Board is requesting comment on all aspects of this proposed rule.

Based on NCUA's experience in administering the current appellate process, the Board believes that it would be efficient and beneficial if the SRC appeals process is more transparent and objective and if more material supervisory determinations are appealable to the SRC. The proposed rule would, therefore, redefine the term “material supervisory determination” to include supervisory determinations that may affect the capital, earnings, operating flexibility, or that may otherwise affect the nature and level of supervisory oversight of a federally insured credit union (FICU). Certain exceptions would be made for material supervisory determinations that are specifically excluded by the Riegle Act or where other appeals procedures exist.

The Board is also proposing to add an optional intermediate level of review by the Director of E&I, or his or her designee, before a FICU appeals to the SRC. A decision by the Director of E&I would be made in writing with no opportunity for oral presentations from either the petitioner or the program office. The Director of E&I, in addition to his or her supervisory expertise, would have the ability to consult with the parties either jointly or separately before rendering a decision. If the FICU or program office is unsatisfied with the decision rendered by the Director of E&I, or his or her designee, either may appeal that decision to the SRC. This optional level of review provides enhanced due process to FICUs that wish to use it.

The proposed rule would restructure the SRC by creating a rotating SRC pool of not less than eight individuals appointed by the NCUA Chairman from among NCUA's senior staff in the regional and central offices. The Secretary of the Board would serve as the permanent SRC Chairman and would select three SRC members from this SRC pool to serve as the SRC for a particular appeal. As the permanent SRC Chairman, the Secretary of the Board would also be a member of the SRC pool and be eligible to serve as a member of the SRC for a particular appeal.10 The Special Counsel to the General Counsel (Special Counsel) would serve as a permanent non-voting member of each SRC to advise each committee on procedural and legal matters.

The SRC Chairman would not be permitted to select SRC members from the program office that rendered the material supervisory determination that is the subject of the appeal to hear that appeal. Likewise, in cases where the FICU requested review by the Director of E&I, staff from E&I would be ineligible to serve as SRC members for that appeal. The presence of two SRC members (physically, telephonically, or by video conference) would be required as a quorum, and a majority of votes present would be required for action on an appeal.

Under the proposed rule, an appeal to the SRC would resemble the following decision tree:

The Board is proposing to create Subpart A to part 746 which would contain a comprehensive set of procedures to govern the appeal of material supervisory determinations. In a separate rulemaking issued together with this proposed rule, the Board is proposing significant changes to the administrative appeals process for matters that are outside of the jurisdiction of the SRC, which would be contained in Subpart B to part 746.

Proposed § 746.101 states the legal authority for the Board to issue this proposed rule. As noted in the Background section above, the Board is issuing this proposed rule pursuant to its authority under § 309(a) of the Riegle Act.11 The Board is also issuing this proposed rule under its plenary regulatory authority in the Federal Credit Union Act.12

This section also states the purpose and scope of the rule. The scope of the proposed rule is limited to appeals of “material supervisory determinations,” a term defined by the regulation, and does not apply to appeals where the petitioner has been granted a right to a hearing on the record or appeals governed by Subpart B to part 746.

In § 746.102, the Board proposes to define certain terms. Unless defined, the Board expects FICUs and other affected parties to interpret terms or phrases consistently with the general definitions in § 700.2 of NCUA's regulations or, where not defined, according to their plain meaning.

The term “petitioner” refers to an entity, including a program office, requesting reconsideration or review, or filing an appeal pursuant to the procedures set forth in this subpart. As detailed more fully below, FICUs must first request reconsideration from the appropriate program office and then may request review from the Director of E&I. Either a FICU or a program office may appeal a partial or complete adverse decision by the Director of E&I, or his or her designee, to the SRC. Similarly, either a FICU or program office may appeal a partial or complete adverse decision by the SRC to the Board. Recognizing that, depending on the procedural posture of a particular appeal, the entity requesting review may be either a FICU or a program office, the Board is proposing to adopt a uniform term to describe all entities requesting agency action on a particular matter.

The Board is proposing to adopt a uniform term “program office” to refer to all offices within NCUA responsible for making material supervisory determinations. Several NCUA offices are responsible for administering various NCUA regulations. Rather than use different terminology, the Board is proposing to adopt “program office” as a uniform term to describe all of the different NCUA offices responsible for making material supervisory determinations.

The term “respondent” refers to an entity, including a program office, defending against an action by a petitioner. As noted above, depending on the procedural posture of a particular appeal, the entity requesting review may be either a FICU or a program office. Therefore, the Board is proposing to adopt a uniform term to describe all entities defending against a petitioner's action.

In response to proposed IRPS 94-2, several commenters argued that the additional disputes other than those specifically listed in the Riegle Act should be appealable to the SRC. In IRPS 95-1, however, the Board adopted a narrow definition of “material supervisory determination” in order to allow for the opportunity to gain experience with the SRC appeals process. Having administered SRC appeals for over 20 years, the Board has gained sufficient experience with the SRC appeals process and believes that expanding the jurisdiction of the SRC to be consistent with the federal banking agencies is now appropriate to provide FICUs with enhanced due process.

Proposed § 746.103 defines the term “material supervisory determination” to mean a written decision by a program office (unless ineligible for appeal) that may significantly affect the capital, earnings, operating flexibility, or that may otherwise affect the nature and level of supervisory oversight of a FICU subject to the exclusions detailed below. Examples of material supervisory determinations include, but are not limited to, determinations related to the adequacy of loan loss reserve provisions; classification of loans and other assets that are significant to a FICU; and determinations related to restitution orders under the Truth in Lending Act (TILA). This proposed definition is similar to the definition used by the Federal Deposit Insurance Corporation (FDIC).13

The proposed definition limits the ability to appeal CAMEL ratings to composite ratings. Component ratings would no longer be appealable to the SRC unless those ratings may affect the nature and level of supervisory oversight of a FICU. For example, if eligibility for an extended examination cycle is contingent on a component rating of 1 or 2 in management, a management rating of 3 would be appealable to the SRC. Based on its experience with administering the current appellate process, the Board does not believe that component ratings are “material” in most cases if the FICU otherwise maintains an overall composite CAMEL rating of 1 or 2. Therefore, the proposed definition of “material supervisory determination” limits the ability of FICUs to appeal examination ratings only to those cases where the FICU has received a composite rating of 3, 4, or 5, or a component rating that could trigger supervisory action.

The proposed rule specifically lists a restitution order pursuant to TILA as a material supervisory determination appealable to the SRC.14 Section 108 of TILA permits the Board, where appropriate, to order federal credit unions (FCUs) to make restitution to consumers that have been harmed by inaccurate disclosures.15 Determining whether restitution is appropriate often depends on whether there is a clear and consistent pattern or practice of violations, gross negligence, or a willful disregard for the requirements of TILA. Examiners are in the best position, in the first instance, to determine whether FCUs demonstrate clear and consistent patterns of TILA violations. Because review of these determinations requires consideration of the facts and circumstances before the examiner, the Board believes the SRC appeals process is the most appropriate method for considering these appeals before taking an appeal to the Board.

Notwithstanding the broad definition of “material supervisory determination,” the Board proposes to exclude certain material supervisory determinations from the jurisdiction of the SRC. The Riegle Act specifically excludes the decision to appoint a conservator or liquidating agent for a FICU and the decision to take prompt corrective action.16 The proposed rule also excludes enforcement-related actions and decisions, including appeals related to the underlying facts and circumstances that form the basis of a recommended or pending enforcement action, because NCUA has explicit rules governing the adjudication of these matters that provide affected parties with trial-like protections.17

The purpose of excluding enforcement-related actions and decisions (including the underlying facts and circumstances that form the basis of a pending formal enforcement action) is to ensure that the enforcement and SRC processes remain separate. Therefore, once an enforcement action is pending against a FICU, the proposed rule would prohibit FICUs from requesting review by the Director of E&I, or his or her designee, or appealing to the SRC any material supervisory determination that serves as the basis of that enforcement action. In other words, once an enforcement action is initiated, the SRC appeals process is suspended, regardless of how far along the FICU may be in that process, until the enforcement action is resolved.

The proposed rule also excludes supervisory determinations for which other appeals procedures exist such as a capital classification for prompt corrective action purposes.18 This recognizes that there are some situations where the Board may, in its discretion, draft rules with explicit appeals procedures or explicitly state that certain matters are governed by particular appeals procedures set forth elsewhere in NCUA's regulations. In those cases, the Board expects FICUs to follow the explicit procedures stated in the regulation rather than attempting to appeal matters to the SRC.

Proposed § 746.104 addresses a series of general procedural issues that apply throughout the proposed rule. These matters include the standard of review, the effect of an appeal on the commencement of enforcement actions, the effect of an appeal on applications for additional authority or waiver requests, and the tolling of timing requirements.

The goal of the proposed rule is to enhance due process for credit unions and to apply NCUA's policies and practices fairly and consistently among all FICUs. Therefore, the Board proposes to place the burden of showing an error in an appealed determination on the petitioner. The objective of appellate review by the Director of E&I, the SRC, and the Board is to ensure that the appealed determination is correct and not just reasonable. If the Director of E&I, the SRC, or the Board, as applicable, determines that the appealed determination is incorrect upon their respective de novo review, then they will render a corrected determination.

The proposed rule permits an appeal to be dismissed if it is not timely filed, if the basis for the appeal is not discernable, if the petitioner asks to withdraw the request in writing, or for reasons deemed appropriate by the reviewing authority, including, for example, if a petitioner in an appeal acts in bad faith by knowingly withholding evidence from the appropriate reviewing official. FICUs are encouraged to make good-faith efforts to resolve supervisory issues, including those concerning a material supervisory determination, at the most direct level possible, starting with their examiners or program office staff, and as efficiently as possible. If the Director of E&I, the SRC, or the Board, as applicable, finds that a FICU has engaged in bad faith by knowingly withholding evidence from an examiner, the program office, the Director of E&I, the SRC, or the Board, that withholding may serve as a basis for dismissing an appeal.

Under the proposed rule, an appeal at any level would not affect, delay, or impede any formal or informal supervisory or enforcement action in progress, nor would it affect NCUA's authority to take any supervisory or enforcement action against a FICU. Unless otherwise specified in a written decision on appeal, the material supervisory determination would remain in effect until the SRC appeals process has been exhausted.

Likewise, under the proposed rule, an appeal would delay action on a waiver request or an application for additional authority that could be affected by the outcome of the appeal unless the FICU specifically requests that the waiver request or application for additional authority be considered notwithstanding the appeal. Any deadline for a program office to make a determination on a waiver request or application for additional authority set out in any part of NCUA's regulations would be suspended until the FICU has exhausted its administrative remedies under Subpart A or is no longer eligible to pursue an appeal. The purpose of this provision is to avoid situations where a FICU receives an adverse determination on a waiver request or an application for additional authority based on a material supervisory determination, only to have the material supervisory determination subsequently reversed by the SRC. It also prevents a waiver request or an application for additional authority from being automatically denied by operation of other parts of NCUA's regulations.

FICUs are encouraged to resolve supervisory issues with their examiners and other NCUA staff as efficiently as possible without the need to appeal supervisory matters to the SRC. The Board anticipates that most disputes will be handled in that manner. Proposed § 746.105 reflects this policy by requiring a FICU to request reconsideration of a material supervisory determination from the program office that rendered the determination and by establishing procedures that control such a request. The Director of E&I or the SRC would only assume jurisdiction over a material supervisory determination after the FICU has requested reconsideration from the appropriate program office and that program office has had an opportunity to render a decision on that request.

As the Board explained in IRPS 94-2, it is NCUA policy that the SRC should only assume jurisdiction over a material supervisory determination after the FICU establishes that it has been unsuccessful in attempting to resolve the matter with the FICU's examiner or the appropriate program office. Early involvement by the Director of E&I or the SRC would be disruptive to the established organizational structure of NCUA and the relationships between FICUs and NCUA program offices. Therefore, the Board believes that requesting reconsideration from the appropriate program office should continue to be a mandatory part of the process of appealing a material supervisory determination to the SRC.

Nevertheless, to avoid unnecessary delays, a second request for reconsideration will be treated as either a request for review by the Director of E&I or an appeal to the SRC as determined by the Secretary of the Board after consultation with the petitioner. While the reconsideration process promotes greater efficiency by facilitating dispute resolution at the program office level, allowing multiple requests for reconsideration would be inefficient. Upon receiving a second request for reconsideration, the program office will forward that to the Secretary of the Board to be processed as either a request for review pursuant to § 746.106 or an appeal pursuant to § 746.107.

Proposed § 746.106 provides an optional intermediate level of review by the Director of E&I, or his or her designee, before a FICU appeals a material supervisory determination to the SRC. The purpose of this intermediate level of review is to give FICUs another opportunity to resolve supervisory issues and to refine the issues that may be presented to the SRC and the Board on appeal. A request for review by the Director of E&I must be in writing and filed with the Secretary of the Board.

The Board believes that the Director of E&I, or his or her designee, is the appropriate official for these intermediate reviews because E&I is NCUA's central office in charge of examination policy. E&I staff are expert in nearly all examination-related matters. Additionally, E&I is not in the direct line of supervision over any program office, thus avoiding any bias or predisposition to affirm a material supervisory determination by a program office.

Under the proposed rule, the Director of E&I, or his or her designee, will issue a written decision based on written submissions by the FICU and the program office. The Director of E&I, or his or her designee, will have the ability to consult with parties jointly or separately before rendering a decision. Either the FICU or the program office will be able to appeal any adverse decision by the Director of E&I, or his or her designee, to the SRC.

Neither party may make a request for reconsideration of the decision rendered by the Director of E&I, or his or her designee. If a party disagrees with the decision rendered by the Director of E&I, or his or her designee, the next step for further review is to file an appeal to the SRC.

Proposed § 746.107 codifies many of the existing procedures contained in IRPS 11-1, as amended by IRPS 12-1, and expands on them by permitting the SRC Chairman to: (1) Adopt supplemental rules governing its operations; (2) order that material be kept confidential; and (3) consolidate appeals that present similar issues of law or fact. The Board believes that with the expanded jurisdiction of the SRC, additional procedures may be necessary to address operational issues. For example, after some experience with the appeals process, the SRC Chairman may determine that supplemental rules allowing all appeals to be presented through teleconference rather than in person at NCUA headquarters are necessary to ensure that appeals are conducted efficiently and promptly. The proposed rule grants the SRC Chairman the flexibility to adopt such supplemental rules.

In addition, proposed § 746.107 creates an explicit right for a FICU to request that an appeal be conducted entirely based on the written record. As the Board explained in IRPS 95-1, the decision of whether to make a personal appearance should be up to the FICU involved in a particular appeal because FICUs are responsible for all costs associated with a personal appearance. While IRPS 95-1 attempted to save resources of both FICUs and NCUA by permitting the SRC Chairman to work out disputes via teleconference, the Board believes that more can be done to provide enhanced due process. Therefore, the proposed rule explicitly grants FICUs the right to request that an appeal be conducted entirely based on the written record.

The proposed rule also requires the SRC Chairman to notify the Director of E&I of an appeal that involves the interpretation of material supervisory policy or generally accepted accounting principles and solicit input from E&I on how to interpret the policy or accounting principle that applies to the subject matter of the appeal. E&I staff are responsible for setting supervisory policy and interpreting accounting principles for NCUA. Therefore, it is appropriate to require the SRC to solicit input from the Director of E&I and E&I staff on these matters. Furthermore, the proposed rule requires the SRC Chairman to notify the General Counsel and solicit input from the Office of General Counsel on the interpretation of laws, including NCUA regulations, which may apply to the subject matter of an appeal. The Office of General Counsel serves as legal counsel for NCUA and, therefore, consultation with that office on these issues is necessary and proper.19

The proposed rule encourages a FICU to resolve supervisory matters as efficiently as possible by allowing the FICU to request an optional review by the Director of E&I, or his or her designee. Accordingly, for FICUs that have elected to request review by the Director of E&I, or his or her designee, the proposed rule suspends the deadline to file an appeal with the SRC until after the Director of E&I, or his or her designee, has rendered a decision. In practice, this means that a FICU could potentially delay the deadline to file an appeal with the SRC until after the Director of E&I, or his or her designee, has considered the matter. While this could potentially give FICUs additional time to file an appeal with the SRC, the Board believes that the potential benefits of reduced caseloads at the SRC and Board levels exceed any potential risks of delay, especially because material supervisory determinations would remain in place during the pendency of a review by the Director of E&I, or his or her designee. Additionally, during this time, NCUA would not be prohibited from taking supervisory or enforcement actions.

The Board proposes to create a rotating pool of not less than eight individuals appointed by the NCUA Chairman from among NCUA's senior staff in the regional offices, the Office of the Executive Director (OED), the Office of Examination and Insurance (E&I), the Office of National Examination and Supervision (ONES), the Office of Small Credit Union Initiatives (OSCUI), and the Office of Consumer Financial Protection and Access (OCFPA) to serve with the SRC Chairman as a SRC pool from which individual members may be selected by the SRC Chairman to serve as the SRC for a particular appeal.20 Each member of the SRC pool, with the exception of the SRC Chairman, will serve for a one-year term and is eligible to be reappointed for additional terms. A regional director, associate regional director, executive director, deputy executive director, a general counsel, and a senior policy advisor or chief of staff to a Board Member will be ineligible to serve as a member of the SRC pool.

The Secretary of the Board will serve as permanent SRC Chairman and will select three SRC members (one of whom may be the SRC Chairman) from this SRC pool to serve as the SRC for each particular appeal. The Special Counsel will serve as a permanent non-voting member of the SRC to advise the SRC on procedural and legal matters. When selecting SRC members to hear a particular appeal, the SRC Chairman will consider any real or apparent conflicts of interest that may impact the SRC member's objectivity as well as that individual's experience with the subject matter of the appeal. Members of the SRC pool from the program office rendering the material supervisory determination that is the subject of the appeal will be ineligible to serve as SRC members for that appeal. Likewise, E&I staff will be ineligible to serve as SRC members for appeals where the FICU is appealing a determination following a request for review by the Director of E&I.

The Board believes that creating a rotating SRC pool of individuals eligible to serve on the SRC from among NCUA's senior staff in the regional offices, OED, E&I, ONES, OSCUI, and OCFPA is appropriate because these individuals are well-suited to understand supervisory issues and render consistent, well-reasoned decisions. Senior staff from the regional offices, E&I, and ONES are actively engaged in examination-related activities and have in-depth knowledge of current trends in the credit union industry. Likewise, senior staff from OSCUI have specialized knowledge of the needs of small and low-income FICUs. Moreover, senior staff from OCFPA have specialized knowledge of the latest issues in chartering, field of membership, and consumer protection. Each of these program offices brings a unique and diverse set of skills that will greatly benefit the SRC appeals process.

In addition, expanding the number of individuals eligible to serve on the SRC enhances due process by eliminating the potential for conflicts of interest. Having a wider pool from which to draw when selecting SRC members allows the SRC Chairman to avoid conflicts of interest by selecting SRC members without any direct ties to the program office that rendered the material supervisory determination. Moreover, having additional members in the SRC pool means that the Board can expand the jurisdiction of the SRC, while still providing an expeditious process for a FICU to appeal a material supervisory determination.

Nevertheless, the Board continues to believe that regional directors and associate regional directors should not serve in the pool of individuals eligible to serve on the SRC. The Riegle Act mandated NCUA to establish an “independent appellate process,” which it defines as “a review by an agency official who does not directly or indirectly report to the agency official who made the material supervisory determination under review.” 21 This reflects a clear Congressional intent to afford a FICU a separate and meaningful appeal of a material supervisory determination. As the Board explained in IRPS 95-1, allowing regional directors and associate regional directors to serve as members of the SRC pool would place these individuals in the untenable position of potentially reviewing material supervisory determinations made by their colleagues. While the Board does not believe that these individuals would be predisposed to support other regional directors or associate regional directors, the Board wishes to eliminate any perception that the SRC appeals process may be biased against FICUs.

Likewise, the Board continues to believe that the executive director, deputy executive director, policy advisors and chiefs of staff to Board Members should not serve as members of the SRC pool.22 These individuals serve in positions that report to and represent the interests of Board Members. In order to ensure a separate and meaningful final appeal to the Board, these individuals should not serve as members of the SRC pool. Likewise, the Board believes that attorneys from the Office of General Counsel should not serve as members of the SRC pool. These individuals are responsible for providing legal advice to NCUA including the SRC and the Board. In order to prevent any conflicts of interest, these individuals should not serve as members of the SRC pool.

This section of the proposed rule describes the filings that must be made with the Secretary of the Board in order to appeal a decision by the SRC to the Board. It also addresses timing requirements. A request for appeal must include a statement of facts on which the appeal is based, a statement of the petitioner's principal objections to the SRC's decision, and, for FICUs, a certification that the FICU's board of directors has authorized the appeal to be filed. The proposed rule cross references procedures set out in § 746.111 that must be followed to request an oral hearing.

Consistent with IRPS 11-1, as amended by IRPS 12-1, appeals to the Board would not be granted as a matter of right. Rather, at least one Board Member would be required to agree to hear an appeal from a decision by the SRC within 20 calendar days from the date the petitioner first filed the appeal with the Secretary of the Board. The purpose of this provision is to reserve Board review for only those cases involving significant issues of supervisory policy that cannot be addressed at the several lower appellate levels provided by this rule or through a request for reconsideration from the appropriate program office. At this stage, petitioners would have had the opportunity to obtain potentially three levels of review (i.e., reconsideration from the program office, review by the Director of E&I or his or her designee, and appeal to the SRC). Therefore, the Board believes that limiting Board review to only certain matters is not unfairly prejudicial. Furthermore, if a request for an appeal is denied, the decision of the SRC would be treated as a final agency action permitting the petitioner to seek judicial review in federal court under the Administrative Procedure Act (APA).

If a request for an appeal is granted, the Board generally will decide the matter based solely on written submissions by the parties. However, if a request for an appeal is granted with an oral hearing, the Secretary of the Board would notify the parties of the date and time where the appeal shall be heard. As discussed in more detail below, an oral hearing may be either in person (including through counsel) or through video or teleconference.

Within 15 calendar days from the date the Secretary of the Board receives an appeal, the petitioner may amend or supplement the appeal in writing. The respondent would then be permitted 15 calendar days to respond to any supplemental filings.

Under the proposed rule, petitioners are permitted to request an appeal to the Board in all circumstances except denials of TAG reimbursements. As the Board explained in its rulemaking regarding the Community Development Revolving Loan Fund, TAG reimbursements are subject to the discretion of the Director of OSCUI and availability of funds.23 Therefore, such determinations are not subject to administrative appeal to the Board. However, whether a FICU meets the qualifications set forth in a Notice of Funding Opportunity, which is different from whether the FICU should be granted a TAG reimbursement, is subject to administrative appeal to the Board under separate procedures and not through the SRC appeals process.

Proposed § 746.110 sets out the standard procedures followed by the Board upon receipt of a timely appeal. These proposed procedures are, in some respects, a codification of informal practices that the Board currently follows when reviewing other types of appeals that were not heard by the SRC. To date, the Board has only received one appeal of a decision by the SRC.

Proposed paragraph (b) requires the Board to render a written decision stating the reasons for the decision within 90 calendar days, unless extended by the Board, from the date of receipt of an appeal by the Secretary of the Board. Such a decision would constitute a final agency action permitting the petitioner to seek judicial review in federal court under the APA. If the Board does not reach a decision within 90 calendar days, unless otherwise extended, from the date of receipt, then it would be treated as a denial. Building this deadline into the rule ensures that the Board has adequate time to decide a matter on appeal while avoiding any undue prejudice to petitioners from unnecessary delays.

This section of the proposed rule sets out the process for requesting and conducting an oral hearing. The Board recognizes that, in some unusual cases, the opportunity to make an oral presentation in person (or through video or teleconference) is necessary or useful to ensure a thorough understanding of the issues in a case. Therefore, the Board proposes to allow a FICU to make an oral presentation to the Board where at least one Board Member agrees with the petitioner that good cause exists for holding an oral hearing. Individual Board Members must act on such a request within 20 days of receiving a request for an oral hearing.

Paragraph (a) describes the process for requesting an oral hearing. The request must accompany the notice of appeal itself, set out in a separate document titled “Request for Oral Hearing.” The petitioner would be required to show good cause for holding an oral hearing, stating reasons why the case cannot be presented adequately with just written statements. Proposed paragraph (b) specifies that an oral hearing would be scheduled provided at least one Board Member agrees to the oral hearing. The Secretary of the Board would notify the parties of the Board's determination regarding the request for an oral hearing. Proposed paragraph (c) specifies that, in the event the request does not receive the support of at least one Board Member, the appeal will proceed on the basis of written submissions.

At an oral hearing, the petitioner would be permitted to be represented by one or more representatives of its choice (but not more than two without prior approval by the NCUA Chairman). This proposed paragraph recognizes the general right granted in the APA for individuals appearing in person before an agency to be “accompanied, represented, and advised by counsel or, if permitted by the agency, by other qualified representative[s].” 24 In general, courts have found the right to counsel to be a fundamental aspect of procedural due process in both informal and formal agency adjudications.25

Proposed paragraph (d)(3) permits the use of presentations based on written evidence submitted as part of the appeal documents. The submission of written evidence or witness testimony at the oral hearing would not be permitted. The petitioner would be given the opportunity to argue first, followed by a representative of the opposing party.

The Riegle Act required the Board to appoint an official to handle any problems FICUs may have as a result of appealing a material supervisory determination.26 NCUA policy prohibits any retaliation, abuse, or retribution by NCUA personnel against a FICU in this regard. FICUs that believe they are victims of impermissible retaliation would be able to file complaints with the NCUA Office of Inspector General, who will investigate such claims and recommend appropriate action.

In the event that a material supervisory determination becomes the subject of a request for review by the Director of E&I and is the joint product of NCUA and a state supervisory authority (SSA), proposed § 746.113 requires the Director of E&I, or his or her designee, to promptly notify the SSA of the request for review, provide the SSA with a copy of the request and any other related materials, solicit the SSA's views regarding the merits of the request before making a determination, and notify the SSA of the Director's determination.

In the event that an appeal is subsequently filed with the SRC, the SRC is required to notify the SSA of the appeal, provide the SSA with a copy of the appeal and any other related materials, solicit the SSA's views regarding the merits of the appeal before making a determination, and notify the SSA of the SRC's determination. Once the SRC issues a determination, any other issues not addressed by the SRC that may remain between the FICU and the SSA would be left to those parties to resolve. Similar procedures would be followed for appeals to the Board.

The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a regulation may have on a substantial number of small entities (primarily those under $100 million in assets).27 This rule has no economic impact on small credit unions because it only impacts internal NCUA procedures and provides voluntary options for credit unions. Accordingly, NCUA certifies the rule will not have a significant economic impact on a substantial number of small credit unions.

The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in which an agency by rule creates a new paperwork burden on regulated entities or increases an existing burden.28 For purposes of the PRA, a paperwork burden may take the form of a reporting or recordkeeping requirement, both referred to as information collections. Information collected as part of a civil action or administrative action, investigation, or audit, however, is not considered an information collection for purposes of the PRA.

Proposed Subpart A to part 746 establishes procedures for appealing material supervisory determinations to the NCUA Supervisory Review Committee. Because the only paperwork burden in this proposed rule relates to activities that are not considered to be information collections, NCUA has determined that this rule is exempt from the requirements of the PRA.29

NCUA has determined that this rule will not affect family well-being within the meaning of § 654 of the Treasury and General Government Appropriations Act, 1999.30

Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests.31 NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order to adhere to fundamental federalism principles. The rule will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. NCUA has therefore determined that this rule does not constitute a policy that has federalism implications for purposes of the executive order.

For the reasons discussed above, the NCUA Board proposes to add Subpart A to 12 CFR part 746 as follows:

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2017-0511; Directorate Identifier 2016-NM-176-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2016-17R2, dated June 29, 2016 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc. Model CL-600-1A11 (CL-600), CL-600-2A12 (CL-601 Variant), and CL-600-2B16 (CL-601-3A, CL-601-3R, and CL-604 Variants) airplanes. The MCAI states:

Required actions include an inspection to identify the serial number, to serialize, and to record the accumulated life of the side brace fitting shaft of the MLG. The unsafe condition is the loss of structural integrity of the affected part. You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-0511.

We reviewed the following service information. The service information describes the life limits for the side brace fitting shaft and side brace-to-airplane fitting pin of the MLG. The service information is distinct since it applies to different airplane models in different configurations.

• Chapter 5-10-10, Airworthiness Limitations, of the Bombardier Challenger PSP 605 Time Limits/Maintenance Checks, Revision 37, dated April 29, 2016.

• Chapter 5-10-10, Airworthiness Limitations, of the Bombardier Challenger PSP 601-5 Time Limits/Maintenance Checks, Revision 42, dated April 22, 2014.

• Chapter 5-10-10, Airworthiness Limitations, of the Bombardier Challenger PSP 601A-5 Time Limits/Maintenance Checks, Revision 38, dated April 22, 2014.

• Chapter 5-10-10, Airworthiness Limitations, of Part 2, of the Bombardier Challenger CL-604 Time Limits/Maintenance Checks, Revision 26, dated June 9, 2016.

• Chapter 5-10-10, Airworthiness Limitations, of Part 2, of the Bombardier Challenger CL-605 Time Limits/Maintenance Checks, Revision 14, dated June 9, 2016.

We have also reviewed the following service information. The service information describes procedures for an inspection to identify the serial number, to serialize, and to record the accumulated life of the side brace fitting shaft of the MLG. The service bulletins are distinct since they apply to different airplane models.

• Bombardier Service Bulletin 600-0768, dated September 9, 2014.

• Bombardier Service Bulletin 601-0636, Revision 01, dated May 10, 2016.

• Bombardier Service Bulletin 604-57-005, dated September 9, 2014.

• Bombardier Service Bulletin 605-57-003, dated September 9, 2014.

This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

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.

This proposed AD would require revisions to certain operator maintenance documents to include new actions (e.g., inspections). Compliance with these actions is required by 14 CFR 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by this proposed AD, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 91.403(c), the operator must request approval for an alternative method of compliance according to paragraph (k)(1) of this proposed AD. The request should include a description of changes to the required actions that will ensure the continued operational safety of the airplane.

We estimate that this proposed AD affects 133 airplanes of U.S. registry.

We estimate the following costs to comply with this proposed AD:

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

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

We 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.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend Class E airspace at Thomas C Russell Field Airport, Alexander City, AL to ensure the safety and management of IFR operations at the airport.

Interested persons are invited to comment on this rule by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.

Communications should identify both docket numbers and be submitted in triplicate to the address listed above. You may also submit comments through the Internet at http://www.regulations.gov.

Persons wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2016-9549; Airspace Docket No. 17-ASO-5.” The postcard will be date/time stamped and returned to the commenter.

All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the internet at http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's Web page at http://www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined between 8:00 a.m. and 4:30 p.m., Monday through Friday, except federal holidays at the office of the Eastern Service Center, Federal Aviation Administration, Room 350, 1701 Columbia Avenue, College Park, GA 30337.

This document proposes to amend FAA Order 7400.11A, Airspace Designations and Reporting Points, dated August 3, 2016, and effective September 15, 2016. FAA Order 7400.11A is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11A lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is considering an amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 to amend Class E airspace extending upward from 700 feet or more above the surface within a 7.7-mile radius of Thomas C Russell Field Airport, Alexander City, AL. The segment extending from the 7.7-mile radius of the airport to 7 miles south of the Alexander City NDB would be removed due to the decommissioning of the Alexander City NDB and cancellation of the NDB approach, and for continued safety and management of IFR operations at the airport. The geographic coordinates of the airport also would be adjusted to coincide with the FAAs aeronautical database.

Class E airspace designations are published in Paragraph 6005 of FAA Order 7400.11A, dated August 3, 2016, and effective September 15, 2016, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

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

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

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

Authority for This Rulemaking

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

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers (FAA Docket No. FAA-2017-0388 and Airspace Docket No. 17-AGL-13) and be submitted in triplicate to DOT Docket Operations (see ADDRESSES section for address and phone number.) You may also submit comments through the Internet at http://www.regulations.gov.

Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2017-0388/Airspace Docket No. 17-AGL-13.” The postcard will be date/time stamped and returned to the commenter.

All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerning this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the Internet at http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's Web page at http://www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for the address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours at the Federal Aviation Administration, Air Traffic Organization, Central Service Center, Operations Support Group, 10101 Hillwood Parkway, Fort Worth, TX 76177.

This document proposes to amend FAA Order 7400.11A, Airspace Designations and Reporting Points, dated August 3, 2016, and effective September 15, 2016. FAA Order 7400.11A is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11A lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 by modifying Class E airspace extending upward from 700 feet above the surface at Taylor County Airport in Medford WI. The Agency proposes to retain the current Class E airspace within a 6.8-mile radius of the airport and to remove the segment of airspace within 2.7 miles each side of the 162° bearing from the airport extending from the 6.8-mile radius to 7 miles southeast of the airport due to the decommissioning of the Medford NDB and cancellation of the NDB approach.

The agency also proposes to modify the Class E airspace extending upward from 700 feet above the surface at Waupaca Municipal Airport, Waupaca, WI. The agency proposes to retain the current Class E airspace within a 6.4-mile radius of the airport and to remove the segment within 2.7 miles each side of the 118° bearing from the airport, extending from the 6.4-mile radius area to 7 miles southeast of the airport due to the decommissioning of the Waupaca NDB and cancellation of the NDB approach. This proposal would enhance the safety and management of the SIAPs for IFR operations at these airports.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.11A, dated August 3, 2016, and effective September 15, 2016, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

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

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This proposed rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would add Class E airspace extending upward from 700 feet above the surface at Bath Community Hospital Heliport to the existing designation of Class E airspace at Ingalls Field Airport, Hot Springs, VA.

Interested persons are invited to comment on this rule by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.

Communications should identify both docket numbers and be submitted in triplicate to the address listed above. You may also submit comments through the Internet at http://www.regulations.gov.

Persons wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2016-9453; Airspace Docket No. 16-AEA-12.” The postcard will be date/time stamped and returned to the commenter.

All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded from and comments submitted through http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's Web page at http://www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal Holidays. An informal docket may also be examined between 8:00 a.m. and 4:30 p.m., Monday through Friday, except Federal Holidays at the office of the Eastern Service Center, Federal Aviation Administration, Room 350, 1701 Columbia Avenue, College Park, Georgia 30337.

This document proposes to amend FAA Order 7400.11A, Airspace Designations and Reporting Points, dated August 3, 2016, and effective September 15, 2016. FAA Order 7400.11A is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11A lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA proposes to amend Title 14, Code of Federal Regulations (14 CFR) part 71 by adding Class E airspace extending upward from 700 feet above the surface within a 7-mile radius of Bath Community Hospital Heliport to the existing designation of Class E airspace at Ingalls Field Airport, Hot Springs, VA. This action would accommodate new Area Navigation (RNAV) Global Positioning System Standard Instrument Approach Procedures at the heliport. Airspace reconfiguration is necessary for the safety and management of IFR operations at the heliport. The FAA also proposes to update the geographic coordinates of Ingalls Field Airport to coincide with the FAAs aeronautical database.

Class E airspace designations are published in Paragraph 6002, and 6005, respectively of FAA Order 7400.11A, dated August 3, 2016, and effective September 15, 2016, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

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

This proposal would be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

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

I. Public Participation

We encourage you to participate in this rulemaking by submitting comments and related materials. We will consider all comments and material received during the comment period.

If you submit a comment, identify the agency name and the docket ID for this rulemaking, indicate the specific section of this document to which each comment applies, and give the reason for each comment. You may submit your comments and material by electronic means, mail, or delivery to the address under the ADDRESSES section. Please submit your comments and material by only one means.

Regardless of the method used for submitting comments or material, all submissions will be posted, without change, to the Federal e-Rulemaking Portal at http://www.regulations.gov, and will include any personal information you provide. Therefore, submitting this information makes it public. You may wish to read the Privacy and Security Notice that is available via a link on the homepage of www.regulations.gov.

Viewing comments and documents: For access to the docket to read background documents or comments received, go to the Federal e-Rulemaking Portal at http://www.regulations.gov. Background documents and submitted comments may also be inspected at FEMA, Office of Chief Counsel, 500 C Street SW., Washington, DC 20472-3100.

FEMA established its regulations regarding its rulemaking procedures in 1981, in 44 Code of Federal Regulations (CFR) part 1.1 FEMA has not substantively updated part 1 since that time. Part 1 is based on a rescinded Executive Order, Executive Order 12291, entitled “Federal Regulation,” and obsolete agency procedure, which was relevant when FEMA was an independent agency,2 but is no longer accurate, as FEMA is no longer an independent agency. FEMA now includes its internal rulemaking procedures addressing the development, drafting, and clearance of FEMA rules in internal guidance.

In this proposed rule, FEMA proposes a wholesale revision of part 1, removing sections that solely address internal agency procedure, and retaining and updating sections that directly affect the public's participation in FEMA's rulemaking process, namely, provisions addressing ex parte communications in rulemaking, petitions for rulemaking, the public rulemaking docket, hearings, and the process for submitting public comments on rules.

FEMA is also proposing to modify its waiver of the Administrative Procedure Act exemption for matters relating to public property, loans, grants, benefits, and contracts.

Section III of this preamble includes a section-by-section analysis of the current regulations and an explanation of the changes to each section.

Paragraph (a) of current section 1.1 states that 44 CFR part 1 covers FEMA's basic policies and procedures for adoption of rules, and that it incorporates provisions of section 4 of the Administrative Procedure Act. Section 4 of the Administrative Procedure Act (5 U.S.C. 553) addresses Federal agency requirements for notice and comment rulemaking. Notice and comment rulemaking is also known as “informal rulemaking.” Paragraph (a) of current section 1.1 also includes a statement that 44 CFR part 1 and internal FEMA manuals implement Executive Order 12291.

FEMA proposes to limit the purpose of part 1 to describing FEMA's informal rulemaking procedures that affect the public. This proposed rule therefore does not describe FEMA's internal rulemaking procedures, which are more appropriately placed in internal guidance. FEMA proposes these changes for a number of reasons. First, the Administrative Procedure Act does not require internal agency procedure to be in regulation. See 5 U.S.C. 553(a)(2), 553(b)(A). Second, and more importantly, the references to Executive Order 12291 and implementing FEMA procedures are outdated. As noted above, Executive Order 12291 has been revoked, and was replaced with Executive Order 12866, “Regulatory Planning and Review.” 3 Executive Order 12866 imposed major changes to the regulatory review process of the Federal government, such as establishing a definition of “significant” rulemakings and requiring a 90-day review by the Office of Management and Budget (OMB) of those rulemakings.

Thus, FEMA proposes to state in paragraph (a) of proposed section 1.1 simply that part 1 contains FEMA's informal rulemaking procedures that affect the public. Note that FEMA does not currently address formal rulemaking in its regulations,4 and does not propose to do so, as FEMA has never engaged in formal rulemaking and has no plans to do so. If the need or opportunity for a formal rulemaking should arise, FEMA will consider issuing regulations or guidance regarding formal rulemaking procedures at that time.

The Freedom of Information Act (FOIA), located in section 3(a) of the Administrative Procedure Act, requires certain agency documents to be published in the Federal Register for the guidance of the public. See 5 U.S.C. 552(a). Paragraph (b) of current section 1.1 states that FEMA's implementation of this requirement is contained in 44 CFR part 5, subpart B, but subpart B was removed when the Department of Homeland Security (DHS) updated its FOIA regulations, which also apply to FEMA. See 81 FR 83625 (Nov. 22, 2016). FEMA finds that this cross-reference to subpart B is outdated, not necessary, and potentially confusing. Accordingly, FEMA proposes to remove it from part 1.

Paragraph (c) of current section 1.1 states that 44 CFR part 1 “contains policies and procedures for implementation of the Regulatory Flexibility Act which took effect January 1, 1981.” In this rulemaking, FEMA is proposing to remove all provisions from part 1 that address the requirements of the Regulatory Flexibility Act, as these provisions are not required to be in regulation. The requirements of the Regulatory Flexibility Act pertain to an agency's responsibilities in performing a particular kind of analysis of its rulemakings, and do not include any requirements on the public. Therefore, FEMA proposes to remove paragraph (c) from current section 1.1.

Paragraphs (d) and (e) of current section 1.1 refer to a rescinded FEMA manual that described the agency's internal rulemaking procedures.5 As the manual has since been rescinded, and there is no requirement to include references to such internal guidance in regulations, FEMA proposes to remove reference to such guidance in 44 CFR part 1.

Section 1.2 includes the definition of “rule or regulation,” which is the same definition that appears in the Administrative Procedure Act at 5 U.S.C. 551(4). Rather than restating the definition, FEMA proposes to simply provide the reference to the APA definition, for the sake of simplicity and to avoid the possible impression that FEMA's definition differs from the Administrative Procedure Act definition.

FEMA proposes to remove the definition of “major rule.” This is a term found in rescinded Executive Order 12291, and the Congressional Review of Agency Rulemaking Act (CRA), and the definition need not be parroted in regulation.6 FEMA is therefore proposing to remove this definition from 44 CFR part 1.

FEMA does not propose any changes to the definitions of “rulemaking,” “Administrator,” or “FEMA.”

FEMA proposes to remove paragraph (a) of this section, because it is redundant of proposed section 1.1, addressing the scope of part 1.

FEMA proposes to remove paragraph (b) of this section, because it is not required to be in regulation. Paragraph (b) states that any delegation by the Administrator of authority to issue rules may not be further redelegated, unless expressly provided for in the delegation. Delegations are an internal agency matter, and are within the discretion of the FEMA Administrator whether to allow one of his functions to be delegable. FEMA currently has an internal delegation addressing rulemaking, FDA 0106-5 (included in the docket for this rulemaking at www.regulations.gov) which provides for FEMA rulemakings to be issued by either the Administrator or the Deputy Administrator of FEMA. It also provides for certain “routine and frequent” rulemakings regarding the National Flood Insurance Program to be issued by the Associate Administrator for Federal Insurance and Mitigation, or, if vacant, the Deputy Associate Administrator for Federal Insurance and Mitigation.

FEMA proposes to move paragraph (c) of current section 1.3 to proposed section 1.1. This paragraph explains that 44 CFR part 1 does not address formal rulemaking procedures under the Administrative Procedure Act. If the need or opportunity arises to engage in a formal rulemaking, FEMA may issue relevant regulations or guidance at that time as necessary and appropriate.

FEMA proposes to remove paragraph 1.4(a), as it is based on a rescinded Executive Order, Executive Order 12291. It is not necessary to implement the provisions of such executive orders in regulation.

Current paragraph 1.4(b) states that it is FEMA's policy to provide for public participation in rulemaking regarding its programs and functions, including for matters that relate to public property, loans, grants, benefits, or contracts. FEMA declared this policy notwithstanding that the Administrative Procedure Act's notice-and-comment rulemaking requirements do not apply to such programs and functions. See 5 U.S.C. 553(a)(2). In 1971, the Administrative Conference of the United States (ACUS) issued a recommendation which recommended that all Federal agencies waive the Administrative Procedure Act exemption, finding that the public interest in participating in these matters outweighed the added process required by notice and comment rulemaking.7 When FEMA issued part 1 in 1981, it adopted this recommendation.

One of FEMA's main functions is to administer grant programs for emergency preparedness, response, recovery, and mitigation. The majority of these grant programs are annual grant programs, meaning Congress on an annual basis (1) appropriates a certain amount of money for the program, and (2) potentially revises requirements associated with the program. FEMA annually evaluates available resources and policy priorities, and issues notices of funding opportunity, i.e., calls for grant applications which specify the eligibility requirements and conditions for the grant. If in a given year Congress has not appropriated funds for a given annual grant program, FEMA will not issue a notice of funding opportunity or make any awards for that program.

Because of the uncertainties associated with these programs and the time and resource constraints associated with the rulemaking process, it would be extremely challenging to promulgate or revise regulations each year for these annual grant programs, and therefore FEMA's practice for years has been to post a notice of funding opportunity on its Web site at https://www.fema.gov/grants when grant funds become available. These notices provide detailed information on grant eligibility and conditions, consistent with OMB requirements.8 FEMA finds that regulations are not necessary for these annual grant programs, because the requirements for the grant are included in legislation and the notices of funding opportunity which are available to the public on FEMA's Web site and www.grants.gov. 9

FEMA notes that in the 1971 ACUS recommendation, ACUS cited the inadequate practice of some agencies at that time of notifying applicants of available grant funds and actions taken on applications. However, it is now standard practice for Federal agencies to use the internet to disseminate information to the public. FEMA's use of its Web site and www.grants.gov for its annual grant programs allows any member of the public easy access to grant application information, and inadequate notice is no longer an issue.

Because it would be unduly burdensome and, in some cases, impossible to promulgate annual grant program requirements in regulation, because the APA does not require such (or any) grant program requirements to be in regulation, and because FEMA requires flexibility to adapt quickly to legal and policy mandates, FEMA considered eliminating current paragraph 1.4(b) entirely. At this time, however, FEMA prefers to retain a statement in support of public participation in rulemaking, because although FEMA sees little reason to retain current paragraph 1.4(b) as drafted, FEMA continues to believe that public participation is frequently beneficial to the rulemaking process, particularly for its non-annual disaster grant programs. Accordingly, FEMA proposes to modify its part 1 with respect to the grants exception. Specifically, under this proposed rule (proposed section 1.3), FEMA would retain its general policy in favor of public participation, but would retain discretion to depart from this policy in its discretion and as circumstances warrant, such as with respect to annual grant programs. FEMA also proposes to include a provision stating that its general policy of providing for public participation in rulemaking is not intended to create a right or benefit, substantive or procedural, enforceable against the United States.

FEMA proposes to remove paragraph (c) from current section 1.4, as it merely echoes the requirement of the Administrative Procedure Act at 5 U.S.C. 553 to publish notices of proposed rulemaking in the Federal Register and to give the public an opportunity to participate in the rulemaking through submission of written data, views, and arguments, with or without opportunity for oral presentation.

FEMA proposes to remove paragraph (d) from current section 1.4, which describes FEMA's policy of giving the public, including small entities and consumer groups, an early and meaningful opportunity to participate in the development of rules such as through advance notices of proposed rulemakings, holding open conferences, and convening public forums or panels. Such a policy need not be in regulation.

FEMA proposes to remove paragraph (e) from current section 1.4, which contains FEMA's policy to hold a 60-day public comment period for notices of proposed rulemaking. This policy is consistent with the time period recommended by Executive Order 12866. Paragraph (e) also states that the comment period will include any period of review required by OMB in accordance with the Paperwork Reduction Act of 1980. Such a policy need not be in regulation.

Paragraph (f) of current section 1.4 addresses Administrative Procedure Act provisions that allow an agency to bypass notice and comment. FEMA proposes to remove paragraph (f) from current section 1.4.

Paragraph (g) of current section 1.4 addresses the delayed effective date provision of the Administrative Procedure Act. Under this provision, a substantive rule generally becomes effective no earlier than 30 calendar days after the date of publication in the Federal Register, unless the agency provides an explanation in the preamble to the rule that it has good cause to make the rule effective immediately upon the date of publication. FEMA proposes to remove this provision from current section 1.4.

Paragraph (h) of current section 1.4 addresses publication of rules in emergency situations. It states that part 1 does not apply to such situations, and any such regulation will be reported to OMB. It states that as soon as is practicable, FEMA will publish in the Federal Register a statement of the reasons why it is impracticable for the agency to follow the procedures of Executive Order 12866, and the agency shall prepare and transmit, as needed, and as soon as practicable, a regulatory impact analysis for the rule. FEMA proposes to remove this paragraph from section 1.4, because it predates the termination of FEMA's status as an independent agency, and addresses a matter of internal U.S. government coordination.

Section 1.5 addresses the public rules docket. FEMA proposes to renumber this section as section 1.4. FEMA proposes to slightly revise this section, to clarify that the public rulemaking docket is available for public inspection after a rule document has been published in the Federal Register. This is the point when a public rulemaking docket is established. Prior to that point, any documents associated with the rulemaking are part of the internal development process, and are not included in the public docket. FEMA also proposes to clarify that the public docket is available in hard copy until the rule project is closed. Once a rule project is closed (either because the rule has been finalized or withdrawn), FEMA archives the docket at the National Archives and Records Administration, due to limited physical space at FEMA offices. An electronic copy of the docket would still be available on www.regulations.gov, however, with the exception of any copyrighted material that might be associated with the rule project.

FEMA also proposes to add a requirement that any member of the public wishing to physically inspect the public docket do so by prearrangement with FEMA. FEMA has consolidated its office space and no longer maintains a separate reading room for rule dockets. Therefore, it is necessary for FEMA to reserve a space ahead of time for a member of the public to inspect the public docket. FEMA proposes to remove the requirement that a member of the public must pay a fee to obtain a copy of the public docket.

FEMA proposes to move the provision addressing the submission of public comments to a separate section, as it is not directly related to inspection of the public docket (although public comments are included in the docket itself). The new section addressing submission of public comments would be numbered section 1.5, and addresses submission of comments electronically to www.regulations.gov as well as submission via mail or courier to FEMA.

Finally, FEMA proposes to add a section to address the public dockets for flood hazard elevation rules. The physical repository addresses for supporting material for those rules vary depend on the locality that is the subject of the rule. FEMA includes the address in the preamble to each flood hazard elevation rule.

Section 1.6 addresses ex parte communications during the rulemaking process. FEMA proposes to revise this section to cover written as well as oral communications, and to cover any such communications from outside the Federal Executive branch, rather than outside FEMA. There are various communications necessary outside FEMA but within the Federal Executive branch during the rulemaking process, such as with DHS, OMB, or other Federal agencies, as part of internal government review, to ensure consistency in Federal government policy, and to consult with other agencies with expertise in the subject of the rule or that may be affected by the rule. These communications are considered “internal” as they are contained within the Federal Executive branch. The disclosure requirements of this section are not intended to apply to such internal communications.

FEMA proposes to revise this section to cover communications from the time a notice of proposed rulemaking is published until FEMA issues a final regulatory action (such as a withdrawal of the notice of proposed rulemaking or a final rule). Under the current regulation, communication is only restricted during the open public comment period, which tends to defeat the purpose of transparency in development of the regulatory action, since once the comment period closes, ex parte communications can occur while the next regulatory action is being developed. To ensure transparency for the entire development of the rule from publication of the notice of proposed rulemaking until issuance of a final action, FEMA proposes to revise the applicability of its ex parte regulation to also cover the time between the close of a proposed rule comment period and the issuance of a final action.

FEMA proposes to remove the introductory language of this section, which states that the section applies to rulemaking proceedings governed by the procedural requirements of 5 U.S.C. 553 (i.e., informal rulemaking). The purpose section of part 1 already limits the scope of part 1 to informal rulemaking so this introductory language to section 1.6 is unnecessary.

FEMA proposes to add a provision noting that the ex parte restrictions do not apply to Tribal consultations. Executive Order 13175, Consultation and Coordination with Indian Tribal Governments,10 and Presidential Memorandum of November 9, 2009, Tribal Consultation,11 require Federal agencies to consult with Tribes on actions that have Tribal implications. In order to facilitate and support these communications, FEMA encourages Tribal consultation early in the rule development process and does not impose ex parte restrictions on such consultations.

Section 1.7 contains outdated requirements that were part of the now-rescinded Executive Order 12291 regarding the government-wide regulations agenda. Current Executive Order 12866 also contains requirements that agencies must follow for the regulations agenda, as does the Regulatory Flexibility Act. FEMA proposes to remove these requirements, as OMB publishes the agenda on its Web site, which any member of the public may view at www.reginfo.gov, and because of Executive Order 12291's rescission.

Section 1.8 describes FEMA's intent to publish in the Federal Register, and keep updated, a plan for periodic review of existing rules at least within 10 years from the date of publication of a final rule. FEMA proposes to remove this section from part 1, as the process for review of existing rules has changed. President Trump recently issued Executive Order 13777, “Enforcing the Regulatory Reform Agenda,” which outlines specific requirements related to retrospective review.12 And past executive orders, such as Executive Order 13563, “Improving Regulation and Regulatory Review,” include certain retrospective review requirements as well.13 FEMA has actively participated in such reviews, and will continue to do so.

Section 1.9 lists the regulatory impact analysis requirements that were part of the now-rescinded Executive Order 12291. These requirements have been replaced by a series of executive orders and OMB Circular A-4, “Regulatory Analysis.” A copy of the circular is included in the docket for this rulemaking. FEMA must follow these guidelines when preparing a regulatory impact analysis for its rules. As these guidelines apply to the agency rather than the public, it is not necessary to include them in the CFR. Therefore, FEMA proposes to remove section 1.9 from its regulations rather than updating it with the new guidelines.

This section addresses the process for initiating a rulemaking at FEMA, both internally by the Administrator of FEMA and externally via a petition for rulemaking. FEMA's process for initiating a rule is an internal agency matter, and the ultimate authority for initiating a rule resides with the Administrator. Thus, FEMA proposes to remove reference to the internal process for initiating a rule from its regulations. Initiation of a rule via a petition for rulemaking is addressed in a separate section (current section 1.18, which is renumbered as section 1.8 in this proposed rule). Therefore, as petitions for rulemaking are fully addressed in a separate section, FEMA proposes to remove section 1.10 in its entirety from the regulations.

Section 1.11 lists the requirements for the contents of an advance notice of proposed rulemaking (ANPRM), a regulatory action that typically takes place to gather information for a possible future notice of proposed rulemaking. These ANPRM requirements are part of FEMA's internal procedures and controls for its regulatory actions; FEMA proposes to remove them from the CFR.

Section 1.12 lists the requirements for the contents of a notice of proposed rulemaking, a regulatory action that notifies the public of various information, including but not limited to, the substance or terms of the proposed rule or a description of the subject matter and issues involved and a reference to the legal authority under which the proposed rule is issued. These elements are already required by statute; FEMA, therefore, proposes to remove them from the CFR.

Section 1.12 also states that it is desirable that the proposed rule contain a target deadline for issuance of the regulation, and that to the extent feasible, this deadline be met. FEMA proposes to remove this provision because such a target, announced in a proposed rule, would too frequently be unduly speculative. For instance, FEMA does not presume that each proposed rule will result in a final rule.

The final provision of section 1.12 states that if the proposed rule is one which contains a requirement for a collection of information, a copy of the rule will be furnished to OMB in accordance with the Paperwork Reduction Act. Under internal Federal government procedure, FEMA is required to submit all information collections, whether included with a rule or not, to OMB, via DHS. A regulation is not necessary for this function, and therefore FEMA proposes to remove it from the CFR.

Section 1.13 states that any interested person may participate in rulemaking proceedings by submitting written data, views, or arguments within the comment time stated in the notice. This is a requirement of the Administrative Procedure Act and FEMA includes it in all of its rulemaking notices for proposed rules and advance notices of proposed rulemakings. As it is not necessary to include in regulation, FEMA proposes to remove it from the CFR.

Section 1.13 includes a provision stating that the Administrator may permit the filing of comments in response to original comments. FEMA proposes to remove this provision because it is unnecessary to include in the CFR.

Section 1.13 also states that the Administrator may provide for oral presentation of views in additional proceedings; this is also addressed in section 1.14. FEMA proposes to remove these provisions from the CFR. FEMA's policy for providing for public hearings is addressed in FEMA's notices of proposed rulemaking.

The last provision of section 1.13 states that FEMA will send copies of regulatory flexibility analyses to the Chief Counsel for Advocacy of the Small Business Administration. As this provision is regarding internal agency procedure and does not affect the public, FEMA proposes to remove it from the regulation.

Section 1.14 states that the Administrator may invite interested persons to present oral arguments, appear at informal hearings, or participate in any other procedure affording opportunity for oral presentation of views. FEMA's current policy is to include in each notice of proposed rulemaking, as appropriate, a statement noting that any member of the public may submit a request for a public meeting. If a hearing is held, FEMA will publish notice of such in the Federal Register. This provision is not necessary to include in the CFR. Therefore, FEMA proposes to remove it.

FEMA proposes to retain the provision indicating that FEMA will keep a transcript or minutes of any hearing, but proposes to move it to the section on hearings (currently section 1.15; renumbered as section 1.7 in the proposed rule). Note that FEMA considers any oral presentation a hearing; any oral presentation would fall under the provision addressing hearings (discussed below).

Section 1.15 addresses the nature of public hearings should FEMA hold one for a particular rulemaking. Any such public hearing is nonadversarial and for fact-finding only. FEMA proposes to remove the provision stating that formal rulemaking hearing procedures do not apply, since section 1.1 already limits the scope of part 1 to informal rulemaking.

Section 1.16 addresses FEMA's procedure for issuing a final rule. Paragraph (a) states that FEMA must address any relevant significant issues set forth in comments received on the proposed rule. Paragraph (a) also requires the final rule to include a clear concise statement of the basis and purpose of the rule. These are Administrative Procedure Act requirements placed on agencies rather than the public and therefore FEMA proposes to remove these from the regulation.

Paragraph (b) lists other information that FEMA may include in a final rule preamble. The information is similar to information covered by Administrative Committee of the Federal Register regulations at 1 CFR 18.12. There is no need to reiterate this list in FEMA's regulations. Therefore FEMA proposes to remove paragraph (b) from part 1.

Paragraph (c) states that a statement shall be published at the time of publication of a final rule describing how the public may obtain copies of the final regulatory flexibility analysis. FEMA proposes to remove this provision because it is not necessary; FEMA automatically posts such analyses on www.regulations.gov for public viewing.

Paragraph (d)(1) states that before approving any final major rule, FEMA will make a determination that the regulation is clearly within the authority delegated by law and consistent with congressional intent and include in the Federal Register at the time of promulgation a memorandum of law supporting that determination. FEMA proposes to remove this provision because it no longer reflects FEMA practice. FEMA includes the legal authority for the rule in the rulemaking document, and this is also a requirement of the Federal Register (each rulemaking must include an “authority citation”). Although FEMA internally makes a legal determination that the regulation is within FEMA's legal authorities, FEMA does not include in the Federal Register a memorandum of law supporting that determination.

Paragraph (d)(2) states that FEMA must make a determination that the factual conclusions upon which the rule is based have substantial support in the agency record, viewed as a whole, with full attention to public comments in general and the comments of persons directly affected by the rule in particular. FEMA proposes to remove this provision.

Section 1.17 states that FEMA will not consider petitions for reconsideration of a final rule, and that such petitions will be treated as petitions for rulemaking. This remains FEMA's policy, and FEMA proposes no revisions to this section, other than to revise the reference to section 1.18, which would become section 1.9 if this proposed rule is finalized.

Section 1.18 addresses petitions for rulemaking. It states that any interested person may petition the Administrator for the issuance, amendment, or repeal of a rule, and for purposes of this section, the term “person” includes a “Federal, State, or local government or government agency.” FEMA proposes to revise the definition of “person” to include “any member of the public and any entity outside the Federal Executive branch.” FEMA considers any “petitions” from entities of the Federal Executive branch as internal to the government and not subject to the same requirements as petitions from the public. There is communication amongst Federal Executive branch agencies on a regular basis and any need for a rule would be raised through those channels. This is not a change from the current intent of this section, but FEMA is proposing this new language for the sake of clarity.

This section states that petitions should be submitted to the “Rules Docket Clerk.” As FEMA no longer has a “Rules Docket Clerk,” FEMA proposes to change this to the “Regulatory Affairs Division,” which is the division responsible for processing any petitions to FEMA for rulemaking. FEMA also proposes to require that petitions for rulemaking be labeled as such, to avoid situations where simple correspondence is confused with a petition.

FEMA proposes to revise the authority citation for part 1 by removing the reference to rescinded Executive Order 12291, as well as the references to the Reorganization Plan No. 3 of 1978, Executive Order 12127, and Executive Order 12148. The Reorganization Plan and Executive Orders 12127 and 12148 established FEMA as an agency in 1979 and established its functions. FEMA proposes to replace these cites with a citation to the Homeland Security Act of 2002, 6 U.S.C. 101 et seq., which provided organic authority for FEMA and made it a component of the Department of Homeland Security, and Department of Homeland Security Delegation 9001.1, which delegated specific functions back to FEMA.

FEMA also proposes to remove the citation to the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) because references to that Act would no longer be included in part 1 if the proposed rule is finalized.

FEMA proposes to retain the citations to the informal rulemaking provisions of the Administrative Procedure Act (5 U.S.C. 551 and 553) as these are the main authorities for this part.

The following chart lists the current section and how it is affected by the proposed rule:

Executive Orders 12866 (“Regulatory Planning and Review”) and 13563 (“Improving Regulation and Regulatory Review”) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”) directs agencies to reduce regulation and control regulatory costs and provides that “for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.”

The Office of Management and Budget (OMB) has not designated this rule a significant regulatory action under section 3(f) of Executive Order 12866. Accordingly, OMB has not reviewed it. As this rule is not a significant regulatory action, this rule is exempt from the requirements of Executive Order 13771. See OMB's Memorandum “Guidance Implementing Executive Order 13771, Titled `Reducing Regulation and Controlling Regulatory Costs' ” (April 5, 2017).

This proposed rule would revise FEMA regulations pertaining to rulemaking by removing sections that are outdated or do not affect the public and update provisions that affect the public's participation in the rulemaking process. FEMA does not believe this rule imposes additional direct costs on the public or government.

Under the Regulatory Flexibility Act (RFA), as amended, 5 U.S.C. 601-612, agencies must consider the impact of their rulemakings on “small entities” (small businesses, small organizations and local governments). When the Administrative Procedure Act requires an agency to publish a notice of proposed rulemaking under 5 U.S.C. 553, the RFA requires a regulatory flexibility analysis for both the proposed rule and the final rule if the rulemaking could “have a significant economic impact on a substantial number of small entities.” The RFA also provides that in lieu of a regulatory flexibility analysis, the agency may certify in the rulemaking document that the rulemaking will not “have a significant economic impact on a substantial number of small entities” along with a statement providing the factual basis for such certification. FEMA has voluntarily published a notice of proposed rulemaking in this case, notwithstanding that this rule is a rule of agency organization, procedure, or practice exempt from notice-and-comment rulemaking requirements. See 5 U.S.C. 553(b)(A).

This proposed rule would revise FEMA regulations pertaining to rulemaking by removing sections that are outdated or do not affect the public and update provisions that affect the public's participation in the rulemaking process. This rule does not impose direct costs on small entities. Accordingly, and although FEMA is not required to make such certification, pursuant to section 605(b) of the RFA, 5 U.S.C. 605(b), the Administrator of FEMA certifies that this rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 658, 1501-1504, 1531-1536, 1571, pertains to any notice of proposed rulemaking which implements any rule that includes a Federal mandate 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 in any one year. If the rulemaking includes a Federal mandate, the Act requires an agency to prepare an assessment of the anticipated costs and benefits of the Federal mandate. The Act also pertains to any regulatory requirements that might significantly or uniquely affect small governments. Before establishing any such requirements, an agency must develop a plan allowing for input from the affected governments regarding the requirements.

FEMA has determined that this rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, nor by the private sector, of $100,000,000 or more in any one year as a result of a Federal mandate, and it will not significantly or uniquely affect small governments. Therefore, no actions are deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

Under the Paperwork Reduction Act of 1995 (PRA), as amended, 44 U.S.C. 3501-3520, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the agency obtains approval from OMB for the collection and the collection displays a valid OMB control number. See 44 U.S.C. 3506, 3507. FEMA has determined that this rulemaking does not contain any collections of information as defined by that Act. PRA regulations exempt general solicitations of comments from the public such as rulemakings. See 5 CFR 1320.3(h)(4).

Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must determine whether implementation of a proposed regulation will result in a system of records. A “record” is any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, his/her education, financial transactions, medical history, and criminal or employment history and that contains his/her name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph. See 5 U.S.C. 552a(a)(4). A “system of records” is a group of records under the control of an agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual. An agency cannot disclose any record which is contained in a system of records except by following specific procedures.

The E-Government Act of 2002, 44 U.S.C. 3501 note, also requires specific procedures when an agency takes action to develop or procure information technology that collects, maintains, or disseminates information that is in an identifiable form. This Act also applies when an agency initiates a new collection of information that will be collected, maintained, or disseminated using information technology if it includes any information in an identifiable form permitting the physical or online contacting of a specific individual.

This proposed rule does not create a new, nor impact a current, system of record. Therefore, this proposed rule does not require coverage under an existing or new Privacy Impact Assessment or System of Records Notice. Any member of the public or any non-Federal entity may submit comments on a rulemaking; all comments are posted on www.regulations.gov, and that Web site, as well as each FEMA rulemaking document requesting comments, includes a Privacy Notice informing the commenter that any comments will be posted for public viewing.

Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments,” 65 FR 67249, November 9, 2000, applies to agency regulations that have Tribal implications, that is, regulations that have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Under this Executive Order, to the extent practicable and permitted by law, no agency shall promulgate any regulation that has Tribal implications, that imposes substantial direct compliance costs on Indian Tribal governments, and that is not required by statute, unless funds necessary to pay the direct costs incurred by the Indian Tribal government or the Tribe in complying with the regulation are provided by the Federal Government, or the agency consults with Tribal officials.

This rule does not have Tribal implications. Any member of the public and any non-Federal entity, including Tribes and Tribal members, may participate in Federal rulemaking as outlined in this proposed rule, and it is FEMA's policy that ex parte restrictions in rulemaking do not apply to Tribal consultations.

Executive Order 13132, “Federalism,” 64 FR 43255, August 10, 1999, sets forth principles and criteria that agencies must adhere to in formulating and implementing policies that have federalism implications, that is, regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Federal agencies must closely examine the statutory authority supporting any action that would limit the policymaking discretion of the States, and to the extent practicable, must consult with State and local officials before implementing any such action.

FEMA has reviewed this proposed rule under Executive Order 13132 and has determined that this rule does 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, and therefore does not have federalism implications as defined by the Executive Order. It addresses agency procedures for rulemaking that affect the public; such rulemaking is a Federal process and does not affect State rulemaking processes.

Under the Congressional Review of Agency Rulemaking Act (CRA), 5 U.S.C. 801-808, before a rule can take effect, the Federal agency promulgating the rule must submit to Congress and to the Government Accountability Office (GAO) a copy of the rule; a concise general statement relating to the rule, including whether it is a major rule; the proposed effective date of the rule; a copy of any cost-benefit analysis; descriptions of the agency's actions under the Regulatory Flexibility Act and the Unfunded Mandates Reform Act; and any other information or statements required by relevant executive orders.

FEMA will send this rule to the Congress and to GAO pursuant to the CRA if the rule is finalized. The rule is not a “major rule” within the meaning of the CRA. It will not have an annual effect on the economy of $100,000,000 or more; it will not result in a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and it will not have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.

Background

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., requires that Federal agencies including NMFS take into account how their regulations affect “small entities,” including small businesses, small Governmental jurisdictions, and small organizations. Under the RFA, we must either prepare a Regulatory Flexibility Analysis or certify that the regulation, if put in place, will not have a significant economic impact on a substantial number of small entities for any regulation proposed after January 1, 1981. Section 602 of the RFA requires that NMFS issue an Agenda of Regulations identifying rules under development that are likely to have a significant economic impact on a substantial number of small entities.

Section 610 of the RFA requires Federal agencies to review existing regulations. It requires that NMFS publish a plan in the Federal Register explaining how it will review its existing regulations which have or will have a significant economic impact on a substantial number of small entities. Regulations that became effective after January 1, 1981, must be reviewed within 10 years of the publication date of the final rule. Section 610(c) requires that we annually publish a list of final rules we will review during the succeeding 12 months in the Federal Register. The list must describe, explain the need for, and provide the legal basis for the rules being reviewed, as well as invite public comment on the rule.

In addition, information compiled through this routine action under Section 610 of the RFA will be relevant to the regulatory reviews required under Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs,” and Executive Order 13777, “Enforcing the Regulatory Reform Agenda.”

The purpose of the review is to determine whether existing rules should be left unchanged, or whether they should be revised or rescinded to minimize significant economic impacts on a substantial number of small entities, consistent with the objectives of other applicable statutes. In deciding whether change is necessary, the RFA establishes five factors that NMFS must consider:

(1) Whether the rule is still needed;

(2) What type of complaints or comments were received concerning the rule from the public;

(3) The complexity of the rule;

(4) How much the rule overlaps, duplicates or conflicts with other Federal rules, and, to the extent feasible, with State and local governmental rules; and

(5) How long it has been since the rule has been evaluated or how much the technology, economic conditions, or other factors have changed in the area affected by the rule.

Below is the list of rules and their summaries issued in 2010 that we will review by December 31, 2017, consistent with RFA Section 610. This list includes rules issues in 2010 for which initial and final regulatory flexibility analyses were completed.

1. Pacific Halibut Fisheries; Limited Access for Guided Sport Charter. RIN 0648-AW92 (75 FR 553; January 5, 2010). NMFS issued regulations creating a limited access system for charter vessels in the guided sport fishery for Pacific halibut in waters of International Pacific Halibut Commission Regulatory Areas 2C (Southeast Alaska) and 3A (Central Gulf of Alaska). This limited access system limited the number of charter vessels that may participate in the guided sport fishery for halibut in these areas. NMFS issued a charter halibut permit to a licensed charter fishing business owner based on his or her past participation in the charter halibut fishery and to a Community Quota Entity representing specific rural communities. All charter halibut permit holders were subject to limits on the number of permits they may hold and on the number of charter vessel anglers who may catch and retain halibut on permitted charter vessels. This action was necessary to achieve the approved halibut fishery management goals of the North Pacific Fishery Management Council. The intended effect was to curtail growth of fishing capacity in the guided sport fishery for halibut. This action was conducted by NMFS under authority of the Northern Pacific Halibut Act of 1982.

2. International Fisheries; Western and Central Pacific Fisheries for Highly Migratory Species; Initial Implementation of the Western and Central Pacific Fisheries Convention. RIN 0648-AV63 (75 FR 3335; January 21, 2010). NMFS issued regulations under authority of the Western and Central Pacific Fisheries Convention Implementation Act, which authorized the Secretary of Commerce to promulgate regulations needed to carry out the obligations of the U.S. under the Convention on the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean, including implementing the decisions of the Commission for the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean. The regulations included requirements related to permitting, vessel monitoring systems, vessel observers, vessel markings, reporting and recordkeeping, at-sea transshipment, and boarding and inspection on the high seas, among others. NMFS has determined that this action was necessary for the United States to satisfy its international obligations under the Convention, to which it is a Contracting Party. It has the effect of requiring that all relevant U.S. fishing vessels were operated in conformance with the provisions of the Convention.

3. Taking of Marine Mammals Incidental to Commercial Fishing Operations; Harbor Porpoise Take Reduction Plan Regulations. RIN 0648-AW51 (75 FR 7383; February 19, 2010). NMFS issued this final rule to amend the regulations implementing the Harbor Porpoise Take Reduction Plan to address the increased incidental mortality and serious injury of the Gulf of Maine/Bay of Fundy stock of harbor porpoises (Phocoena phocoena) in gillnet fisheries throughout the stock's U.S. range. This action was conducted by NMFS under the authority of the Marine Mammal Protection Act.

4. Fisheries of the Northeastern United States; Atlantic Mackerel, Squid, and Butterfish Fisheries; Amendment 10. RIN 0648-AY00 (75 FR 11441; March 11, 2010). NMFS implemented approved measures in Amendment 10 to the Atlantic Mackerel, Squid, and Butterfish (MSB) Fishery Management Plan (FMP). Amendment 10 was developed by the Mid-Atlantic Fishery Management Council to bring the FMP into compliance with Magnuson-Stevens Act requirements by establishing a rebuilding program that allows the butterfish stock to rebuild and protects the long-term health and stability of the stock; and by minimizing bycatch and the fishing mortality of unavoidable bycatch, to the extent practicable, in the MSB fisheries. Amendment 10 increased the minimum codend mesh size requirement for the long fin squid fishery; established a butterfish rebuilding program with a butterfish mortality cap for the long fin squid fishery; established a 72-hr trip notification requirement for the long fin squid fishery; and required an annual assessment of the butterfish rebuilding program by the Council's Scientific and Statistical Committee. This rule also made minor, technical corrections to the existing regulations. This action was conducted by NMFS under the authority of the Magnuson-Stevens Act.

5. Magnuson-Stevens Fishery Conservation and Management Act Provisions; Fisheries of the Northeastern United States; Northeast (NE) Multispecies Fishery; Amendment 16; Final Rule. RIN 0648-AW72 (75 FR 18261; April 9, 2010). NMFS issued the final rule to implement measures approved under Amendment 16 to the NE Multispecies Fishery Management Plan. Amendment 16 was developed by the New England Fishery Management Council as part of the biennial adjustment process in the FMP to update status determination criteria for all regulated NE multispecies and ocean pout stocks; to adopt rebuilding programs for NE multispecies stocks newly classified as being overfished and subject to overfishing; and to revise management measures, including significant revisions to the sector management measures, necessary to end overfishing, rebuild overfished regulated NE multispecies and ocean pout stocks, and mitigate the adverse economic impacts of increased effort controls. This final rule also implemented new requirements under Amendment 16 for establishing acceptable biological catch (ABC), annual catch limits (ACLs), and accountability measures (AMs) for each stock managed under the FMP, pursuant to the Magnuson-Stevens Act. Finally, this action added Atlantic wolffish to the list of species managed by the FMP. This action was necessary to address the results of the most recent stock assessment, which indicate that several additional regulated species are overfished and subject to overfishing, and that stocks currently classified as overfished require additional reductions in fishing mortality to rebuild by the end of their rebuilding periods. This action was conducted by NMFS under the authority of the Magnuson-Stevens Act

6. Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Reef Fish Fishery of the Gulf of Mexico; Amendment 31. RIN 0648-AX67. (75 FR 21512; April 26, 2010). NMFS issued this final rule to implement Amendment 31 to the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico prepared by the Gulf of Mexico Fishery Management Council. This final rule implemented restrictions applicable to the bottom longline component of the reef fish fishery in the exclusive economic zone (EEZ) of the eastern Gulf of Mexico. The restrictions included a bottom longline endorsement requirement, a seasonal closed area, and a limitation on the number of hooks that can be possessed and fished. The intent of this rule was to balance the continued operation of the bottom longline component of the reef fish fishery in the eastern Gulf while maintaining adequate protective measures for sea turtles. This action was conducted by NMFS under the authority of the Magnuson-Stevens Act.

7. Atlantic Highly Migratory Species; Atlantic Shark Management Measures; Amendment 3; Final Rule. RIN 0648-AW65 (75 FR 30483; June 1, 2010). NMFS published this final rule to implement the Final Amendment 3 to the Consolidated Atlantic Highly Migratory Species (HMS) Fishery Management Plan (FMP). As it developed Amendment 3, NMFS examined a full range of management alternatives available to rebuild blacknose sharks and end overfishing of blacknose and shortfin mako sharks, consistent with recent stock assessments, the Magnuson-Stevens Act, and other applicable law, and evaluated options for managing smooth dogfish as a highly migratory species under the HMS FMP. This final rule implemented the final conservation and management measures in Amendment 3 for blacknose sharks, shortfin mako sharks, and smooth dogfish. In order to reduce confusion with spiny dogfish regulations, this final rule places both smooth dogfish and Florida smoothhound into the “smoothhound shark complex.” This final rule also announced the opening date and 2010 annual quotas for small coastal sharks. These changes could have affected all fishermen, commercial and recreational, who fish for sharks in the Atlantic Ocean, the Gulf of Mexico, and the Caribbean Sea. This action was conducted by NMFS under the authority of the Magnuson-Stevens Act.

8. Endangered and Threatened Wildlife and Plants: Final Rulemaking to Establish Take Prohibitions for the Threatened Southern Distinct Population Segment of North American Green Sturgeon. RIN 0648-AV94 (75 FR 30714; June 2, 2010). This final Endangered Species Act (ESA) section 4(d) rule represented the regulations that we, NMFS, believe necessary and advisable to conserve the threatened Southern Distinct Population Segment of North American green sturgeon (Acipenser medirostris; hereafter Southern DPS). We applied the prohibitions listed under ESA section 9 for the Southern DPS, and we highlighted specific categories of activities that were likely to result in take of Southern DPS fish. We did not find it necessary and advisable to apply the take prohibitions to certain categories of activities that contribute to conserving the Southern DPS. We also provided a variety of methods by which take of the Southern DPS may have been authorized. This document also announces the availability of a final environmental assessment that analyzed the environmental impacts of promulgating the 4(d) regulations for the Southern DPS. This action was conducted by NMFS under the authority of the ESA.

9. Pacific Halibut Fisheries; Limited Access for Guided Sport Charter Vessels in Alaska. RIN 0648-AY85 (75 FR 56903; September 17, 2010). NMFS issued regulations amending the limited access program for charter vessels in the guided sport fishery for Pacific halibut in the waters of International Pacific Halibut Commission Regulatory Area 2C (Southeast Alaska) and Area 3A (Central Gulf of Alaska). These regulations revised the method of assigning angler endorsements to charter halibut permits to more closely align each endorsement with the greatest number of charter vessel anglers reported for each vessel that a charter business used to qualify for a charter halibut permit. This action was necessary to achieve the halibut fishery management goals of the North Pacific Fishery Management Council. This action was conducted by NMFS under authority of the Northern Pacific Halibut Act of 1982.

10. Fisheries of the Exclusive Economic Zone Off Alaska; Modified Nonpelagic Trawl Gear and Habitat Conservation in the Bering Sea Subarea. RIN 0648-AY34 (75 FR 61642; October 6, 2010). NMFS issued a final rule that implemented Amendment 94 to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area. Amendment 94 required participants using nonpelagic trawl gear in the directed fishery for flatfish in the Bering Sea subarea to modify the trawl gear to raise portions of the gear off the ocean bottom. Amendment 94 also changed the boundaries of the Northern Bering Sea Research Area to establish the Modified Gear Trawl Zone (MGTZ) and to expand the Saint Matthew Island Habitat Conservation Area. Nonpelagic trawl gear also was required to be modified to raise portions of the gear off the ocean bottom if used in any directed fishery for groundfish in the MGTZ. This action was necessary to reduce potential adverse effects of nonpelagic trawl gear on bottom habitat, to protect additional blue king crab habitat near St. Matthew Island, and to allow for efficient flatfish harvest as the distribution of flatfish in the Bering Sea changes. This action was intended to promote the goals and objectives of the Magnuson- Stevens Fishery Conservation and Management Act, the FMP, and other applicable laws. This action was conducted by NMFS under the authority of the Magnuson-Stevens Act.

11. Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Regulatory Amendment to the Fishery Management Plan for the Reef Fish Fishery of Puerto Rico and the U.S. Virgin Islands. RIN 0648-AY05 (75 FR 67247; November 2, 2010). NMFS issued this final rule that implemented a regulatory amendment to the Fishery Management Plan for the Reef Fish Fishery of Puerto Rico and the U.S. Virgin Islands prepared by the Caribbean Fishery Management Council. This rule modified the Bajo de Sico seasonal closure from a 3-month closure to a 6-month closure, and prohibits fishing for and possession of Caribbean reef fish in or from the EEZ portion of Bajo de Sico during the closure. The final rule also prohibited anchoring in the EEZ portion of Bajo de Sico year-round. In addition to the measures contained in the regulatory amendment, this final rule also added spear to the list of allowable gears in the commercial sector of the Caribbean reef fish fishery and revises the title of the FMP in the list of authorized fisheries and gear. The intended effect of this rule was to provide further protection for red hind spawning aggregations and large snappers and groupers, and better protect the essential fish habitat where these species reside. This action was conducted by NMFS under the authority of the Magnuson-Stevens Act.

12. Fisheries of the Exclusive Economic Zone Off Alaska; Groundfish Observer Program. RIN 0648-AW24 (75 FR 69016; November 10, 2010). NMFS issued a final rule to amend regulations implementing the North Pacific Groundfish Observer Program (Observer Program). This action was necessary to improve the operational efficiency of the Observer Program, as well as to improve the catch, bycatch, and biological data collected by observers for conservation and management of the North Pacific groundfish fisheries, including those data collected through scientific research activities. The final rule was intended to promote the goals and objectives of the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area and the Fishery Management Plan for Groundfish of the Gulf of Alaska. This action was conducted by NMFS under the authority of the Magnuson-Stevens Act.

13. Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Reef Fish Fishery of the Gulf of Mexico; Red Grouper Management Measures. RIN 0648-BA04 (75 FR74656; December 1, 2010). NMFS issued this final rule to implement actions identified in a regulatory amendment to the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico prepared by the Gulf of Mexico Fishery Management Council. This final rule reduced the commercial quota for red grouper and, thus, the combined commercial quota for shallow water grouper species, and requires vessels with valid commercial Gulf of Mexico reef fish permits to mark their buoy gear with the official vessel number. This rule also implemented minor revisions to codified text, including a revised definition of buoy gear, re-codification of the commercial and recreational quotas for greater amberjack, revision of the recreational accountability measure for greater amberjack, and removal of outdated language for the red snapper individual fishing quota program. The intended effect of this final rule was to help prevent overfishing of red grouper while achieving optimum yield by reducing red grouper harvest, consistent with the findings of the recent stock assessment for this species, and to implement technical corrections to the regulations. This action was conducted by NMFS under the authority of the Magnuson-Stevens Act.

14. Atlantic Highly Migratory Species; 2011 Commercial Fishing Season and Adaptive Management Measures for the Atlantic Shark Fishery. RIN 0648-AY98 (75 FR 76302; December 8, 2010). This final rule established opening dates and adjusted quotas for the 2011 fishing season for sandbar sharks, non-sandbar large coastal sharks (LCS), blacknose shark, non-blacknose small coastal shark (SCS), blue sharks, porbeagle sharks, and pelagic sharks (other than porbeagle or blue sharks) based on any over- and/or underharvests experienced during the 2009 and 2010 Atlantic commercial shark fishing seasons. NMFS was taking this action to establish the 2011 adjusted fishing quotas and to open the commercial fishing seasons for the Atlantic sandbar shark, non-sandbar LCS, blacknose shark, non-blacknose SCS, and pelagic shark fisheries based on over- and underharvests from the 2009 and 2010 fishing season. This action was expected to affect commercial shark fishermen in the Atlantic and Gulf of Mexico regions. In addition to establishing opening dates and adjusting annual quotas, this final rule implemented adaptive management measures, including flexible opening dates for the fishing season, as well as inseason adjustments to shark trip limits, to provide flexibility in management in the furtherance of equitable fishing opportunities, to the extent practicable, for commercial shark fishermen in all regions and areas. These actions were expected to affect commercial shark fishermen in the Atlantic and Gulf of Mexico regions. This action was conducted by NMFS under the authority of the Magnuson-Stevens Act.

15. Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Snapper-Grouper Fishery Off the Southern Atlantic States; Amendment 17A; Emergency Rule To Delay Effectiveness of the Snapper-Grouper Area Closure; Final Rule and Temporary Rule. RIN 0648-AY10 (75 FR 76873; December 9, 2010). NMFS issued this final rule to implement Amendment 17A to the Fishery Management Plan for the Snapper-Grouper Fishery of the South Atlantic Region (FMP), as prepared and submitted by the South Atlantic Fishery Management Council. This final rule established an ACL of zero for red snapper, which means all harvest and possession of red snapper in or from the South Atlantic EEZ is prohibited, and for a vessel with a Federal commercial or charter vessel/headboat permit for South Atlantic snapper-grouper, harvest and possession of red snapper is prohibited in or from State or Federal waters. This rule also implemented an area closure for South Atlantic snapper-grouper that extends from southern Georgia to northern Florida where harvest and possession of all snapper-grouper species is prohibited (except when fishing with black sea bass pots or spearfishing gear for species other than red snapper), and requires the use of non-stainless steel circle hooks when fishing for snapper-grouper species with hook and line gear north of 28 degrees N. latitude in the South Atlantic EEZ. Additionally, Amendment 17A established a rebuilding plan for red snapper and requires a monitoring program as the AM for red snapper. The intended effects of this rule were to end overfishing of South Atlantic red snapper and rebuild the stock. This action was conducted by NMFS under the authority of the Magnuson-Stevens Act.

16. Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Snapper-Grouper Fishery Off the Southern Atlantic States; Amendment 17B. RIN 0648-AY11 (75 FR 82280; December 20, 2010). NMFS issued this final rule to implement Amendment 17B to the Fishery Management Plan for the Snapper-Grouper Fishery of the South Atlantic Region, as prepared and submitted by the South Atlantic Fishery Management Council. This final rule established ACLs and AMs for eight snapper-grouper species in the FMP that were undergoing overfishing, and for black grouper, which was recently assessed and determined to not be undergoing overfishing or overfished; modified management measures to limit total mortality of those species to the ACL; and added ACLs, annual catch targets (ACTs), and AMs to the list of management measures that may be amended via the framework process. The intent of this final rule was to address overfishing of eight snapper-grouper species while maintaining catch levels consistent with achieving optimum yield. This action was conducted by NMFS under the authority of the Magnuson-Stevens Act.

NMFS will make available a copy of this notice and the completed reviews to the public at: http://www.nmfs.noaa.gov/sfa/laws_policies/economic_social/index.html.