Federal Register Vol. 82, No.111,

Prior documents in this proceeding: Notice of Hearing issued on September 27, 2016, and published in the September 30, 2016, issue of the Federal Register (81 FR 67217).

This action is governed by the provisions of sections 556 and 557 of title 5 of the United States Code and, therefore, is excluded from the requirements of Executive Orders 12866, 13563, and 13175. Additionally, because this rule does not meet the definition of a significant regulatory action it does not trigger the requirements contained in Executive Order 13771. See the Office of Management and Budget's (OMB) Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).

Notice of this rulemaking action was provided to tribal governments through the Department of Agriculture's (USDA) Office of Tribal Relations.

Notice is hereby given of the filing with the Hearing Clerk of this recommended decision with respect to the proposed amendments to Marketing Order 982 regulating the handling of hazelnuts grown in Oregon and Washington and the opportunity to file written exceptions thereto. Copies of this decision can be obtained from Melissa Schmaedick, whose address is listed above.

This recommended decision is issued pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act,” and the applicable rules of practice and procedure governing the formulation and amendment of marketing agreements and orders (7 CFR part 900).

The proposed amendments are based on the record of a public hearing held on October 18, 2016, in Wilsonville, Oregon. Notice of this hearing was published in the Federal Register on September 30, 2016 (81 FR 67217). The notice of hearing contained two proposals submitted by the Board and one submitted by USDA.

The proposed amendments were recommended by the Board on May 27, 2015, and were submitted to USDA on May 16, 2016. After reviewing the proposals and other information submitted by the Board, USDA made a determination to schedule this matter for hearing. The Board's proposed amendments to the order would: (1) Add authority to regulate quality for the purpose of pathogen reduction; and (2) add authority to establish different outgoing quality regulations for different markets.

USDA proposed to make any such changes as may be necessary to the order to conform to any amendment that may be adopted, or to correct minor inconsistencies and typographical errors.

Ten witnesses testified at the hearing. The witnesses represented hazelnut producers and handlers in the production area, as well as the Board, and one witness was from the USDA. The industry witnesses all supported the proposed amendments, while the USDA witness remained neutral. One dissenting opinion was received by AMS after the notice of hearing was published in the Federal Register. In accordance with section 900.16 of the Rules of Practice governing this proceeding (7 CFR 900.16), the ex parte communication, which opposed both proposals, was entered into the record, and is available on the USDA Web site.

The industry witnesses favored the two proposals. The first proposal would add authority to the order to regulate quality for the purpose of pathogen reduction. The second proposal would allow for the establishment of different outgoing quality regulations for different markets.

The authority to regulate quality does not currently exist in the order. Witnesses at the hearing explained that, if added to the order, the authority to regulate quality would be specifically for the purpose of reducing pathogen contamination in hazelnuts. According to witness testimony, Salmonella, E. coli, and Listeria, are all present in the soil and are chief among the pathogens that the industry would like to reduce. The proposed authority could also assist the industry in complying with the Food and Drug Administration's (FDA) food safety guidelines under the Food Safety Modernization Act of 2011 (FSMA).

The proposal to add authority to establish different outgoing quality regulations for different markets was supported by witnesses who spoke of the need to meet hazelnut purchasers' differing pathogen reduction treatment requirements. In addition, witnesses pointed out the potential cost savings for handlers by allowing different outgoing quality standards for different markets.

At the conclusion of the hearing, the Administrative Law Judge established a deadline of December 2, 2016, for the submission of corrections to the transcript, and January 1, 2017, as a deadline for interested persons to file proposed findings and conclusions or written arguments and briefs based on the evidence received at the hearing. No written arguments or briefs were filed.

The material issues presented on the record of hearing are as follows:

The following findings and conclusions on the material issues are based on evidence presented at the hearing and the record thereof.

Sections 982.12, 982.40, and 982.45 (“Merchantable hazelnuts,” “Marketing policy and volume regulation,” and “Establishment of grade and size regulations,” respectively) should be amended to authorize quality regulation for the purpose of pathogen reduction by inserting the words “and quality” after “grade, size,” in each section, respectively. Section 982.45 should also be amended by adding a new paragraph (c), “Quality regulations.” Additionally, the heading prior to § 982.45 should be revised to read “Grade, Size, and Quality Regulation.” Lastly, § 982.46, “Inspection and certification,” should be amended by adding paragraph (d). These proposed amendments to the Order would authorize the Board to regulate the quality of hazelnuts.

Currently, § 982.45 of the order states that the Board has authority to regulate grade and size; there is no mention of quality. Witnesses explained that the authority to regulate quality would allow them to regulate product attributes that fall outside the traditional scope of “grade” and “size.”

According to the record, current hazelnut grade and size standards correspond with USDA standards developed in 1975 for inshell hazelnuts and in 1980 for hazelnut kernels. The attributes currently regulated under grade and condition standards include, but are not limited to, characteristics of damaged hazelnuts, such as: Stains, adhering husk, mold, decay, rancidity, and insect injury. According to the record, if the order were amended to regulate quality, “quality” as used in the order and regulations would mean the reduction of pathogens. Witnesses explained that product contaminated by pathogens reduces that product's inherent quality and usability in the market. Therefore, the authority to test for and require action to reduce pathogens in hazelnuts would result in a higher quality product.

Witnesses also testified about the importance of quality checks on product during the handling process to ensure that the potential for pathogen contamination is minimized. This could be achieved by implementing kill-steps throughout the handling of hazelnuts and testing for pathogens in the end product. A kill-step is a measure taken, such as heat treatment, to mitigate contamination or the transfer of pathogens during product handling.

The Food Safety Steering Committee (FSSC), a committee of the Board, is conducting research to identify best methods for achieving a 5-log reduction in the presence of pathogens through various kill-steps. A log reduction is a mathematical term used to show the number of pathogens eliminated. A 5-log reduction means lowering the number of pathogens by 100,000-fold. For example, if there were 1,000,000 organisms present, the kill-step would need to reduce the number of organisms to 10 to achieve a 5-log reduction in pathogens. Current industry methods, or “kill-steps,” used to achieve a 5-log pathogen reduction include: Treatment with propylene oxide (PPO), steam pasteurization, roasting, and other heat treatments.

Witnesses discussed the need to regulate the levels of Salmonella, E. coli, and Listeria, which are naturally occurring bacteria. Currently, only steam pasteurization is approved by the FDA as a kill-step for hazelnuts. While a 5-log reduction is neither required under the marketing order, nor by existing FSMA guidelines, it is currently used by the FDA for other crops and therefore is used by FSSC as an acceptable minimum.

According to witnesses, authority to propose mandatory quality regulation that could reduce the potential for a widespread illness that could negatively affect the industry as a whole is necessary. Witnesses testified about an outbreak of Salmonella in 2009, which resulted in a recall of hazelnuts. The recall was due to detection of Salmonella at a plant that processed different varieties of nuts that were comingled with hazelnuts. This outbreak spurred research on contamination, the formation of the FSSC, and resulted in the industry's determination that regulation of quality for pathogen reduction is necessary in order to safeguard the industry from future pathogen-related food scares.

The proposed authority could also enable the Board to establish mandatory quality inspections, thereby ensuring that all handlers are fully participating in proper pathogen reduction measures. Such regulation would build consumer confidence and lower the likelihood of the need for another product recall.

Witnesses stated that the anticipated immediate cost impact on the industry as a result of this proposal would be minimal. If approved in a referendum by producers, the addition of “quality” to the list of attributes that can be regulated under the order would not result in new, immediate regulation. Any new regulation would need to be developed and vetted as a proposal, approved and recommended by the Board, published by USDA as a proposed rule, commented on by the public, and receive USDA approval prior to being implemented.

If quality regulation were recommended by the Board and approved by USDA, such regulation would address the industry's desire to reduce the potential for pathogen contaminations. For example, if hazelnuts were to be tested for Salmonella under the authority to regulate quality, it would benefit the industry by ensuring that high levels of this bacteria do not enter the market. The ability to regulate quality would assure customers of the industry's oversight of product quality. As such, witnesses explained that any potential costs of future regulation would be outweighed by the benefits of pathogen reduction in the market.

According to witnesses, hazelnuts are currently inspected for grade and size. The addition of another inspection parameter would not result in significant, increased costs. Additionally, according to the record, the majority of handlers are already voluntarily implementing a kill-step or are shipping to a customer who will perform their own kill-step, thereby eliminating the need for handlers to perform one themselves.

Should the authority to regulate quality be implemented, witnesses discussed the supporting rules and regulations that would need to be developed. Witnesses indicated that handlers would likely be required to submit treatment plans each year, identifying treatment processes, facilities, and documentation procedures. Future regulations would also include compliance and verification provisions, including handler verification plans and record retention requirements to substantiate compliance with the regulations. The Board would be charged with ensuring compliance with any new regulations.

If this proposal were implemented, the Board could establish quality standards for all Oregon and Washington hazelnut handlers, thereby ensuring uniform quality of product and eliminating the free-rider problem. A free-rider is someone who benefits from goods or services, but does not pay for them. In the case of hazelnuts, most handlers treat hazelnuts for pathogen reduction, incurring associated costs and building the reputation of a safe product. Handlers who do not treat hazelnuts for pathogen reduction not only benefit from the reputation built by of others, at no cost, but by not treating their hazelnuts they also put the entire industry at risk of a product recall.

Overall, witnesses anticipated that quality regulations could result in increased returns for both producers and handlers as, in some markets, a higher price would be paid for quality-certified product. Therefore, the potential benefit of higher prices, in addition to reduced contamination, would outweigh the costs, as described above.

Finally, USDA is recommending one clarifying change to the language in the proposed new paragraph 982.45(c), which would add authority to regulate quality. USDA has determined that the language as presented in the Notice of Hearing was redundant and, therefore, confusing. USDA has revised the proposed language in the new paragraph § 982.45(c) so that its intent is more clearly stated. This new language is included in the proposed regulatory text of this recommended decision.

No testimony opposing this proposed amendment was given at the hearing.

For the reasons stated above, it is recommended that §§ 982.12 and 982.40 should be amended, § 982.45 should be amended by adding a new paragraph (c), the heading prior to § 982.45 should be revised to include “quality,” and a new paragraph (d) should be added to § 982.46, to add quality regulation authority under the order.

Section 982.45, “Establishment of grade and size,” should be further amended to provide authority to establish different regulations for different markets by adding a new paragraph (d), “Different regulations for different markets.” This would add authority to establish different outgoing quality regulations for different markets.

The order does not currently allow for different standards to be applied to hazelnuts shipped to different foreign markets. This proposed authority would allow the Board to develop quality regulations that are best suited for particular market destinations. For example, it would be redundant to treat exports to the People's Republic of China (China), the largest export market for hazelnuts, with a kill-step, because they are roasted and brined in China prior to sale. Witnesses explained that if hazelnuts sold to China were subject to a kill-step prior to exportation, the additional roasting and brining treatment in China would result in a brittle, over-processed product which would no longer be desirable to consumers.

Witnesses clarified that this proposal would not result in new, immediate regulations; it would only result in the authority to establish different quality regulations for different market destinations under the order. If this proposal were implemented, the Board could make recommendations for different regulations for different market destinations to USDA. Any new regulation would need to be developed and vetted as a proposal, approved and recommended by the Board, published by USDA as a proposed rule, opened for public comment, and receive USDA approval prior to being implemented.

Witnesses stated that if any market-specific regulations were to be implemented as a result of this authority, the anticipated impact on producers and handlers would be negligible. Different regulations for different market destinations would not hinder the export of hazelnuts. Witnesses explained that many hazelnut handlers shipping to export markets already voluntarily meet the unique product specifications of those export markets to meet consumer tastes and demands.

No testimony opposing this proposed amendment was given at the hearing.

For the reasons stated above, it is recommended that § 982.45, “Establishment of grade and size regulations,” should be further amended by adding a new paragraph (d) to provide authority to establish different quality regulations for different market destinations.

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

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

According to the hearing transcript, there are currently over 800 hazelnut growers in the production area. According to National Agricultural Statistics Service (NASS) data presented at the hearing, 2015 grower receipts averaged $2,800 per ton. With a total 2015 production of 31,000 tons, the farm gate value for hazelnuts in that year totaled $86.8 million ($2,800 per ton multiplied by 31,000 tons). Taking the total value of production for hazelnuts and dividing it by the total number of hazelnut growers provides a return per grower of $108,500. A small grower as defined by the Small Business Administration (SBA) (13 CFR 121.201) is one that grosses less than $750,000 annually. Therefore, a majority of hazelnut growers are considered small entities under the SBA standards. Record evidence indicates that approximately 98 percent of hazelnut growers are small businesses.

According to the industry, there are 17 hazelnut handlers, four of which handle 80 percent of the crop. While market prices for hazelnuts were not included among the data presented at the hearing, an estimation of handler receipts can be calculated using the 2015 grower receipt value of $86.8 million. Multiplying $86.8 million by 80 percent ($86.8 million × 80 percent = $69.4 million) and dividing by four indicates that the largest hazelnut handlers received an estimated $17.3 million each. Dividing the remaining 20 percent of $86.8 million, or $17.4 million, by the remaining 13 handlers, indicates average receipts of $1.3 million each. A small agricultural service firm is defined by the SBA as one that grosses less than $7,500,000. Based on the above calculations, a majority of hazelnut handlers are considered small entities under SBA's standards.

The production area regulated under the order covers Oregon and Washington. According to the record, Eastern Filbert Blight has heavily impacted hazelnut production in Washington. One witness stated that there currently is no commercial production in that state. As a result, production data entered into the record pertains almost exclusively to Oregon.

NASS data indicates bearing acres of hazelnuts reached a fifteen-year high during the 2013-2014 crop year at 30,000 acres. Acreage has remained steady, at 30,000 bearing acres for the 2015-2016 crop year. By dividing 30,000 acres by 800 growers, NASS data indicate there are approximately 37.5 acres per grower. Industry testimony estimates that due to new plantings, there are potentially 60,000 bearing acres of hazelnuts, or an estimated 75 bearing acres per hazelnut grower.

During the hearing held October 18, 2016, interested parties were invited to present evidence on the probable regulatory impact of the proposed amendments to the order on small businesses. The evidence presented at the hearing shows that none of the proposed amendments would have a significant economic impact on a substantial number of small agricultural producers or firms.

The proposal described in Material Issue 1 would amend § 982.45 to authorize the Board to establish minimum quality requirements and § 982.46 to allow for certification and inspection to enforce quality regulations.

Presently, the Board is charged with assuring hazelnuts meet grade and size standards. The Board also has the authority to employ volume control. If finalized, this proposal would authorize the Board to propose quality regulations that require a treatment to reduce pathogen load prior to shipping hazelnuts. Witnesses supported this proposal and stated that treatment regulation would not significantly impact the majority of handlers since most handlers already treat product prior to shipment. Witness testimony indicated that the proposed amendment would lower the likelihood of a product recall incident and the associated negative economic impacts. Witnesses noted that the proposed amendment would give the Board flexibility to ensure consumer confidence in the quality of hazelnuts.

It is determined that the additional costs incurred to regulate quality would be greatly outweighed by the increased flexibility for the industry to respond to changing quality regulation and food safety. There is expected to be no financial impact on growers. Mandatory treatment requirements should not cause dramatic increases in handler operating costs, as most already voluntarily treat hazelnuts. Handlers bear the direct cost associated with installing and operating treatment equipment or contract out the treatment of product to a third party.

According to the industry, most domestic hazelnut product is shipped to California for PPO treatment. The cost to ship and treat product is estimated to be 10 cents per pound or less. Using 2014-2015 shipment data, at 10 cents per pound, the cost to ship and treat the 6.5 million pounds of Oregon hazelnuts shipped to the domestic market is not expected to exceed $650,000. Shipments to foreign markets typically do not require treatment and therefore have no associated treatment costs. Large handlers who wish to install treatment equipment may face costs ranging from $100,000 to $5,000,000 depending on the treatment system.

One witness noted that mandatory treatment would benefit the industry by addressing the free-rider situation in which handlers who do not treat the product benefit from consumer confidence while incurring additional risks. Handlers that do treat product absorb all costs of treatment while building the reputation of the industry.

The record shows that the proposal to add authority to establish different outgoing quality requirements for different markets would, in itself, have no economic impact on producers or handlers of any size. Regulations implemented under that authority could impose additional costs on handlers required to comply with them. However, witnesses testified that establishing mandatory regulations for different markets could increase the industry's credibility and reduce the risk that shipments of substandard product could jeopardize the entire industry's reputation. Record evidence shows that any additional costs are likely to be offset by the benefits of complying with those requirements.

For the reasons described above, it is determined that the costs attributed to the above-proposed changes are minimal; therefore, the proposal would not have a significant economic impact on a substantial number of small entities.

The proposal described in Material Issue 2 would allow for the establishment of different outgoing quality regulations for different markets.

Witnesses testified that allowing different regulations for different markets would likely lower the costs to handlers and prevent multiple treatments of hazelnuts while preserving hazelnut quality.

Certain buyers of hazelnuts do not require prior treatment and perform their own kill-step processes such as roasting, baking or pasteurization. A witness stated that two of the largest buyers of hazelnuts, Diamond of California and Kraft Foods, Inc. choose to treat product after arrival.

Shipments to foreign markets often do not require treatment and are treated after exportation. Testimony indicated that during the 2014-2015 season, of the 9.5 million pounds of kernel hazelnuts shipped to Canada, almost all were further treated by the customers. In conjunction with the proposed quality authority discussed in Material Issue 1, specific regulation could be developed to exempt exported product, subject to further pathogen-reduction treatment in the country of purchase, from mandatory treatment. In Canada, the purchaser, not the handler, is responsible for providing pathogen reduction treatment. Requiring handlers to treat hazelnuts before export would be duplicative in cost and treatment. At 10 cents per pound, it is estimated that on sales to Canada alone, handler savings could reach as much as $950,000 (9.5 million pounds of shipments multiplied by 10 cents per pound), if exempted from the mandatory treatment requirement. Hazelnuts shipped to China are typically processed after arrival and also do not necessitate treatment by handlers in the United States.

China is a major export market for inshell hazelnuts. According to the hearing transcript, from 2011-2015, 54 percent of inshell hazelnuts were exported. The total value of inshell exports was approximately $41,340,780, if 54 percent is multiplied by the $76,557,000 total hazelnut exports. In 2015-2016 China received 90 percent of U.S. inshell hazelnut exports. The 2015-2016 value of U.S. hazelnut exports to China is estimated to be approximately $37,206,702, or 90 percent of the value of all U.S. inshell exports. Oregon hazelnuts compete primarily with Turkish (kernel) and Chilean (inshell) hazelnuts. Testimony indicates that multiple treatments of hazelnuts would likely affect the quality of hazelnuts. Allowing for different regulations for different markets would help Oregon and Washington hazelnuts compete in foreign markets and maintain U.S. market share. It is estimated that 80 to 90 percent of product is already being treated, and thus, the cost has already been incorporated into the price purchasers pay.

One witness noted that shipments to the European Union may require different regulations since this market prefers certain treatment processes.

The record shows that the proposal to add authority to establish different outgoing quality requirements for different markets would, in itself, have no economic impact on producers or handlers of any size. Regulations implemented under that authority could potentially impose additional costs on handlers required to comply with them.

For the reasons described above, it is determined that the benefits of adding authority for different market regulations to the order would outweigh the potential costs of future implementation.

USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this proposed rule. These amendments are intended to improve the operation and administration of the order and to assist in the marketing of hazelnuts.

Board meetings regarding these proposals, as well as the hearing date and location, were widely publicized throughout the Oregon and Washington hazelnut industry, and all interested persons were invited to attend the meetings and the hearing to participate in Board deliberations on all issues. All Board meetings and the hearing were public forums, and all entities, both large and small, were able to express views on these issues. Finally, interested persons are invited to submit information on the regulatory impacts of this action on small businesses.

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

Current information collection requirements for Part 982 are approved by OMB, under OMB Number 0581-0189—“Generic OMB Fruit Crops.” No changes in these requirements are anticipated as a result of this proceeding. Should any such changes become necessary, they would be submitted to OMB for approval.

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

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

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

Briefs, proposed findings and conclusions, and the evidence in the record were considered in making the findings and conclusions set forth in this recommended decision. To the extent that the suggested findings and conclusions filed by interested persons are inconsistent with the findings and conclusions of this recommended decision, the requests to make such findings or to reach such conclusions are denied.

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

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

(2) The marketing order, as amended, and as hereby proposed to be further amended, regulates the handling of hazelnuts grown in the production area (Oregon and Washington) in the same manner as, and is applicable only to, persons in the respective classes of commercial and industrial activity specified in the marketing order upon which a hearing has been held;

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

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

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

A 30-day comment period is provided to allow interested persons to respond to this proposal. Thirty days is deemed appropriate because these proposed changes have already been widely publicized, and the Board and industry would like to avail themselves of the opportunity to exercise the new authority. All written exceptions received within the comment period will be considered, and a producer referendum will be conducted before any of these proposals are implemented.

For the reasons set out in the preamble, 7 CFR part 982 is proposed to be amended as follows:

The revisions should read 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-2017-0530; Directorate Identifier 2017-NM-012-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.

On May 17, 2016, we issued AD 2016-11-02, Amendment 39-18529 (81 FR 33371, May 26, 2016) (“AD 2016-11-02”), for all Bombardier, Inc., Model CL-600-2C10 (Regional Jet Series 700, 701, & 702) airplanes; Model CL-600-2D15 (Regional Jet Series 705) airplanes; Model CL-600-2D24 (Regional Jet Series 900) airplanes; and Model CL-600-2E25 (Regional Jet Series 1000) airplanes. AD 2016-11-02 was prompted by reports of loose or missing fasteners on the upper and lower engine pylon structure common to the upper and lower pylon skin panels and engine thrust fitting. AD 2016-11-02 requires repetitive detailed visual inspections of the upper and lower engine pylons for protruding, loose, or missing fasteners; and repair, including applicable related investigative and corrective actions, if necessary. We issued AD 2016-11-02 to detect and correct protruding, loose, or missing fasteners, which could result in structural failure of the engine pylons.

Since we issued AD 2016-11-02, we have determined that a terminating action is necessary to address the unsafe condition. In addition, Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2016-10R1, dated July 8, 2016 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Bombardier, Inc., Model CL-600-2C10 (Regional Jet Series 700, 701, & 702) airplanes; Model CL-600-2D15 (Regional Jet Series 705) airplanes; Model CL-600-2D24 (Regional Jet Series 900) airplanes; and Model CL-600-2E25 (Regional Jet Series 1000) airplanes. The MCAI states:

Bombardier, Inc., issued Service Bulletin 670BA-54-007, dated May 13, 2016. The service information describes procedures for replacing fasteners and collars, including applicable related investigative and corrective actions.

Bombardier, Inc., also issued Repair Engineering Order 670-54-51-034, “Repair for Missing or Loose/Protruding Fasteners in Upper and Lower Pylon Skins FS 1088-FS 1098, PBL 69.3 L & RHS,” Revision A, dated April 20, 2016. The service information describes procedures for repair, including applicable related investigative and corrective actions.

In addition, Bombardier, Inc., issued Temporary Revision 54-0007, dated March 8, 2016, to the CRJ700/900/1000 AMM. The service information describes procedures for a detailed visual inspection for protruding, loose, or missing fasteners of the left-hand and right-hand upper and lower engine pylons.

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 these same type designs.

We estimate that this proposed AD affects 273 airplanes of U.S. registry.

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-2017-0554; Directorate Identifier 2016-NM-201-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.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2016-0229, dated November 15, 2016 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A300 series airplanes; Model A300 B4-600, B4-600R, and F4-600R series airplanes, and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes); and Model A310 series airplanes. The MCAI states:

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-2017-0554.

We reviewed the following Airbus Service Information.

• Airbus Service Bulletin A300-57-0256, Revision 00, dated August 3, 2015 (Airbus Model A300 series airplanes).

• Airbus Service Bulletin A300-57-6114, Revision 00, dated August 3, 2015 (for Model A300 B4-600, B4-600R, and F4-600R series airplanes, and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes).

• Airbus Service Bulletin A310-57-2102, Revision 00, dated August 3, 2015 (for Model A310 series airplanes).

This service information describes an inspection of the airplane maintenance records or a detailed inspection of the left-hand and right-hand wing areas to determine whether any repair or damage is beyond the allowable limits in the current revision of the SRM, and repair if necessary. These documents are distinct since they apply to different airplane models in different configurations. 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 these same type designs.

We estimate that this proposed AD affects 128 airplanes of U.S. registry.

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

We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in 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:

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-2017-0553; Directorate Identifier 2016-NM-208-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

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

We have received a report indicating that the current PBM may unintentionally disengage, fail to set, fail to release, or become jammed. The procedure for releasing the parking brake requires depressing the brake pedals. The current PBM can be disengaged without depressing the brake pedals. Operators may experience error messages, jammed PBM solenoid, unintended parking brake release, and the inability to set or release the parking brake. An unintended parking brake release could result in damage to the airplane and be a hazard to persons or property on the ground.

We reviewed Boeing Service Bulletin B787-81205-SB320028-00, Issue 001, dated October 31, 2016. The service information describes procedures for replacing the PBM and doing a PBM installation test. 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.

We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would require accomplishing the actions specified in the service information described previously. For information on the procedures and compliance times, see this service information at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-0553.

The phrase “corrective actions” is used in this proposed AD. Corrective actions correct or address any condition found. Corrective actions in an AD could include, for example, repairs.

The effectivity of Boeing Service Bulletin B787-81205-SB320028-00, Issue 001, dated October 31, 2016, is limited to certain The Boeing Company Model 787-8 and 787-9 airplanes. However, the applicability of this proposed AD includes all Model 787-8 and 787-9 airplanes. Because the affected parts are rotable parts, we have determined that these parts could later be installed on airplanes that were initially delivered with acceptable parts, thereby subjecting those airplanes to the unsafe condition. This difference has been coordinated with Boeing.

We estimate that this proposed AD affects 68 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:

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-2017-0533; Directorate Identifier 2016-NM-156-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.

Structural fatigue damage is progressive. It begins as minute cracks, and those cracks grow under the action of repeated stresses. This can happen because of normal operational conditions and design attributes, or because of isolated situations or incidents such as material defects, poor fabrication quality, or corrosion pits, dings, or scratches. Fatigue damage can occur locally, in small areas or structural design details, or globally. Global fatigue damage is general degradation of large areas of structure with similar structural details and stress levels. Multiple-site damage is global damage that occurs in a large structural element such as a single rivet line of a lap splice joining two large skin panels. Global damage can also occur in multiple elements such as adjacent frames or stringers. Multiple-site-damage and multiple-element-damage cracks are typically too small initially to be reliably detected with normal inspection methods. Without intervention, these cracks will grow, and eventually compromise the structural integrity of the airplane, in a condition known as WFD. As an airplane ages, WFD will likely occur, and will certainly occur if the airplane is operated long enough without any intervention.

The FAA's WFD final rule (75 FR 69746, November 15, 2010) became effective on January 14, 2011. The WFD rule requires certain actions to prevent structural failure due to WFD throughout the operational life of certain existing transport category airplanes and all transport category airplanes that will be certificated in the future. For existing and future airplanes subject to the WFD rule, the rule requires that DAHs establish a limit of validity (LOV) of the engineering data that support the structural maintenance program. Operators affected by the WFD rule may not fly an airplane beyond its LOV, unless an extended LOV is approved.

The WFD rule (75 FR 69746, November 15, 2010) does not require identifying and developing maintenance actions if the DAHs can show that such actions are not necessary to prevent WFD before the airplane reaches the LOV. Many LOVs, however, do depend on accomplishment of future maintenance actions. As stated in the WFD rule, any maintenance actions necessary to reach the LOV will be mandated by airworthiness directives through separate rulemaking actions.

In the context of WFD, this action is necessary to enable DAHs to propose LOVs that allow operators the longest operational lives for their airplanes, and still ensure that WFD will not occur. This approach allows for an implementation strategy that provides flexibility to DAHs in determining the timing of service information development (with FAA approval), while providing operators with certainty regarding the LOV applicable to their airplanes.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive AD 2016-0178, dated September 12, 2016 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A300 series airplanes. The MCAI states:

The required actions include a rototest inspection for cracks of the fastener and tooling holes at certain locations and a check of the diameter of the holes, and repair or modification of the affected fuselage structure if necessary. 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-2017-0533.

Airbus issued the following service information:

• Airbus Service Bulletin A300-53-6187, Revision 00, dated May 31, 2016. This service information describes procedures for a rototest inspection for cracks of the fastener and tooling holes at certain locations, a check of the diameter of the holes, repair, and modification of the affected fuselage structure by reinforcing the frames between right hand FR 20 RH and FR 25 RH, or FR 21 RH and FR 25 RH, depending on the configuration; and reinforcing the frame couplings between stringer STGR 20 RH and STGR 23 RH.

• Airbus Service Bulletin A310-53-2145, Revision 00, dated May 31, 2016. This service information describes procedures for a rototest inspection for cracks of the fastener and tooling holes at certain locations, a check of the diameter of the holes, repair, and modification of the affected fuselage structure by reinforcing the frames between right hand FR20 RH and FR25 RH; and reinforcing the frame couplings between STGR 20 RH and STGR 23 RH.

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.

We estimate that this proposed AD affects 132 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 Department's statutory authority is set forth in sections 203 and 208 of the LMRDA, 29 U.S.C. 432, 438. Section 208 of the LMRDA provides that the Secretary of Labor shall have authority to issue, amend, and rescind rules and regulations prescribing the form and publication of reports required to be filed under Title II of the Act and such other reasonable rules and regulations as he may find necessary to prevent the circumvention or evasion of the reporting requirements. 29 U.S.C. 438. Section 203, discussed in more detail below, sets out the substantive reporting obligations.

The Secretary has delegated his authority under the LMRDA to the Director of the Office of Labor-Management Standards and permitted redelegation of such authority. See Secretary's Order 03-2012 (Oct. 19, 2012), published at 77 FR 69375 (Nov. 16, 2012).

The proposal to rescind the March 24, 2016 Rule is part of the Department's continuing effort to fairly effectuate the reporting requirements of the LMRDA. The LMRDA generally reflects obligations of unions and employers to conduct labor-management relations in a manner that protects the rights of employees to exercise their right to choose whether to be represented by a union for purposes of collective bargaining. The LMRDA's reporting provisions promote these rights by requiring unions, employers, and labor relations consultants to publicly disclose information about certain financial transactions, agreements, and arrangements. The Department believes that a fair and transparent government regulatory regime must consider and balance the interests of labor relations consultants, employers, labor organizations, their members, and the public. Any change to a labor relations consultant's recordkeeping, reporting and business practices must be based on a demonstrated and significant need for information, consideration of the burden associated with such reporting, and any increased costs associated with the change.

In enacting the LMRDA in 1959, a bipartisan Congress sought to protect the rights and interests of employees, labor organizations and the public generally as they relate to the activities of labor organizations, employers, labor relations consultants, and their officers, employees, and representatives.

Section 203(a) of the LMRDA, 29 U.S.C. 433(a), requires employers to report to the Department of Labor “any agreement or arrangement with a labor relations consultant or other independent contractor or organization” under which such person “undertakes activities where an object thereof, directly or indirectly, is to persuade employees to exercise or not to exercise,” or how to exercise, their rights to union representation and collective bargaining. 29 U.S.C. 433(a)(4).1 “[A]ny payment (including reimbursed expenses)” pursuant to such an agreement or arrangement must also be reported. 29 U.S.C. 433(a)(5). The report must be one “showing in detail the date and amount of each such payment, . . . agreement, or arrangement . . . and a full explanation of the circumstances of all such payments, including the terms of any agreement or understanding pursuant to which they were made.” This information must be submitted on the prescribed Form LM-10 (“Employer Report”) within 90 days of the close of the employer's fiscal year. 29 U.S.C. 433(a); 29 CFR part 405.

LMRDA section 203(b) imposes a similar reporting requirement on labor relations consultants and other persons. It provides, in part, that every person who enters into an agreement or arrangement with an employer and undertakes activities where an object thereof, directly or indirectly, is to persuade employees to exercise or not to exercise, or how to exercise, their rights to union representation and collective bargaining “shall file within thirty days after entering into such agreement or arrangement a report with the Secretary . . . containing . . . a detailed statement of the terms and conditions of such agreement or arrangement.” 29 U.S.C. 433(b). This information must be submitted on the prescribed Form LM-20 (“Agreement and Activities Report”) within 30 days of entering into the reportable agreement or arrangement. See 29 U.S.C. 433; 29 CFR part 406.

A third report is relevant here. Section 203(b) further requires that every labor relations consultant or other person who engages in reportable activity must file an additional report in each fiscal year during which payments were made as a result of reportable agreements or arrangements. The report must contain a statement (A) of the consultant's receipts of any kind from employers on account of labor relations advice or services, designating the sources thereof, and (B) of the consultant's disbursements of any kind, in connection with such services and the purposes thereof. This information must be submitted on the prescribed Form LM-21 (“Receipts and Disbursements Report”) within 90 days of the close of the labor relations consultant's fiscal year. See 29 U.S.C. 433(b); 29 CFR part 406.

Since at least 1963, the reporting requirements have required reporting by the prescribed forms Form LM-10, Form LM-20, and Form LM-21. 28 FR 14384, Dec. 27, 1963, See 29 CFR part 405, 406.

LMRDA section 203(c) ensures that sections 203(a) and 203(b) are not construed to require reporting “by reason of [the consultant] giving or agreeing to give advice.” Section 203(c), referred to as the “advice” exemption, provides in pertinent part that “nothing in this section shall be construed to require any employer or other person to file a report covering the services of such person by reason of his giving or agreeing to give advice to such employer.” 29 U.S.C. 433(c). Finally, LMRDA section 204 exempts from reporting attorney-client communications, which are defined as “information which was lawfully communicated to [an] . . . attorney by any of his clients in the course of a legitimate attorney-client relationship.” 29 U.S.C. 434.

The Department proposes to rescind the March 24, 2016 Rule. 81 FR 15924 (Mar. 25, 2016). This action would not affect the disclosure requirements currently in effect. The U.S. District Court for the Northern District of Texas issued a nationwide permanent injunction against enforcement of the Rule on November 16, 2016, which continued a preliminary injunction that had been entered on June 27, 2016. National Federation of Independent Business v. Perez (N.D. Tex. 5:16-cv-00066-c). Although the Rule technically went into effect, its implementation was enjoined before its application became mandatory, and no reports were filed or are due under it. The Department has continued to enforce the longstanding and pre-existing interpretation of the advice exemption.

In 1960, one year after passage of the Act, the Department issued its initial interpretation (the “original interpretation”) of Section 203(c)'s “advice” exemption. This interpretation was reflected in a technical assistance publication for employers. U.S. Dep't of Labor, Bureau of Labor-Management Reports,2 Technical Assistance Aid No. 4: Guide for Employer Reporting (1960). Under this original interpretation, the Department required employers to report any “[a]rrangement with a `labor relations consultant' or other third party to draft speeches or written material to be delivered or disseminated to employees for the purpose of persuading such employees as to their right to organize and bargain collectively.” Id. at 18. By contrast, employers were not required to report “[a]rrangements with a `labor relations consultant,' or other third parties related exclusively to advice, representation before a court, administrative agency, or arbitration tribunal, or engaging in collective bargaining on [the employer's] behalf.” Id. Additionally, in opinion letters to members of the public, the Department stated that a lawyer's or consultant's revision of a document prepared by an employer constituted reportable activity. See 76 FR 36178, 36180 (June 21, 2011) (NPRM) (citing Benjamin Naumoff, Reporting Requirements under the Labor-Management Reporting and Disclosure Act, in Fourteenth Annual Proceedings of the New York University Conference on Labor 129, 140-141 (1961)).

In 1962, the Department adopted a more limited view regarding the scope of disclosure under Section 203, construing the advice exemption of section 203(c) more broadly by excluding from reporting the provision of materials by a third party to an employer that the employer could “accept or reject.” 3 In later years, the Department reiterated this position—sometimes referred to as the “accept or reject” test—though sometimes expressing doubts regarding its soundness. See Subcommittee on Labor-Management Relations, H. Comm. On Education and Labor, The Forgotten Law: Disclosure of Consultant and Employer Activity Under the L.M.R.D.A. (Comm. Print 1984) (statement of Richard Hunsucker, Director, Office of Labor-Management Standards Enforcement, Labor-Management Standards Administration, U.S. Department of Labor); Subcommittee on Labor-Management Relations, H. Comm. on Education and Labor, 4 Pressures in Today's Workplace 5 (Comm. Print 1980) (statement of William Hobgood, Assistant Secretary of Labor for Labor-Management Relations). In 2001, the Department issued a revised interpretation of Section 203(c), expanding the scope of reportable activities by focusing on whether an activity has persuasion of employees as an object, rather than categorically exempting activities in which a consultant has no direct contact with employees. See 66 FR 2782 (Jan. 11, 2001). However, later that year, that interpretation was rescinded, and the Department returned to its prior view. See 66 FR 18864 (Apr. 11, 2001).

On June 21, 2011, the Department issued a notice of proposed rulemaking to revise its interpretation of section 203(c). 76 FR 36178. Approximately 9,000 comments were received. 81 FR at 15945. On March 24, 2016, the Department issued its final Rule, addressing the comments it received. See 81 FR at 15945-16000.

That Rule—the subject of this proposal—requires employers and their consultants to report not only agreements or arrangements pursuant to which a consultant directly contacts employees, but also where a consultant engages in activities “behind the scenes,” where an object is to persuade employees concerning their rights to organize and bargain collectively. Id. at 15925.

The Rule construes the “advice” exemption more narrowly than the prior interpretation. In broadening the scope of reportable “persuader” conduct, the Department abandoned its position that only direct communication between a consultant and employees triggered the reporting requirement, and that any other activity was exempt “advice.” The fact that the employer itself delivers the message or carries out the policy developed by a consultant would no longer exempt a consulting arrangement from reporting. The stated purpose of this change was to “more closely reflect the employer and consultant reporting intended by Congress in enacting the LMRDA.” 81 FR at 16001. The Rule cited evidence that the use of outside consultants to contest union organizing efforts had proliferated, while the number of reports filed remained consistently small. 81 FR at 16001. The Department concluded that its previous “broad interpretation of the advice exemption ha[d] contributed to this underreporting.” Id.

Both the preamble to the Rule and the instructions on the relevant forms define “advice,” which does not give rise to a reporting obligation, as “an oral or written recommendation regarding a decision or a course of conduct.” Id. at 15,939, 16,028 (LM-10 instructions), 16,044 (LM-20 instructions). The Rule thus distinguishes between agreements to advise a client on a proposed course of conduct, e.g., warning an employer that a statement in an employer-drafted speech would constitute an unfair labor practice or identifying what other companies have done, which does not give rise to an obligation to report, and agreements to develop or direct that course of conduct via an activity that falls under one of five categories: Direct contact with employees, or four categories of indirect activity (directing supervisor activity, providing material for employers to disseminate to employees, conducting tailored seminars on the issue of unionization, and developing or implementing personnel policies designed to encourage unionization). 81 FR at 15938. This includes providing messaging on unionization, developing policies in order to dissuade employees as to the need for a union (such as a longer lunch break or a more generous leave policy), drafting or revising written materials regarding unionization for dissemination to employees, planning “captive audience” meetings, or scripting interactions between supervisors and employees, which do give rise to a reporting obligation.

Reporting under the Rule is to be completed on the Form LM-10, which employers are required to file within 90 days of the end of their fiscal year, and the Form LM-20, which consultants are to file within 30 days of entering into a persuader agreement and the instructions to those forms include the 2016 interpretations. See 81 FR at 16022-16051. The LM-10 form is a four-page form; the LM-20 form is two pages. Much of the LM-10 form concerns employer activities not at issue here. The only materials required to be submitted along with either form are written agreements to engage in persuader activities, should they exist. Both forms include check boxes listing common types of reportable persuader activities.

The Department proposes to rescind the Rule to provide the Department with an opportunity to give more consideration to several important effects of the Rule on the regulated parties. Rescission would ensure that any future changes to the Department's interpretation would reflect additional consideration of possible alternative interpretations of the statute, and could address the concerns that have been raised by reviewing courts. Rescission is further proposed because the burden of the Form LM-20 may have been substantially increased by the Form LM-21's requirements, and the Department considers it prudent to consider the effects of those requirements together. The Department will also consider the potential effects of the Rule on attorneys and employers seeking legal assistance. Rescission would also permit the Department to consider the impact of shifting priorities and resource constraints.

A. The Department proposes to rescind the Rule to allow the Department to engage in further statutory analysis.

Courts analyzing the statutory reporting requirement, both before and after promulgation of the March 24, 2016 Rule, have expressed uncertainty about the interaction “between the coverage provisions of the LMRDA, and the Act's exemption for advice.” UAW v. Dole, 869 F.2d 616, 618 (D.C. Cir. 1989). Further, while some courts have viewed the statutory exemption in section 203(c) as making “explicit what was already implicit in § 203(b), to guard against misconstruction of § 203(b),” see Wirtz v. Fowler, 372 F.2d 315, 330 (5th Cir. 1966), other courts have taken a different view. See also Donovan v. Rose Law Firm, 768 F.2d 964, 970 (8th Cir. 1985) (“we note initially that a reading of the language of §§ 203(b) and (c) does not plainly indicate which interpretation here advocated is to be preferred.”). Different courts of appeals have reached different conclusions on this question. Compare Fowler, 372 F.2d at 330 (adopting the former approach); Donovan v. Master Printers Ass'n, 532 F. Supp. 1140, 1145 (1981), adopted by Master Printers Ass'n v. Donovan, 699 F.2d 370 (same); Douglas v. Wirtz, 353 F.2d 30, 32 (4th Cir. 1965) (same); Humphreys, Hutcheson & Moseley v. Donovan, 755 F.2d 1211 (6th Cir. 1985) (same) with Rose Law Firm, 768 F.2d at 973 (adopting the latter approach).

Shortly after it was issued, the Rule was challenged in three district courts, and the challengers sought preliminary injunctive relief. Associated Builders & Contractors of Arkansas v. Perez (E.D. Ark. 4:16-cv-169); Labnet Inc. v. United States Department of Labor (D. Minn. 0:16-cv-00844); National Federal of Independent Business v. Perez (N.D. Tex. 5: l 6-cv-00066-c). On June 22, 2016, the Minnesota court denied the challengers' request for preliminary relief, though the court expressed doubt about some potential applications of the rule. 197 F. Supp. 3d 1159 (D. Minn. 2016). On June 27, 2016, the Texas court granted the challengers' 4 motion, adopting their proposed order, and issuing a nationwide injunction against implementation of the Persuader Rule. NFIB, Slip Op. p.89-90; 2016 WL 3766121 (hereafter “NFIB PI Order”). The preliminary injunction was made permanent by order of November 16, 2016. 2016 WL 8193279. The matter before the Arkansas court has been stayed, and the court has not issued any substantive rulings. See Associated Builders & Contractors Dkt. No. 80 (Dec. 13, 2016).

The court's decision in NFIB was premised in significant part on its conclusion that the “advice” exception could be meaningful only if there were some activities that had an object to persuade but were nonetheless exempt as advice. The District of Minnesota court, though rejecting a facial challenge to the rule, also expressed concern that the Rule was problematic in some applications because of “its insistence that persuader activity and advice are mutually exclusive categories.” Labnet, Inc., 197 F. Supp. 3d at 1168.

In the preamble to the 2016 Rule, the Department listed activities that it considered not to be reportable. See 81 FR 15939. These activities consisted of situations where a consultant: (1) Provides legal advice or other legal services (such as representing an employer in court or during collective bargaining) (id. at 15949); (2) offers a persuader-services sales pitch (id. at 15978); (3) conducts a vulnerability assessment or a survey (other than a push survey, i.e. one designed to influence participants and thus undertaken with an object to persuade) (id.); (4) revises materials, if the revisions are to ensure legality, clarity or grammatical correctness, not to increase the persuasiveness (id. at 15938); (5) develops or implements personnel policies or actions that improve employee pay, benefits, or working conditions, without any object to persuade employees (id. at 15938 n. 26); (6) provides “off-the-shelf” materials to the employer (id. at 15938); or (7) conducts a seminar without developing or assisting the employer in developing tactics or strategies on the unionization (id. at 15938-39).

In setting forth this list, the Rule left unclear whether the activities were exempt as advice, were simply not persuader activities, or both. An activity may fall outside the compass of a statute or it may satisfy an exemption under the statute. Either way, no report is due. But further analysis of the reasons that activities are not reportable would provide further clarity to regulated entities and reviewing courts as they consider other circumstances in which reporting might or might not be required. The Department proposes rescinding the rule so that, if it elects to change the scope of reportable activity beyond what has been in place since 1962, it can provide as thorough an explanation of its statutory interpretation as possible.

B. The Department also proposes to rescind the Rule to allow the Department to consider the interaction between Form LM-20 and Form LM-21.

The obligation to file the Form LM-20 and the Form LM-21 result from the same event: Persuader activity.

Section 203(b) sets forth the statutory basis for the Form LM-21. That section requires every person who engages in persuader activities to file annually a report with the Secretary containing a statement of the person's “receipts of any kind from employers on account of labor relations advice or services, designating the sources thereof,” and a statement of its disbursements of any kind, in connection with those services and their purposes. See also 29 CFR 406.3 (Form LM-21 requirements). 57 FR 15929. Thus, by statute the requirement to file a Form LM-20 invariably necessitates the obligation to file a Form LM-21, so long as any disbursement is made pursuant to the reportable persuader agreement or arrangement.

Accordingly, an increase in the range and number of activities that constitute “persuader activity” will increase both the number of Form LM-20 filers and Form LM-21 filers. Each form imposes a unique recordkeeping and reporting burden on the filer. For example, a law firm that contracts with an employer and engages in persuader activity under the Rule will have to file a Form LM-20 disclosing the arrangement with the employer, among other information. The consultant/law firm would also have to file a Form LM-21 on which it reported receipts from all employers in connection with labor relations advice or services regardless of the purpose of the advice or service. It would also report in the aggregate the total amount of the disbursements made from such receipts, with a breakdown by office and administrative expenses, publicity, fees for professional service, loans, and other disbursement categories. The filer would also itemize each persuader-related disbursement, the recipient of the disbursement, and the purpose of the disbursement. Its disbursements to officers and employees would be disclosed when made in connection with labor relations advice or services.

The 2016 Rule made some labor relations consultants and employers who had previously not been required to file under the LMRDA responsible for filing under the LMRDA—both forms LM-20 and LM-21. The Department recognized and considered the effect of the burden arising from the Form LM-20. But it chose to defer consideration of Form LM-21 issues to a separate rulemaking—one that concerned only the Form LM-21.

Deferral of consideration of Form LM-21 issues was motivated, in part, by the Department's intention to engage in parallel rulemaking for reform of the scope and detail of the Form LM-21. 57 FR 15992, fn 88. The Department also issued a separate special enforcement policy that addressed the potential that new filers might have unique difficulties in filing the Form LM-21. https://www.dol.gov/olms/regs/compliance/ecr/lm21_specialenforce.htm. Under that special enforcement policy, the filers of Form LM-20 who must also file a Form LM-21 are not required to complete two parts of the LM-21.

As of the date of this NPRM, due to shifting priorities and resource constraints, no proposal has been issued regarding Form LM-21. Although the enforcement policy addressed the immediate effects of the Rule at issue here on Form LM-21 filers, delays in a more plenary consideration of those issues weigh in favor of rescinding the Rule so that the consequences for both forms could be considered together in any future rulemaking, should the Department elect to change the reporting requirement.

C. The Department proposes to rescind the Rule to allow more detailed consideration of attorneys' activities.

Regulated entities have expressed concerns about the interaction between the new categories of “indirect” persuasion that were created by the rule and the role of attorneys in advising their clients. The new categories of “indirect” persuasion include:

• Drafting, revising, or providing written materials for presentation, dissemination, or distribution to employees;

• Drafting, revising, or providing a speech for presentation to employees;

• Drafting, revising, or providing audiovisual or multi-media presentations for presentation, dissemination, or distribution to employees;

• Drafting, revising or providing Web site content for employees;

• Training supervisors or employer representatives to conduct individual or group employee meetings;

• Coordinating or directing the activities of supervisors or employer representatives;

• Developing employer personnel policies or practices;

• Conducting a seminar for supervisors or employer representatives; etc.

81 FR 16051. Although the Department gave some general consideration to concerns that the Rule would have a “chilling effect” on clients' abilities to obtain representation by attorneys, 81 FR 15999, the Department believes that the implementation of any changed reporting requirement in this area should include a more detailed and specific analysis of how each of these activities would, as a practical and factual matter, affect the behavior of the regulated community, with regard to furnishing and receiving legal services.

D. The Department proposes to rescind the Rule in light of limited resources and competing priorities.

In rejecting a challenge to the Department's prior interpretation—that a consultant incurs a reporting obligation only when it directly communicates with employees with an object to persuade them—the U.S. Court of Appeals for the D.C. Circuit relied expressly on the Department's “right to shape [its] enforcement policy to the realities of limited resources and competing priorities.” International Union, United Auto., Aerospace & Agr. Implement Workers of Am. v. Dole, 869 F.2d 616, 620 (D.C. Cir. 1989). The Department's resource constraints weigh in favor of rescinding the Rule. Under the prior interpretation, there are significantly fewer reports, which reduces the investigative resources devoted to enforcing the rules on filing timely and complete reports. Further, under the prior interpretation, those case investigations generally involve obtaining and reviewing the written agreement and interviewing employees only. In contrast, enforcement of the Rule would likely involve a lengthier and more complicated investigation, examining in more detail the actions of consultants and their interaction with the employers' supervisors and other representatives. The investigator would be required to review both the direct reporting category and the four indirect persuader categories. This is a more resource-intensive process, and the Department wishes to consider whether there are more productive uses for its limited resources.

If the Rule is rescinded, as proposed here, the reporting requirements in effect would be the requirements as they existed before the Rule. The Forms and Instructions, available on the Department's Web site, will be those pre-existing the Rule. These are also the Forms and Instructions currently being used by filers, in light of the litigation and court order discussed in section 2(A), above. See National Federal of Independent Business v. Perez (N.D. Tex. 5:l6-cv-00066-c), Slip Op. p.89-90; 2016 WL 3766121; 2016 WL 8193279.

Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget (OMB).

The 2016 Final Rule was enjoined before it became applicable, so if the impacts of this NPRM are assessed relative to current practice, the results would be negligible. If, on the other hand, the NPRM's effects are assessed relative to a baseline in which regulated entities comply with the 2016 Final Rule, the rescission would result in annual cost savings of $1,198,714.50.

Specifically, in the most recent Information Collection Request (ICR) for the pre-2016 Form LM-20, the Department estimated 387 Form LM-20 reports would be filed annually. 81 FR 15929, 16009. This estimate was raised to 4,194 reports for the 2016 Rule, with a total annual cost of $633,932.16. 81 FR 16015 (Table 5). The Department returns to the 387 figure, which is $13,130 in total annual costs, as estimated in the accompanying ICR submission to OIRA. The total annual cost savings relating the rescission of the Form LM-20 is therefore $620,802.16 ($633,932.16−$13,130 = $620,802.16).

In the most recent ICR for the pre-2016 Form LM-10, the Department estimated 957 Form LM-10 reports would be filed annually. 81 FR 15929. This estimate was raised to 2,777 reports for the 2016 Rule, with a total annual cost of $629,567.34. 81 FR 16015 (Table 5). The Department returns to the 957 figure, which is $51,655 as estimated in the accompanying ICR submission to OIRA. The total annual cost savings relating the rescission of the Form LM-10 is $577,912.34 ($629,567.34−$51,655 = $577,912.34)

Thus, the total savings from rescission of Form LM-10 and Form LM-20 is $1,198,714.50 ($620,802.16 + $577,912.34 = $1,198,714.50). Additionally, the Department returns to its previous estimate of 22 minutes of reporting and recordkeeping burden per Form LM-20 form, as opposed to the 98 minutes in the 2016 Rule. See 81 FR 15929, 16014, and 16015, Table 5. The Department returns to its previous estimate of 35 minutes for reporting and recordkeeping burden per Form LM-10 form, as opposed to the 147 minutes in the 2016 Rule. See 81 FR 15929 and 16015, Table 5. Finally, the Department downward adjusts the number of Form LM-21 reports from 258, as estimated under the 2016 Rule, to the pre-2016 level of 72. We note that the analysis of the 2016 final rule, which is the source of these estimates, did not include an overhead labor cost. There are several approaches to look at the cost elements that fit the definition of overhead and there are a range of overhead estimates—from 17 percent by the Environmental Protection Agency to an average of 77 percent by government contractors.

The 2016 Rule described qualitative benefits arising from the rule, stating that it “promotes the important interests of the Government and the public by ensuring that employees will be better informed and thus better able to exercise their rights.” 57 FR 15929. These benefits were not quantified. As described above, the Department proposes to rescind the Rule to provide the Department with an opportunity to give more consideration to several important effects of modifying the scope of reporting on regulated parties. This consideration will include both benefits and burdens.

Consistent with Executive Order 13771 (82 FR 9339, February 3, 2017), and as explained above in the Executive Order 12866 section, we have estimated the costs for this proposed rule to result in an annual savings of $1,198,714.50 In the most recent Information Collection Request (ICR) for the pre-2016 Form LM-20, the Department estimated 387 Form LM-20 reports would be filed annually. This estimate was raised to 4,194 reports for the 2016 Rule. The Department returns to the 387 figure. Additionally, the Department returns to its previous estimate of 22 minutes of reporting and recordkeeping burden per Form LM-20 form, as opposed to the 98 minutes in the 2016 rule. See 81 FR 15929, 16014, and 16015, Table 5.

In its most recent ICR for the pre-2016 Form LM-10, the Department estimated 957 Form LM-10 reports. Thus, the Department adjusts to 957 the Form LM-10 estimate of 2,777 reports set forth in the 2016 Rule. Additionally, the Department returns to its previous estimate of 35 minutes for reporting and recordkeeping burden per Form LM-10 form, as opposed to the 147 minutes in the 2016 Rule. See 81 FR 15929 and 16015, Table 5. Finally, the Department downward adjusts the number of Form LM-21 reports from 258, as estimated under the 2016 Rule, to the pre-2016 level of 72. Therefore, this action is expected to be an Executive Order 13771 deregulatory action.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601 et seq., requires agencies to prepare regulatory flexibility analyses, and to develop alternatives wherever possible, in drafting regulations that will have a significant impact on a substantial number of small entities. The Department does not believe that this proposed rule will have a significant economic impact on a substantial number of small entities, as the rule contains no collection of information and relieves the additional burden imposed upon employers and labor relations consultants through the rescission of the regulations published on Mar. 24, 2016. See 81 FR 15924. Therefore, a regulatory flexibility analysis under the Regulatory Flexibility Act is not required. The Secretary has certified this conclusion to the Chief Counsel for Advocacy of the Small Business Administration.

This proposed rule will not include any Federal mandate that may result in increased expenditures by State, local, and tribal governments, in the aggregate, of $100 million or more, or in increased expenditures by the private sector of $100 million or more.

The Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., provides that no person is required to respond to a collection of information unless it displays a valid OMB control number. In order to obtain PRA approval, a Federal agency must engage in a number of steps, including estimating the burden the collection places on the public and seeking public input on the proposed information collection.

This proposed rule contains no new information collection requirements for purposes of the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.). The Department notes that, consistent with the previously mentioned injunction, the agency already amended the information collection approval for Forms LM-10 and LM-20 and their instructions to reapply the pre-2016 versions. When issuing its approval, the OMB issued clearance terms providing the previously approved versions of these forms will remain effect until further notice. See ICR Reference Number 201604-1245-001.

As the proposed rule still contains an information collection, the Department is submitting, contemporaneous with the publication of this notice, an information collection request (ICR) to revise the PRA clearance to address the clearance term. A copy of this ICR, with applicable supporting documentation, including among other things a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov Web site at http://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201705-1245-001 (this link will only become active on the day following publication of this notice) or from the Department by contacting Andrew Davis on 202-693-0123 (this is not a toll-free number)/ email: [email protected].

In addition to submitting comments on the information collections contained in this proposed rule or otherwise covered by the ICR directly to the Department, as discussed in the addresses portion of this preamble, written views about the request may also be submitted directly by mail to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-OLMS, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202-395-6881 (this is not a toll-free number); or by email: [email protected]. Please note that comments submitted in response to this notice will be made a matter of public record and may be posted into the docket without redaction. The Department strongly encourages commenters not to include sensitive information such social security numbers or confidential business information in any comment.

The Department and OMB are particularly interested in comments that:

• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

• Evaluate the accuracy of the agency's estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;

• Enhance the quality, utility, and clarity of the information to be collected; and

• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., by permitting electronic submission of responses.

Type of Review: Revision of a currently approved collection.

Agency: Office of Labor-Management Standards.

Title: Labor Organization and Auxiliary Reports.

OMB Number: 1245-0003.

Affected Public: Private Sector—businesses or other for-profits and not-for-profit institutions.

Number of Annual Responses: 31,501

Frequency of Response: Varies.

Estimated Total Annual Burden Hours: 4,580,114.45.

Estimated Total Annual Other Burden Cost: $0.

This proposed rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of the United States-based companies to compete with foreign-based companies in domestic and export markets.

Accordingly, for the reasons stated herein, the Secretary proposes to amend parts 405 and 406 of title 29, chapter IV of the Code of Federal Regulations to read as the text at 29 CFR parts 405 and 406 (2015).

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

For the purpose of this document, we are giving meaning to certain words or initials as follows:

(i) The word or initials CAA mean or refer to the Clean Air Act, unless the context indicates otherwise.

(ii) The initials CARB mean or refer to the California Air Resources Board.

(iii) The initials CFR mean or refer to Code of Federal Regulations.

(iv) The initials or words EPA, we, us or our mean or refer to the United States Environmental Protection Agency.

(v) The word or initials ICAPCD or District mean or refer to the Imperial County Air Pollution Control District, the agency with jurisdiction over stationary sources within Imperial County.

(vi) The initials NSR mean or refer to New Source Review.

(vii) The initials SIP mean or refer to State Implementation Plan.

Table 1 lists the rule addressed by this action with the date that it was adopted by ICAPCD and submitted by the California Air Resources Board (CARB), which is the governor's designee for California SIP submittals.

On March 7, 2014, EPA determined that the submittal for ICAPCD Rule 207 (New and Modified Stationary Source Review) met the completeness criteria in 40 CFR part 51 Appendix V. On December 19, 2016, the EPA proposed a limited approval and limited disapproval (LA/LD) of Rule 207 along with a full approval of two rules—Rule 204 (Applications) and Rule 206 (Processing of Applications). 81 FR 91895. In a separate rulemaking action, we are finalizing our approval of Rules 204 and 206. We are not finalizing our proposed LA/LD of Rule 207; instead, we are proceeding with this proposed action to conditionally approve Rule 207 into the SIP.

EPA approved a previous version of Rule 207 into the SIP on November 10, 1980 (45 FR 74480). In addition, SIP-approved Rule 209 (Implementation Plans) and submitted Rule 207, section D.1.a, contain substantially similar language. See 45 FR 74480 (November 10, 1980).1

Submission of Comments: All submissions received must include the Agency name CMS-9928-NC for this notice. All comments received may be posted without change to http://www.regulations.gov, including any personal information provided.

On January 20, 2017, President Trump issued Executive Order 13765, “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal,” to minimize the unwarranted economic and regulatory burdens of the Patient Protection and Affordable Care Act (PPACA) (Pub. L. 111-148). To meet these objectives, the President directed the Secretary of Health and Human Services (the Secretary) and the heads of all other executive departments and agencies with authorities and responsibilities under the PPACA, to the maximum extent permitted by law, to afford the States more flexibility and control to create a more free and open health care market; provide relief from any provision or requirement of the PPACA that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, health care providers, health insurers, patients, recipients of health care services, purchasers of health insurance, or makers of medical devices, products, or medications; provide greater flexibility to States and cooperate with them in implementing health care programs; and encourage the development of a free and open market in interstate commerce for the offering of health care services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.

The Department of Health and Human Services (HHS) is the federal government's principal agency charged with protecting the health of all Americans and providing essential human services. HHS's responsibilities include Medicare, Medicaid, increasing access to care and private health coverage, support for public health preparedness and emergency response, biomedical research, substance abuse and mental health treatment and prevention, assurance of safe and effective drugs and other medical products, protection of our Nation's food supply, assistance to low income families, the Head Start program, services to older Americans, and direct health services delivery. HHS is comprised of staff divisions and operating divisions, many of which are responsible for promulgating regulations pursuant to HHS's statutory authority.

Among HHS's goals is to establish a robust and resilient framework for each HHS division to undertake a periodic, thoughtful analysis of its significant existing regulations issued under Title I of the PPACA, to determine whether each rule advances or impedes HHS priorities of stabilizing the individual and small group health insurance markets; empowering patients and promoting consumer choice; enhancing affordability; and returning regulatory authority to the States. We seek public input on changes that could be made, consistent with current law, to existing regulations under HHS's jurisdiction that would result in a more streamlined, flexible, and less burdensome regulatory structure, including identifying regulations that eliminate jobs or inhibit job creation; are outdated, unnecessary, or ineffective; impose costs that exceed benefits; or create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies.

Since the first weeks of the Administration, HHS has worked to reduce burdens and improve health insurance options under the provisions of Title I of the PPACA for which HHS has jurisdiction. On February 17, 2017, HHS published a proposed rule in the Federal Register entitled, “Patient Protection and Affordable Care Act; Market Stabilization,” (82 FR 10980) containing regulatory changes that are critical to stabilizing the individual and small group health insurance markets. After receiving and considering public comment, HHS published the Patient Protection and Affordable Care Act; Market Stabilization Final rule on April 18, 2017 (82 FR 18346). The new rules will place downward pressure on premiums, curb abuses, and encourage full-year enrollment by expanding pre-enrollment verification of eligibility for new exchange enrollees using special enrollment periods; encourage patients to avoid coverage lapses; provide greater flexibility to issuers related to actuarial value of plans; return to the States the authority and means to assess issuer network adequacy; revise the timeline for qualified health plan (QHP) certification and rate review to give issuers flexibility to incorporate benefit changes and maximize the number of coverage options available to patients; and more closely align the open enrollment period for the individual market with the employer-sponsored insurance market and Medicare, thus helping to lower prices for Americans by reducing adverse selection. We have also taken a number of other steps to reduce burden, improve choices, and stabilize the insurance market:

• Issued guidance announcing HHS's intent to propose new health coverage enrollment options for small businesses enrolling through the Federally-facilitated Small Business Health Options Program (FF-SHOP), reducing burdens and making it easier for small employers and their employees to purchase coverage.

• Announced a new streamlined and simplified direct enrollment process for consumers signing up for individual market coverage with the assistance of web-brokers or issuers in states with Exchanges that rely on HealthCare.gov for their eligibility and enrollment functions.

• Issued guidance to States explaining their freedom to seek innovative approaches to lowering premiums and protecting consumers via State innovation waivers under section 1332 of the PPACA, which included new information to help states seek waivers from requirements in Title I of the PPACA, and establish high-risk pools/state-operated reinsurance programs.

• Extended the HHS Risk Adjustment and Data Validation (HHS-RADV) pilot by another year, providing needed flexibility for issuers to adapt to the new HHS-RADV audit tool and protocols to ensure that lessons learned from the first pilot year are implemented effectively, and enabling the Centers for Medicaid & Medicare Services (CMS) to ensure that issuers are compliant with all HHS-RADV requirements, increasing the stability of the markets and the integrity of risk adjustment transfers.

• Adjusted the QHP certification calendar, to provide issuers additional time to prepare and States additional time to review 2018 products and rates with greater certainty in response to recent policy changes.

• Issued guidance to issuers allowing patients to keep their transitional individual and small group insurance plans in 2018.

These initial steps will help issuers and States work with HHS to achieve shared goals, including stabilizing the individual and small group health insurance markets; empowering patients and promoting consumer choice; enhancing affordability; and affirming the traditional authority of the States in regulating the business of health insurance. In this Request for Information, HHS now seeks input from the public on other changes within its authority and consistent with the law to further achieve these aims.

HHS is interested in soliciting public comments about changes to existing regulations or guidance, or other actions within HHS's authority, that could further the following goals with respect to the individual and small group health insurance markets:

1. Empowering patients and promoting consumer choice. What activities would best inform consumers and help them choose a plan that best meets their needs? Which regulations currently reduce consumer choices of how to finance their health care and health insurance needs? Choice includes the freedom to choose how to finance one's healthcare, which insurer to use, and which provider to use.

2. Stabilizing the individual, small group, and non-traditional health insurance markets. What changes would bring stability to the risk pool, promote continuous coverage, increase the number of younger and healthier consumers purchasing plans, reduce uncertainty and volatility, and encourage uninsured individuals to buy coverage?

3. Enhancing affordability. What steps can HHS take to enhance the affordability of coverage for individual consumers and small businesses?

4. Affirming the traditional regulatory authority of the States in regulating the business of health insurance. Which HHS regulations or policies have impeded or unnecessarily interfered with States' primary role in regulating the health insurance markets they know best?

This is a request for information only. Respondents are encouraged to provide complete but concise responses to the questions outlined above. We note that a response to every question is not required. This request for information is issued solely for information and planning purposes; it does not constitute a notice of proposed rulemaking or request for proposals, applications, proposal abstracts, or quotations. This request for information does not commit the United States Government (“Government”) to contract for any supplies or services or make a grant award. Further, HHS is not seeking proposals through this request for information and will not accept unsolicited proposals. Respondents are advised that the Government will not pay for any information or administrative costs incurred in response to this request for information; all costs associated with responding to this request for information will be solely at the interested party's expense. Not responding to this request for information does not preclude participation in any future rulemaking or procurement, if conducted. It is the responsibility of the potential responders to monitor this request for information announcement for additional information pertaining to this request. We also note that HHS will not respond to questions about the policy issues raised in this request for information. HHS may or may not choose to contact individual responders. Such communications would only serve to further clarify written responses. Contractor support personnel may be used to review request for information responses. Responses to this notice are not offers and cannot be accepted by the Government to form a binding contract or issue a grant. Information obtained as a result of this request for information may be used by the Government for program planning on a non-attribution basis. Respondents should not include any information that might be considered proprietary or confidential. This request for information should not be construed as a commitment or authorization to incur cost for which reimbursement would be required or sought. All submissions become Government property and will not be returned. HHS may publically post the comments received, or a summary thereof. While responses to this request for information do not bind HHS to any further actions related to the response, all submissions will be made publicly available on http://www.regulations.gov.

This document does not impose information collection requirements, that is, reporting, recordkeeping or third-party disclosure requirements. This request for information constitutes a general solicitation of comments. In accordance with the implementing regulations of the Paperwork Reduction Act (PRA) at 5 CFR 1320.3(h)(4), information subject to the PRA does not generally include “facts or opinions submitted in response to general solicitations of comments from the public, published in the Federal Register or other publications, regardless of the form or format thereof, provided that no person is required to supply specific information pertaining to the commenter, other than that necessary for self-identification, as a condition of the agency's full consideration of the comment.” Consequently, this document need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

This is a synopsis of the Commission's Order, MB Docket No. 11-54, adopted May 25, 20017, and released May 25, 2017. The full text of this document is available for public inspection and copying during normal business hours in the FCC's Reference Information Center at Portals II, CY-A257, 445 12th Street SW., Washington, DC, 20554. This document will also be available via ECFS (http://fjallfoss.fcc.gov/ecfs/). To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to [email protected] or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). Provisions of the Regulatory Flexibility Act of 1980, see 5 U.S.C. 601-612, do not apply to this proceeding.

The Commission will send a copy of this Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

I. Public Participation and Request for Comments A. Submitting Comments

If you submit a comment, please include the docket number for this NPRM (Docket No. FMCSA-2016-0346), indicate the specific section of this document to which each section applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.

To submit your comment online, go to http://www.regulations.gov, put the docket number, FMCSA-2016-0346, in the keyword box, and click “Search.” When the new screen appears, click on the “Comment Now!” button and type your comment into the text box on the following screen. Choose whether you are submitting your comment as an individual or on behalf of a third party and then submit.

If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 81/2 by 11 inches, suitable for copying and electronic filing. If you submit comments by mail and would like to know that they reached the facility, please enclose a stamped, self-addressed postcard or envelope.

FMCSA will consider all comments and material received during the comment period and may change this proposed rule based on your comments. FMCSA may issue a final rule at any time after the close of the comment period.

Confidential Business Information (CBI) is commercial or financial information that is customarily not made available to the general public by the submitter. Under the Freedom of Information Act, CBI is eligible for protection from public disclosure. If you have CBI that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Accordingly, please mark each page of your submission as “confidential” or “CBI.” Submissions designated as CBI and meeting the definition noted above will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Brian Dahlin, Chief, Regulatory Analysis Division, 1200 New Jersey Avenue SE., Washington, DC 20590. Any commentary that FMCSA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.

FMCSA will consider all comments and material received during the comment period.

To view comments, as well as any documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov. Insert the docket number, FMCSA-2016-0346, in the keyword box, and click “Search.” Next, click the “Open Docket Folder” button and choose the document to review. If you do not have access to the Internet, you may view the docket online by visiting the Docket Management Facility in Room W12-140 on the ground floor of the DOT West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL-14 FDMS), which can be reviewed at www.dot.gov/privacy.

Under the Fixing America's Surface Transportation Act (FAST Act) (Pub. L. 114-94), FMCSA is required to publish an advance notice of proposed rulemaking (ANPRM) or conduct a negotiated rulemaking “if a proposed rule is likely to lead to the promulgation of a major rule” (49 U.S.C. 31136(g)(1)). As this proposed rule is not likely to result in the promulgation of a major rule, the Agency is not required to issue an ANPRM or to proceed with a negotiated rulemaking.

If you have comments on the collection of information discussed in this NPRM, you must send those comments to the Office of Information and Regulatory Affairs at OMB. To ensure that your comments are received on time, the preferred methods of submission are by email to [email protected] (include docket number “FMCSA-2016-0346” and “Attention: Desk Officer for FMCSA, DOT” in the subject line of the email) or fax at 202-395-6566. An alternative, though slower, method is by U.S. Mail to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street NW., Washington, DC 20503, ATTN: Desk Officer, FMCSA, DOT.

This NPRM would allow States to issue a CLP for no more than one year from the date of initial issuance, with or without renewal within that one-year period. After one year from the date of initial issuance, a CLP, or renewed CLP, would no longer be valid. Accordingly, if the applicant does not obtain a CDL within one year from the date the CLP was first issued, he/she must reapply for a CLP. This approach would replace the current requirements of §§ 383.25(c) and 383.73(a)(2)(iii), under which a CLP is valid for no more than 180 days from the date of issuance, with an option for the State to renew the CLP for an additional 180 days without requiring the general and endorsement knowledge tests, as applicable. The proposed change provides an improved process for CLP issuance that FMCSA believes will save time and money for both States and CLP applicants, as discussed below, without affecting safety.

The primary entities affected by this proposed rule would be State Driver Licensing Agencies (SDLAs) and CLP holders. FMCSA is unable to estimate the number of SDLAs that may choose to issue a CLP that is valid for up to one year or the number of CLP holders that would be affected. Nonetheless, potential benefits of this proposed rule would include reduced costs to CLP holders, including reductions in the opportunity cost of time that, in the absence of this proposed rule, would be spent by CLP holders traveling to and from an SDLA office and at an SDLA office, renewing a CLP that is valid for no more than 180 days. SDLAs that choose under this proposed rule to issue a CLP that is valid for up to one year may benefit from the elimination of costs associated with processing renewals of CLPs. FMCSA does not expect there would be any costs imposed upon CLP holders as a result of this rule. Under this proposed rule SDLAs that choose to offer a CLP that is valid for up to one year may incur costs related to information technology (IT) system upgrades that may be necessary.

Although potential reductions in CLP renewal fees collected by SDLAs may appear to be a cost of this proposed rule to SDLAs, and the commensurate potential savings to CLP holders of CLP renewal fees may appear to be a benefit to CLP holders, any such changes in renewal fee amounts are best classified as transfer payments and not as a cost to SDLAs (in the form of forgone fee revenue) or as a benefit to CLP holders (in the form of CLP renewal fees no longer expended). If an SDLA were to increase its fee for the issuance of a CLP in order to offset any reduction in revenue resulting from the elimination of CLP renewals and associated fees, a transfer would occur from those CLP holders who, in the absence of the rule, would not have renewed their CLP to CLP holders who would have renewed their CLP.

This rulemaking is based on the broad authority of the Commercial Motor Vehicle Safety Act of 1986 (CMVSA), as amended, codified at 49 U.S.C. chapter 313 and implemented by 49 CFR parts 383 and 384. The CMVSA provides that “[a]fter consultation with the States, the Secretary of Transportation shall prescribe regulations on minimum uniform standards for the issuance of commercial drivers' licenses and learner's permits by the States . . .” (49 U.S.C. 31308).

On September 1, 2015, the Oregon Department of Transportation (ODOT) requested an exemption from § 383.25(c) to allow a CLP to be issued for one year. Currently the regulation provides that the CLP must be valid for no more than 180 days from the date of issuance. However, under §§ 383.25(c) and 383.73(a)(2)(iii), the State may renew the CLP for an additional 180 days without requiring the CLP holder to retake the general and endorsement knowledge tests. In its request for the exemption, ODOT stated that “[a]dding the bureaucratic requirement for a CLP holder to visit a DMV office and pay a fee in order to get a second six months of CLP validity will add unnecessary workload to offices already stretched to the limit.”

On November 27, 2015, FMCSA published notice of ODOT's application for exemption and requested public comments (80 FR 74199). The Agency received 10 comments in response to the proposed exemption. The Alabama Law Enforcement Agency; Colorado Department of Revenue CDL Unit; New York Department of Motor Vehicles; Oregon Trucking Associations, Inc.; and two individuals supported the exemption. The Commercial Vehicle Training Association (CVTA) and three individuals opposed the exemption.

In a notice published on April 5, 2016 (81 FR 19703), FMCSA stated that the exemption requested by the ODOT would maintain a level of safety equivalent to or greater than the level of safety that would be achieved without the exemption, as required by 49 CFR 381.305(a). The Agency therefore approved ODOT's application for exemption and allowed all SDLAs nationwide to use the exemption at their discretion. However, the exemption did not change the language of § 383.25(c) and the exemption remains effective for 2 years from the date of approval, expiring on April 5, 2018. Subsequent to FMCSA's approval of ODOT's application, the Agency amended its Notice of Final Disposition to also include exemption from the parallel requirements of § 373.73(a)(2)(iii) (81 FR 86067 (November 29, 2016)).

This proposed rule would amend §§ 383.25 (c) and 383.73(a)(2)(iii) to allow States to issue a CLP for no more than one year, without requiring the CLP holder to retake the general and endorsement knowledge tests. The Agency proposes a maximum period of CLP validity of one year, rather than the 360-day maximum currently permitted under §§ 383.25(c) and 383.73(a)(2)(iii). The principal reason for this proposed change, as noted above and discussed further below, is to increase efficiency in the licensing system and to reduce costs to drivers and administrative burdens to SDLAs. FMCSA is also proposing the rule, however, in order to account for the fact that, in practice, some States allow a “grace period” between the initial CLP issuance period of 180 days and the 180-day renewal period currently allowed, thus resulting in a total period of time which may exceed 360 days from the time of initial issuance of the CLP. States that choose to issue a CLP for an initial period of less than one year may provide for renewal, as long as the renewed CLP is not valid for more than one year from the date of initial issuance of the original CLP. For example, under the proposed change, a State could issue a CLP that is valid for nine months. If that State chose to allow the CLP holder to renew the CLP, the renewal could not be valid for longer than three months, up to a total period of one year from the date of initial issuance.

The Agency invites States and other interested parties to identify potential costs (e.g., necessary changes in CLP-related IT systems), savings and process efficiencies that may result from the proposed change, along with any supporting data.

FMCSA proposes to amend part 383 in the following ways:

In § 383.25(c) FMCSA makes minor changes to the text and replaces “180 days” with “one year” to reflect the proposed extended period of time that a CLP can be valid before a CLP holder would have to re-test. FMCSA also provides for renewal of CLPs that have been issued for a period of less than a year.

In § 383.73(a)(2)(iii) FMCSA makes minor changes to the text and replaces “180 days” with “one year” to clarify in the instructions to States the proposed extended period of time that a CLP can be valid before a CLP holder would have to re-test. FMCSA also provides for renewal of CLPs that have been issued for a period of less than a year.

This NPRM is not a significant regulatory action under section 3(f) of Executive Order (E.O.) 12866 (58 FR 51735, October 4, 1993), Regulatory Planning and Review, as supplemented by E.O. 13563 (76 FR 3821, January 21, 2011), Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(4) of that Order. It is also not significant within the meaning of DOT regulatory policies and procedures (DOT Order 2100.5 dated May 22, 1980; 44 FR 11034, February 26, 1979). Accordingly, the Office of Management and Budget has not reviewed it under these Orders. This proposed rule would amend existing procedures and practices governing the issuance of commercial learner's permits.

This proposed rule allows States to issue a CLP that is valid for no more than one year from the date of initial issuance, with or without renewal during that one-year period. This approach would replace the current requirements, as set forth in §§ 383.25(c) and 383.73(a)(2)(iii), which require that a CLP must be valid for no more than 180 days from the date of issuance, with an additional 180-day renewal possible at the State's discretion.

The primary entities affected by this proposed rule would be SDLAs and CLP holders. FMCSA is unable to estimate how many of the 51 SDLAs may choose under this proposed rule to issue a CLP that is valid for up to one year. The number of SDLAs that have thus far chosen to issue a CLP that is valid for one year from the date of issuance without renewal, consistent with the exemption to § 383.25(c) issued on April 5, 2016 (81 FR 19703), is unknown.1 FMCSA seeks any information available in this regard.

FMCSA estimates that approximately 476,000 CLPs are issued annually nationwide. This estimate is based primarily on information from the Commercial Driver's License Information System (CDLIS), a nationwide computer system that enables SDLAs to ensure that each commercial driver has only one driver's license and one complete driver record. Data provided by the American Association of Motor Vehicle Administrators (AAMVA) for the three calendar years 2013 through 2015 indicate that approximately 476,000 new Master Pointer Records (MPRs) were added annually to CDLIS during that time.2 An MPR is typically added to CDLIS within 10 days of issuing a CLP to a driver who is believed to have never held one previously, or when a non-commercial driver is convicted of a violation in a commercial motor vehicle (CMV). FMCSA believes that the number of MPRs added to CDLIS for drivers without a CLP or CDL but that were convicted of a violation while driving a CMV is very small. To the extent this may occur, the 476,000 value noted above may slightly overestimate the actual number of CLPs issued annually. Conversely, due to certain record retention requirements of CDLIS, it may be possible that a CLP applicant already could have an MPR present in CDLIS (from a previous CDL or CLP that was held by that applicant and for which the MPR created remains in CDLIS for some time after the CLP or CDL has expired or otherwise is no longer in force). To the extent this occurs, the 476,000 value noted above may slightly underestimate the actual number of CLPs issued annually. Despite these potential sources of minor uncertainty, FMCSA believes that the estimate of approximately 476,000 CLPs currently issued annually nationwide is a reasonable one. The Agency specifically invites comment on the accuracy of this estimate. Of the estimated 476,000 CLPs issued annually, there is no readily available source of information regarding how many are renewed. We therefore seek comment and supporting information regarding the number of CLPs issued annually nationwide that are currently renewed. Because the Agency cannot currently quantify the number of CLPs issued annually that are renewed, nor the number of SDLAs that would choose to issue a CLP that is valid for up to one year from the date of issuance, FMCSA is unable to quantify the number of CLP holders who would be affected by this proposed rule.

Although FMCSA is unable to quantify the number of SDLAs that may choose to issue a CLP that is valid for up to one year or the number of CLP holders that would be affected by this proposed rule, there are certain types of benefits, costs, and transfers that may occur as a result of this rule.

The potential benefits of this proposed rule would include reduced costs to CLP holders, including reductions in the opportunity cost of time that in the absence of this proposed rule would be spent by CLP holders traveling to and from an SDLA office and at an SDLA office, renewing a CLP that is valid for no more than 180 days. Though potential savings to CLP holders of CLP renewal fees may also appear to be a benefit of this proposed rule, any such changes in renewal fee amounts are best classified as a transfer, which is discussed further below. SDLAs may also realize potential benefits. For example, for SDLAs that chose under this proposed rule to issue a CLP that is valid for up to one year, costs associated with processing renewals of CLPs would be eliminated. However, there may be transfer payments as discussed below. FMCSA seeks comment and any supporting information regarding the potential benefits of this proposed rule.

FMCSA does not expect there to be any costs imposed upon CLP holders as a result of this proposed rule. However, there may be transfer payments as discussed below. The potential costs of this proposed rule to SDLAs include information technology (IT) system upgrade costs for those SDLAs that choose to issue a CLP that is valid for up to one year. Such IT system upgrades may include software programming changes necessary to reflect a change from a CLP that is valid for up to 180 days to a CLP that is valid for up to one year. The State of Colorado noted the potential for such IT system costs to SDLAs in its comments to the November 27, 2015, notice of ODOT's application for exemption (80 FR 74199), as discussed in the Agency's grant of application for exemption published on April 5, 2016 (81 FR 19703). Under the proposed rule, the decision by an SDLA to issue a CLP that is valid for up to one year would be discretionary. Accordingly, the Agency expects that SDLAs will choose to make this change only to the extent that such IT system upgrade costs would be less than the reduced costs associated with no longer having to process renewals of CLPs, thus resulting in a net benefit to the SDLA.

Finally, though potential reductions in CLP renewal fees collected by SDLAs may appear to be a cost of this proposed rule to SDLAs, any such changes in renewal fee amounts are best classified as a transfer, which is discussed further below. FMCSA seeks comment on supporting information regarding the potential costs of this proposed rule.

In addition to the potential benefits and costs of the rule discussed above, there are also certain transfer payment effects that may occur as a result of this rule. Transfer payments are monetary payments from one group to another that do not affect total resources available to society, and therefore do not represent actual costs or benefits to society. Because of the potential elimination of CLP renewal fees, and the potential for changes to CLP issuance fees, there are transfer effects that may result from this rule. These potential transfer effects include a transfer of CLP renewal fee amounts from SDLAs to CLP holders, and a transfer of CLP renewal fee amounts from one set of CLP holders to another set of CLP holders. In cases where an SDLA maintains the same fee for issuance of a CLP, a transfer would occur from SDLAs to CLP holders. This transfer represents the total amount of CLP renewal fees that in the absence of this proposed rule CLP holders renewing their CLP would have paid SDLAs.3 Such reductions in CLP renewal fee amounts to SDLAs are properly classified as a transfer, rather than as a cost to SDLAs (in the form of forgone fee revenue) or as a benefit to CLP holders (in the form of CLP renewal fees no longer expended). There is no aggregate change in social welfare resulting from this impact, as it is a simple transfer of value from one set of entities to another. Alternatively, in cases where an SDLA were to increase its fee for the issuance of a CLP in order to offset any reduction in revenue resulting from the elimination of CLP renewals and associated fees, a transfer would occur from those CLP holders who in the baseline would not have renewed their CLP to CLP holders who in the baseline would have renewed their CLP.4 Here too there is no aggregate change in social welfare resulting from this impact, as again it is a simple transfer of value from one set of entities to another. In any case, the extent to which SDLAs that choose under this proposed rule to issue a CLP that is valid for up to one year may increase their fee for issuance of a CLP is unknown.5 The incentive for an SDLA to do so, however, is likely low due in part to the fact that CLP renewal fees are expected to be a relatively small proportion of the overall fee revenue collected by any given SDLA.

The Regulatory Flexibility Act of 1980 (RFA) (5 U.S.C. 601 et seq.), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) (Pub. L. 104-121, 110 Stat. 857), requires Federal agencies to consider the impact of their regulatory proposals on small entities, analyze effective alternatives that minimize small entity impacts, and make their analyses available for public comment. The term “small entities” means small businesses and not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations under 50,000.6 Accordingly, DOT policy requires an analysis of the impact of all regulations on small entities, and mandates that agencies strive to lessen any adverse effects on these entities.

When an agency issues a rulemaking proposal, the RFA requires the agency to “prepare and make available for public comment an initial regulatory flexibility analysis” which will “describe the impact of the proposed rule on small entities” (5 U.S.C. 603(a)). Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the proposed rulemaking is not expected to have a significant economic impact on a substantial number of small entities.

The primary entities affected by this proposed rule would be SDLAs and CLP holders. Under the standards of the RFA, as amended by the SBREFA, neither SDLAs nor CLP holders are small entities. SDLAs are not considered small entities because they do not meet the definition of a small entity in Section 601 of the RFA. Specifically, States are not considered small governmental jurisdictions under Section 601(5) of the RFA, both because State government is not included among the various levels of government listed in Section 601(5), and because, even if this were the case, no State nor the District of Columbia has a population of less than 50,000, which is the criterion by which a governmental jurisdiction is considered small under Section 601(5) of the RFA. CLP holders are not considered small entities because they too do not meet the definition of a small entity in Section 601 of the RFA. Specifically, CLP holders are considered neither a small business under Section 601(3) of the RFA, nor are they considered a small organization under Section 601(4) of the RFA. Therefore, this proposed rule will not have an impact on a substantial number of small entities.

In any case, this rule provides SDLAs the flexibility to choose whether to adopt the one-year CLP validity. As described in more detail earlier, because the decision by an SDLA to issue a CLP that is valid for up to one year is discretionary, the Agency expects that SDLAs will choose to make this change only to the extent that there is a net benefit to the SDLA. Furthermore, though there may be some transfer payment effects between certain types of CLP holders, these effects will not be significant. The Agency does not believe that there will be any costs imposed upon CLP holders as a result of this rule, and CLP holders would benefit from reductions in the opportunity cost of time that in the absence of this proposed rule would be spent by CLP holders traveling to and from an SDLA office and at an SDLA office renewing a CLP. Accordingly, I hereby certify that this proposed rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. FMCSA invites comment from anyone who believes there will be a significant impact on small entities from this action.

In accordance with section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, FMCSA wants to assist small entities in understanding this proposed rule so that they can better evaluate its effects on themselves and participate in the rulemaking initiative. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult the FMCSA point of contact, Selden Fritschner, listed in the FOR FURTHER INFORMATION CONTACT section of this proposed rule.

Small businesses may send comments on the actions of Federal employees who enforce or otherwise determine compliance with Federal regulations to the Small Business Administration's Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of FMCSA, call 1-888-REG-FAIR (1-888-734-3247). DOT has a policy regarding the rights of small entities to regulatory enforcement fairness and an explicit policy against retaliation for exercising these rights.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $156 million (which is the value equivalent of $100 million in 1995, adjusted for inflation to 2015 levels) or more in any one year. This proposed rule, which is a discretionary regulatory action, would not result in such an expenditure. Nevertheless, the Agency discusses the potential effects of this proposed rule elsewhere in this preamble.

This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for Federalism under Section 1(a) of E.O. 13132 if it has “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.”

FMCSA determined that this proposal would not have substantial direct costs on or for States, nor would it limit the policymaking discretion of States. This proposed rule does not preempt any State law or regulation. Therefore, this proposed rule does not have sufficient Federalism implications to warrant the preparation of a Federalism Impact Statement.

This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), requires agencies issuing “economically significant” rules, if the regulation also concerns an environmental health or safety risk that an agency has reason to believe may disproportionately affect children, to include an evaluation of the regulation's environmental health and safety effects on children. The Agency determined this proposed rule is not economically significant. Therefore, no analysis of the impacts on children is required. In any event, this regulatory action does not in any respect present an environmental health or safety risk that could disproportionately affect children.

FMCSA reviewed this proposed rule in accordance with E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights, and has determined it will not effect a taking of private property or otherwise have taking implications.

The Consolidated Appropriations Act, 2005, (Pub. L. 108-447, 118 Stat. 2809, 3268, 5 U.S.C. 552a note) requires the Agency to conduct a privacy impact assessment (PIA) of a regulation that will affect the privacy of individuals. Because this proposed rule does not require the collection of personally identifiable information (PII), the Agency is not required to conduct a PIA.

The E-Government Act of 2002, Public Law 107-347, § 208, 116 Stat. 2899, 2921 (Dec. 17, 2002), requires Federal agencies to conduct a PIA for new or substantially changed technology that collects, maintains, or disseminates information in an identifiable form. No new or substantially changed technology would collect, maintain, or disseminate information as a result of this rule. Accordingly, FMCSA has not conducted a PIA.

The regulations implementing E.O. 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this program.

FMCSA has analyzed this proposed rule under E.O. 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. The Agency has determined that the rule is not a “significant energy action” under that order because it is not a “significant regulatory action” likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, it does not require a Statement of Energy Effects under E.O. 13211.

This proposed rule does not have tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through OMB, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) are standards that are developed or adopted by voluntary consensus standards bodies. This proposed rule does not use technical standards. Therefore, FMCSA did not consider the use of voluntary consensus standards.

FMCSA analyzed this NPRM for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and determined this action is categorically excluded from further analysis and documentation in an environmental assessment or environmental impact statement under FMCSA Order 5610.1(69 FR 9680, March 1, 2004), Appendix 2, paragraph 6.t.(2). The Categorical Exclusion (CE) in paragraph 6.t.(2) includes regulations to ensure that the States comply with the provisions of the Commercial Motor Vehicle Safety Act of 1986. The requirements in this proposed rule are covered by this CE and the proposed action does not have a significant effect on the quality of the human environment. The CE determination is available for inspection or copying in the Federal eRulemaking Portal: http://www.regulations.gov.

FMCSA also analyzed this proposed rule under the Clean Air Act, as amended (CAA), section 176(c) (42 U.S.C. 7401 et seq.), and implementing regulations promulgated by the Environmental Protection Agency. Approval of this action is exempt from the CAA's general conformity requirement since it does not affect direct or indirect emissions of criteria pollutants.

Under E.O. 12898, each Federal agency must identify and address, as appropriate, “disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority populations and low-income populations” in the United States, its possessions, and territories. FMCSA evaluated the environmental justice effects of this proposed rule in accordance with the E.O., and has determined that no environmental justice issue is associated with this proposed rule, nor is there any collective environmental impact that would result from its promulgation.

In consideration of the foregoing, FMCSA proposes to amend 49 CFR chapter 3, part 383 to read as follows:

This notice of proposed rulemaking (NPRM) is organized as follows:

If you submit a comment, please include the docket number for this NPRM (Docket No. FMCSA-2017-0047), indicate the specific section of this document to which each section applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.

To submit your comment online, go to http://www.regulations.gov, put the docket number, FMCSA-2017-0047, in the keyword box, and click “Search.” When the new screen appears, click on the “Comment Now!” button and type your comment into the text box on the following screen. Choose whether you are submitting your comment as an individual or on behalf of a third party and then submit.

If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 81/2 by 11 inches, suitable for copying and electronic filing. If you submit comments by mail and would like to know that they reached the facility, please enclose a stamped, self-addressed postcard or envelope.

FMCSA will consider all comments and material received during the comment period and may change this proposed rule based on your comments. FMCSA may issue a final rule at any time after the close of the comment period.

To view comments, as well as any documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov. Insert the docket number, FMCSA-2017-0047, in the keyword box, and click “Search.” Next, click the “Open Docket Folder” button and choose the document to review. If you do not have access to the Internet, you may view the docket online by visiting the Docket Management Facility in Room W12-140 on the ground floor of the DOT West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., e.t., Monday through Friday, except Federal holidays.

In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL-14 FDMS), which can be reviewed at www.dot.gov/privacy.

Under section 5202 of the Fixing America's Surface Transportation Act, Public Law 114-94 (FAST Act), if a regulatory proposal is likely to lead to the promulgation of a major rule, agencies are required to start the process with an advance notice of proposed rulemaking (ANPRM) or a negotiated rulemaking, unless the Agency finds good cause that an ANPRM is impracticable, unnecessary, or contrary to the public interest. This NPRM is not subject to these provisions because it is not likely to lead to the promulgation of a major rule.

This proposed rule would allow SDLAs to waive the requirements for a knowledge test for certain individuals who are regularly employed, or were regularly employed within the last year, in a military position requiring the operation of a CMV. This rulemaking implements part of section 5401 of the FAST Act.

Today's proposed rule, in combination with a recent rulemaking—Commercial Driver's License Requirements of the Moving Ahead for Progress in the 21st Century Act (MAP-21) and the Military Commercial Driver's License Act of 2012, published on October 13, 2016, (81 FR 70634), hereafter referred to as the Military CDL I Rule—would give States the option to waive both the CDL knowledge and skills tests for certain current and former military service members who received training in the operation of CMVs during active-duty or reserve service in military vehicles that are comparable to CMVs. The combined effect of the Military CDL I Rule and this proposal would allow certain current or former military drivers, domiciled in participating States, to transition more quickly from the armed forces to civilian driving careers.

FMCSA evaluated potential costs and benefits associated with this proposed rulemaking. The Agency concluded that costs, if any, would be minimal and are not quantifiable, while benefits would accrue primarily to certain current and former military service members transitioning into civilian careers as CMV drivers, and secondarily to their potential employers. Because the proposed rule is voluntary—States are not required to waive the knowledge and/or skills tests—potential variations among States with respect to conditions and limitations imposed beyond those of this proposed rule could be substantial. The Agency is unable to quantify these benefits.

This rulemaking rests on the authority of the Commercial Motor Vehicle Safety Act of 1986 (CMVSA), as amended, codified at 49 U.S.C. chapter 313 and 49 CFR parts 382, 383, and 384. The NPRM also responds to section 5401(a) of the FAST Act [Pub. L. 114-94, 129 Stat. 1312, 1546, December 4, 2015]. This section requires FMCSA to modify the minimum testing standards of its CDL regulations to credit the training and knowledge that certain current or former military drivers received in the armed forces, including the reserve components and National Guard, in order to drive military vehicles similar to civilian CMVs [49 U.S.C. 31305(d)(1)(C)].

The CMVSA provides broadly that “[t]he Secretary of Transportation shall prescribe regulations on minimum standards for testing and ensuring the fitness of an individual operating a commercial motor vehicle” [49 U.S.C. 31305(a)]. In general, those regulations must include (1) minimum standards for knowledge and driving (skills) tests, (2) use of a representative vehicle to take the driving test, (3) minimum testing standards, and (4) working knowledge of CMV regulations and vehicle safety systems [49 U.S.C. 31305(a)(1)-(4)].

Section 5401(a) of the FAST Act added 49 U.S.C. 31305(d): “Standards for Training and Testing of Veteran Operators.” Section 31305(d)(1)(A) required the Agency to modify its CDL regulations to “exempt a covered individual from all or a portion of a driving test if the covered individual had experience in the armed forces or reserve components driving vehicles similar to a commercial motor vehicle.” Section 31305(d)(1)(B) required FMCSA to “ensure that a covered individual may apply for an exemption under subparagraph (A) during, at least, the 1-year period beginning on the date on which such individual separates from services in the armed forces or reserve components.” The term “reserve components” includes the Army and Air National Guard. Section 5401(c) also directed the Agency to adopt regulations allowing certain military personnel an exemption from the normal CDL domicile requirement, as authorized by the Military Commercial Driver's License Act of 2012 [Military CDL Act] and codified at 49 U.S.C. 31311(a)(12)(C). These three provisions were implemented by the Military CDL I Rule.

The last element of section 5401(a), which was not addressed in the Military CDL I Rule, directed the Agency to “credit the training and knowledge a covered individual received in the armed forces or reserve components driving vehicles similar to a commercial motor vehicle for purposes of satisfying minimum standards for training and knowledge” [49 U.S.C. 31305(d)(1)(C)]. That requirement is the subject of this NPRM. It should be noted that section 31305(d)(2)(B) defines a “covered individual” as someone over 21 years of age who is “(i) a former member of the armed forces; or (ii) a former member of the reserve components” [emphasis added]. Limitation of the “credit” to be conferred by section 5401(a) to former members of the active-duty armed forces is at least understandable, since active-duty service members would presumably not have enough off-duty time to engage in civilian driving requiring a CDL. However, limiting that “credit” to former members of the reserve components would exclude large numbers of current reservist drivers who received the same rigorous military CMV training as active-duty personnel but perform military service only part-time, while holding full-time civilian jobs. Because the clear objective of section 5401(a) is to make it easier for trained military drivers to obtain CDLs and move into civilian driving careers, and because the word “former” in the definition of a “covered individual” largely defeats the purpose of the statute, FMCSA has concluded that it would be appropriate to expand the eligible population. This NPRM would therefore allow SDLAs to waive the knowledge test for both current and former service members who had undergone certain CMV driver training while serving in the military. Using the broad authority of 49 U.S.C. 31315(b), the Agency took the same position (without comment) in granting all SDLAs the temporary option (for a 2-year period) of waiving the CDL knowledge test for current or former members of the military services, including the reserves and National Guard, who had completed certain formal military driver training (81 FR 74861, Oct. 27, 2016).

Federal training standards for CMV drivers were adopted only recently. Section 32304 of the Moving Ahead for Progress in the 21st Century Act (MAP-21) [Pub. L. 112-141, July 6, 2012, 126 Stat. 405, 791] required entry-level driver training (ELDT) of CDL applicants [49 U.S.C. 31305(c)]. That requirement was promulgated on December 8, 2016 [81 FR 88732]. However, the ELDT rule provides that “(3) Veterans with military CMV experience who meet all the requirements and conditions of § 383.77 of this chapter” are not required to complete the new entry-level training program [49 CFR 380.603(a)(3)]. Because § 383.77 authorizes the States to exempt CDL applicants with military CMV experience from the driving skills test, those drivers are also exempt from ELDT.

Under 49 CFR 383.77, as amended by the Military CDL I Rule, the Agency now provides partial credit for military drivers' training and knowledge by allowing States to exempt from the CDL driving skills test those employees who are or were regularly employed within the last year in a military position requiring the operation of a military vehicle that is comparable to a CMV.

This NPRM would implement 49 U.S.C. 31305(d)(1)(C) by giving States the discretion (subject to certain limits) to exempt CDL applicants with military CMV experience from the knowledge test required for a commercial learner's permit (CLP). This NPRM would complete the requirement of section 31305(d)(1)(C) to “credit the training and knowledge a covered individual received in the armed forces or reserve components driving vehicles similar to a commercial motor vehicle for purposes of satisfying minimum standards for training and knowledge.”

As specified in 49 CFR 383.71(a)(2)(ii), any individual applying for a CDL or CLP is required to take and pass a general knowledge test. The general knowledge test must meet the Federal standards contained in subparts F, G, and H of part 383 for the commercial vehicle group that person operates or expects to operate.

A final rule published on May 9, 2011 [“Commercial Driver's License Testing and Commercial Learner's Permit Standards” (76 FR 26854)] added new 49 CFR 383.77, which allowed the States to substitute CDL applicants' eligible military CMV experience for the skills test.

The Military CDL I Rule addressed the requirements of 49 U.S.C. 31305(d)(1)(A) and (B) (81 FR 70634). That rule allowed States to extend from 90 days to 1 year the period of time for an individual who is regularly employed or was regularly employed in a position requiring operation of a CMV to apply for a skills test waiver after leaving the military.

Additionally, the Military CDL I Rule allowed the SDLA in the State where military personnel are stationed (State of duty station) to coordinate with the State of domicile to expedite the processing of applications and administer the knowledge and skills tests for a CLP or CDL. The SDLA in the State of domicile could then issue the CLP or CDL on the basis of tests performed by the SDLA in the State of duty station.

The Missouri Department of Revenue (DOR) submitted a request for an exemption from the FMCSA regulation that requires any driver to pass the general knowledge test before being issued a CLP or CDL. The request is available in docket FMCSA-2016-0130, or at: https://www.regulations.gov/document?D=FMCSA-2016-0130-0004. The Missouri DOR asked FMCSA to waive the knowledge test requirement for qualified veterans who participated in dedicated training through approved military programs. The Missouri DOR contended that qualified personnel who participated in such programs had already received the numerous hours of classroom training, practical skills, and one-on-one road training that are essential for safe driving. Upon reviewing the request, FMCSA agreed with Missouri DOR's reasoning and granted a two-year exemption on October 27, 2016 (81 FR 74861). The Agency extended the exemption to allow all SDLAs, at their discretion, to waive the knowledge test requirements to qualified veterans, reservists, National Guard, and active-duty personnel.

This NPRM addresses the third requirement of section 5401(a) of the FAST Act [49 U.S.C. 31305(d)(1)(C)] by proposing to allow SDLAs to exempt certain personnel from the CDL knowledge test. Those personnel are drivers who are regularly employed, or were regularly employed within the last year, in a military position requiring operation of a military vehicle comparable to a CMV, and who completed an approved military driver training program. FMCSA believes that this proposal would maintain a level of safety equivalent to, or greater than, the level that would be achieved by requiring military-trained drivers to pass the knowledge test.

The reference to “written” tests in § 383.23(a)(1) would be changed to “knowledge” tests to be consistent with terminology used elsewhere in part 383.

Section 383.77(a)(1) would be revised to match proposed section 383.79(b)(2)(iii) and to avoid the unintended implication of the reference to “not . . . more than one license.” That original language could be misread to disqualify from the skills test waiver a driver who, in the two years immediately before applying for a CDL, moved from one State to another and held licenses sequentially, but not simultaneously, from both States. The proposed language makes it clear that an applicant cannot simultaneously have held more than one civilian license, in addition to a military license.

The proposal would amend § 383.79(b) to allow States to waive the CLP knowledge test for certain current or former military service members (subject to certain conditions and limitations) who were regularly employed in a military position requiring the operation of a CMV during the year immediately preceding the license application. The conditions imposed on the waiver are essentially those included in § 383.77 when that provision was adopted in 2011.

Like the Military CDL I Rule, this proposed rule would be permissive, i.e., the States would be allowed, but not required, to exercise the waiver option.

FMCSA would amend 49 CFR 384.301 by adding paragraph (l), specifying a 3-year compliance date for States. FMCSA has always allowed the States 3 years after the effective date of any new CDL rule to come into substantial compliance with its requirements. This would allow the States time to pass legislation needed to comply with the new provisions.

Upon reviewing military driver training programs, the Agency has concluded that these programs enable drivers to maintain a level of safety equivalent to, or greater than, the level that would be achieved by requiring them to pass the CDL knowledge test. The Army, Air Force, Navy, and Marine Corps provide specific training dedicated to operating heavy-duty vehicles.1

There are three basic military job training classifications, with additional training for other types of heavy-duty specialty vehicles (e.g., gasoline haulers, construction vehicles, and military equipment transport oversize/overweight [non-track vehicles]).

The four core training programs for heavy vehicle operations, based on the occupational specialty code of the service member, are:

• Army—88M—Motor Transport Operator.

• Air Force—2T1—Vehicle Operations.

• Marine Corps—3531—Motor Vehicle Operator.

• Navy—EO—Equipment Operator.

The 88M Instructor Training Manual is 142 pages long. The student manual—STP 55-88M14-SM-TG Soldier's Manual and Trainer's Guide 88M, Motor Transport Operator—is 229 pages long and includes four levels of training. The 6-week core curriculum of the Army 88M course contains a total of 221 hours of training, including:

• Lecture—32 classroom hours.

• Practical application—road driving—189 hours.

Motor Transport Operators are primarily responsible for operating wheeled vehicles to transport personnel and cargo. Motor Transport Operator duties include: Interior components/controls and indicators; basic vehicle control; driving vehicles over all types of roads and terrain, traveling alone or in convoys; braking, coupling, backing, and alley docking; adverse/tactical driving operations; pre-trip inspections; reading load plans; checking oil, fuel and other fluid levels, as well as tire pressure; operations in automatic and manual modes; crash prevention; safety check procedures; basic vehicle maintenance and repairs; transporting hazardous materials; and keeping mileage records.

The Air Force Tractor Trailer Plan of Instruction (POI) is 226 pages long. The minimum length of instruction for the basic school is 84 hours, including:

• 22 hours of classroom.

• 62 hours of hands-on activity, both alone on a training pad and on the road with an instructor.

The core curriculum is based on the material in the American Association of Motor Vehicle Administrators (AAMVA) CDL Manual—2005 edition (2014 revised). Students participating in the basic 2T1 curriculum learn general principles in the classroom. Specialized training occurs at the installation using the Tractor Trailer Plan of Instruction. A minimum of 40 hours over-the-road time is expected on each vehicle/trailer type.

Topics covered in the Air Force Vehicle Operations course include: Overview of training and Federal requirements; Federal motor vehicle safety standards; tractor/trailer design; hazards and human factors relative to the environment where used; safety clothing and equipment; driving safely; pre- and post-trip vehicle inspection; basic vehicle control; shifting gears; managing space and speed; driving in mountains, fog, winter, very hot weather, and at night; railroad crossings; defensive awareness to avoid hazards and emergencies; skid control and recovery; what to do in case of a crash; fires; staying alert and fit to drive; hazardous materials—rules for all commercial drivers; preparing, inspecting, and transporting cargo safely; inspecting and driving with air brakes; driving combination vehicles safely; and coupling and uncoupling.

The core curriculum of the Marine Corps 3531 course—TM 11240-15/3G contains three training areas:

• Lecture—24 classroom hours.

• Demonstration—classroom/training pad—35 hours.

• Practical application—road driving—198 hours.

Instructional breakout includes:

• Demonstration: 35 hours.

• Guided discussion: 1.5 hours.

• Lecture: 24 hours.

• Performance examination: 62 hours.

• Practical application (individual): 198 hours.

• Knowledge examination: 7 hours.

Classroom instruction includes lectures, demonstration, and practice time for the specific tasks identified. Each classroom session includes knowledge and performance evaluations to ensure students have mastered all of the learning objectives for the specialty proficiency. Training includes both simulators and actual vehicle operation. Practical training includes on-the-road and skills operations, ground guide procedures, and operating a vehicle with a towed load. Students practice their driving and backing, with and without a trailer. Instructors ride with the students as they operate on approved road routes. Specific training areas (pads) are set aside for the students to practice their backing skills and ground guide procedures safely.

The Marine Corps training curriculum also includes emergency procedures and cargo loading.

The core curriculum of the USN Heavy Vehicle Operator (Truck Driver) (EO) course (53-3032.00) is designed to train Navy personnel how to operate passenger and cargo vehicles to rated capacity. They palletize, containerize, load and safely transport various types of cargo and demonstrate knowledge and skills for qualifying as a driver journeyman. The complete program covers topics including:

The course is taught over 160 hours including 30 hours classroom and 130 hours lab (behind the wheel). By completing this course, the Navy driver will be able to:

• Perform the duties of normal, non-combat conditions driving in accordance with the local state driver licensing agency's CDL driver handbook;

• Manage hazardous petroleum, oils and lubricants (POL) material required during line haul and worksite activities, to support normal, non-combat operations;

• Perform preventive maintenance on a non- or up-armored manual truck tractor with drop-neck trailer, consisting of pre-start, during-operations, and after-operations equipment checks, to support normal, non-combat operations, in accordance with local State Driver License Agency CDL handbooks;

• Operate vehicle controls of a non- or up-armored manual truck-tractor, to support normal, non-combat operations; and

• Be proficient with the components and controls of a drop-neck trailer relative to a detached/attached gooseneck and a coupled/uncoupled trailer.

Other topics covered within the Navy EO training program include:

The military training programs described above are thorough and comprehensive. They incorporate most of the elements recommended by the Professional Truck Driver Institute, which has been the principal standard-setting organization for private-sector motor carrier training for decades. They are also entirely compatible with the requirements of FMCSA's recently-adopted ELDT rule. Although geared to heavy-duty military vehicles, military training is readily transferrable to a civilian context, since the operational characteristics of large military and civilian vehicles are very similar and, in some cases, identical. The Agency believes that exempting these drivers from the CLP knowledge test, in addition to the skills test, will have no adverse effect on highway safety.

FMCSA's previous regulatory guidance for § 383.77 was removed when the Agency's guidance for 49 CFR parts 383 and 384 was revised and reissued; see “Commercial Driver's License Standards, Requirements and Penalties; Regulatory Guidance” (DATE XX FR XXXX).

The FMCSRs, and any exceptions to the FMCSRs, apply only within the United States (and, in some cases, United States territories). Motor carriers and drivers are subject to the laws and regulations of the countries in which they operate, unless an international agreement states otherwise. Drivers and carriers should be aware of the regulatory differences among nations.

The reference to “written” tests in paragraph (a)(1) would be changed to “knowledge” tests to match the terminology used elsewhere in part 383.

Section 383.77(a)(1) would be revised to state that an applicant may not have held two civilian licenses simultaneously, in addition to a military license.

The title of this section would be amended slightly, while paragraph (a), CDL applicants trained out-of-State, would not be modified.

Existing paragraph (b), Military service member applicants for a CLP or CDL, would be removed and replaced by a new paragraph (b), Knowledge test waivers for certain current or former military service members applying for a CLP or CDL.

Existing paragraph (b)(1) would be redesignated as proposed paragraph (c). A new paragraph, In general, would be added as paragraph (b)(1).

Existing paragraph (b)(2) would be redesignated as proposed paragraph (d). A new paragraph, Conditions and limitations, would be added as paragraph (b)(2), outlining the requirements to apply for a waiver of the knowledge test.

Redesignated paragraph (c) would retain the content of current paragraph (b)(1), State of duty station, but with some editorial changes.

New paragraph (d), Electronic transmission, is currently codified as paragraph (b)(2).

New paragraph (e), State of domicile, would be revised to reflect the new waiver options proposed by this NPRM.

This proposed rule would not alter the existing paragraphs in this section. Paragraph (l) is added.

Under E.O. 12866 (58 FR 51735, October 4, 1993) as supplemented by E.O. 13563 and DOT policies and procedures, FMCSA must determine whether a regulatory action is “significant,” and therefore subject to OMB review and the requirements of the E.O. The Order defines “significant regulatory action” as one likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal government or communities.

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another Agency.

(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof.

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the E.O.

FMCSA has determined that this action is not a significant regulatory action within the meaning of E.O. 12866 or significant within the meaning of Department of Transportation regulatory policies and procedures. However, FMCSA did evaluate the costs and benefits of this proposed rulemaking. This proposed rulemaking would not result in an annual effect on the economy of $100 million or more, lead to a major increase in costs or prices, or have significant adverse effects on the United States economy.

FMCSA evaluated potential costs and benefits associated with this proposed rulemaking. The Agency concludes that costs, if any, would be minimal and are non-quantifiable, while benefits would be realized by certain current and former military service members transitioning into civilian careers driving CMVs, as well as by their potential employers. Due to the voluntary nature of the proposed rule and potential variations across States with respect to conditions and limitations imposed beyond those of § 383.79, the Agency is unable to quantify these benefits.

The proposed rule would allow States to waive the requirement in § 383.23(a)(1) that an applicant must pass a knowledge test for a CLP, including waiver of the knowledge test for a CLP required by § 383.111, for certain current or former military service members. This proposed rule would allow States to provide waivers of the knowledge test, if the individual can certify and provide evidence that during the 1-year period immediately prior to the application he or she met the criteria outlined in § 383.79.

Under the proposed rule, certain active-duty military service members may submit an application to the SDLA in their State of duty station for a CLP or CDL, including an application for a waiver of the knowledge test, upon prior agreement between respective SDLAs in the State of duty station and State of domicile. This proposed rule is therefore expected to result in time savings to active-duty service members equivalent to the amount of time that would otherwise be spent preparing for and taking the knowledge test. The Agency cannot quantify the aggregate extent of such time savings, as the proposed rule would not require States to accept applications for waivers of the knowledge test; nor can the Agency know what conditions and limitations States may impose on applicants beyond those of this proposed rule. However, the Agency considers it likely that those States that elect to accept applications for waivers of the driving skills test would also accept applications for waivers of the knowledge test following implementation of the proposed rule, subject to similar conditions and limitations. If the proposed rule encourages additional active-duty military service members to seek civilian employment as drivers following their completion of military service, their potential employers may benefit from an increase in the labor supply; however, the Agency is likewise unable to quantify this benefit due to the reasons cited above.

Certain former military service members seeking to transition into civilian employment as a driver may benefit under the proposed rule by no longer having to possess a CLP for 14 days before either taking the driving skills test or applying for a waiver of the driving skills test. Provided that their State of domicile would accept applications for waivers of both the knowledge test and the skills test, such former military service members may apply simultaneously for both. As noted above, the Agency considers it likely that States that elect to accept applications for waivers of the driving skills test would also accept applications for waivers of the knowledge test following implementation of the proposed rule, subject to similar conditions and limitations. By providing an expedited path to enter the labor market, the rule allows certain former service members to benefit from faster access to jobs, while their potential employers may benefit from faster access to those individuals' labor hours. As with certain active-duty military service members, certain former military service members who obtain waivers of the knowledge test would also incur time savings equivalent to the time that would otherwise be spent preparing for and taking the knowledge test. Due to the voluntary nature of this proposed rule and uncertainty regarding conditions and limitations States may impose on applicants beyond that of § 383.79, the Agency cannot estimate the aggregate value of these benefits to certain former military service members or their potential employers.

In considering the costs of the proposed rule, the Agency notes that the NPRM would allow the State of duty station (for active service members) to transmit completed applications to the State of domicile by a direct, secure, and efficient electronic system. Completed applications are to include any supporting documents pertinent to the waiver(s) being sought and—if the State of domicile has not exercised its waiver option—the results of any knowledge and skills tests administered. This proposed rule does not require the creation of or significant modification to existing communication methods between SDLAs. At present, transmissions between a State of duty station and State of domicile are already subject to identical requirements with respect to secure electronic transmission of completed applications under § 383.79(c). The Agency expects de minimis modifications may be needed depending on individual State variations (if any) in documentation that would be required for applications for knowledge test waivers. The de minimis expectation is rooted in the assumption that States will take a pragmatic approach by requiring the same documentation for a knowledge test waiver application as for a skills test waiver application.

The Regulatory Flexibility Act of 1980 (RFA) (5 U.S.C. 601 et seq.), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) (Pub. L. 104-121, 110 Stat. 857), requires Federal agencies to consider the impact of their regulatory proposals on small entities, analyze effective alternatives that minimize small entity impacts, and make their analyses available for public comment. The term “small entities” means small businesses and not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with a population of less than 50,000.2 Accordingly, DOT policy requires an analysis of the impact of all regulations on small entities, and mandates that agencies strive to lessen any adverse effects on these entities.

When an agency issues a rulemaking proposal, the RFA requires the agency to “prepare and make available for public comment an initial regulatory flexibility analysis” which will “describe the impact of the proposed rule on small entities” (5 U.S.C. 603(a)). Section 605 of the RFA allows an agency to certify, in lieu of preparing an analysis, if the proposed rulemaking is not expected to have a significant economic impact on a substantial number of small entities.

The primary entities affected by this proposed rule would be certain current and former military service members and SDLAs. Under the standards of the RFA, as amended by the SBREFA, none of these are small entities. Therefore, FMCSA has determined that this proposed rule will not have a significant economic impact on a substantial number of small entities. Incidentally, the proposed rule's impacts on current and former military service members would be entirely beneficial by allowing States to provide more flexibility to those seeking to obtain a CDL. With respect to costs, the impacts on SDLAs that choose to exercise the waiver option are estimated to be de minimis.

Accordingly, I hereby certify that this proposed rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. FMCSA invites comment from members of the public who believe there will be a significant impact on small entities from this action.

In accordance with section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, FMCSA wants to assist small entities in understanding this proposed rule so that they can better evaluate its effects on themselves and participate in the rulemaking initiative. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance; please consult the FMCSA point of contact, Selden Fritschner, listed in the FOR FURTHER INFORMATION CONTACT section of this proposed rule.

Small businesses may send comments on the actions of Federal employees who enforce or otherwise determine compliance with Federal regulations to the Small Business Administration's Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of FMCSA, call 1-888-REG-FAIR (1-888-734-3247). DOT has a policy regarding the rights of small entities to regulatory enforcement fairness and an explicit policy against retaliation for exercising these rights.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $156 million (which is the equivalent of $100 million in 1995, adjusted for inflation to 2015 levels) or more in any one year. Though this proposed rule would not result in such expenditure, the Agency does discuss the effects of the proposed rule elsewhere in this preamble.

This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for Federalism under Section 1(a) of E.O. 13132 if it has “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.”

FMCSA has determined that this proposed rule would not have substantial direct costs on or for the States, nor will it limit the policymaking discretion of the States. This proposed rule does not preempt any State law or regulation. Therefore, this proposed rule does not have sufficient federalism implications to warrant the preparation of a Federalism Impact Statement.

This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), requires agencies issuing “economically significant” rules, if the regulation also concerns an environmental health or safety risk that an agency has reason to believe may disproportionately affect children, to include an evaluation of the regulation's environmental health and safety effects on children. The Agency determined this proposed rule is not economically significant. Therefore, no analysis of the impacts on children is required. In any event, this regulatory action does not in any respect present an environmental health or safety risk that could disproportionately affect children.

FMCSA reviewed this proposed rule in accordance with E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights, and has determined it will not effect a taking of private property or otherwise have taking implications.

The Consolidated Appropriations Act, 2005, (Pub. L. 108-447, 118 Stat. 2809, 3268, 5 U.S.C. 552a note) requires the Agency to conduct a privacy impact assessment (PIA) of a regulation that will affect the privacy of individuals. Because this proposed rule does not require the collection of personally identifiable information (PII), the Agency is not required to conduct a PIA.

The E-Government Act of 2002, Public Law 107-347, 208, 116 Stat. 2899, 2921 (Dec. 17, 2002), requires Federal agencies to conduct a PIA for new or substantially changed technology that collects, maintains, or disseminates information in an identifiable form. No new or substantially changed technology would collect, maintain, or disseminate information as a result of this rule. Accordingly, FMCSA has not conducted a PIA.

The regulations implementing E.O. 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this program.

FMCSA has analyzed this proposed rule under E.O. 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. The Agency has determined that the rule is not a “significant energy action” under that order because it is not a “significant regulatory action” likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, it does not require a Statement of Energy Effects under E.O. 13211.

This proposed rule does not have tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through OMB, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) are standards that are developed or adopted by voluntary consensus standards bodies. This proposed rule does not use technical standards. Therefore, FMCSA did not consider the use of voluntary consensus standards.

FMCSA analyzed this NPRM for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and determined this action is categorically excluded from further analysis and documentation in an environmental assessment or environmental impact statement under FMCSA Order 5610.1 (69 FR 9680, March 1, 2004), Appendix 2, paragraphs 6.s.(6) and 6.t.(2). The Categorical Exclusion (CE) in paragraph 6.s.(6) covers a requirement for States to give knowledge and skills tests to all qualified applicants for commercial drivers' licenses which meet the Federal standard. The CE in paragraph 6.t.(2) covers regulations to ensure that the States comply with the provisions of the Commercial Motor Vehicle Safety Act of 1986, by: (2) Having the appropriate laws, regulations, programs, policies, procedures and information systems concerning the qualification and licensing of persons who apply for a commercial driver's license, and persons who are issued a commercial driver's license. The requirements in this proposed rule are covered by these CEs and the proposed action does not have any effect on the quality of the environment. The CE determination is available for inspection or copying in the Federal eRulemaking Portal: http://www.regulations.gov.

FMCSA also analyzed this proposed rule under the Clean Air Act, as amended (CAA), section 176(c) (42 U.S.C. 7401 et seq.), and implementing regulations promulgated by the Environmental Protection Agency. Approval of this action is exempt from the CAA's general conformity requirement since it does not affect direct or indirect emissions of criteria pollutants.

Under E.O. 12898, each Federal agency must identify and address, as appropriate, “disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority populations and low-income populations” in the United States, its possessions, and territories. FMCSA evaluated the environmental justice effects of this proposed rule in accordance with the E.O., and has determined that no environmental justice issue is associated with this proposed rule, nor is there any collective environmental impact that would result from its promulgation.

In consideration of the foregoing, FMCSA amends 49 CFR chapter III, parts 383 and 384 to read as follows:

In September 2015, the Pacific Fishery Management Council (Council) recommended NMFS implement regulations for the DGN fishery that included two-year rolling hard caps on observed mortality and injury to certain protected species during the May 1 to January 31 fishing season each year. The Council transmitted its proposed regulations for implementing hard caps to NMFS on September 23, 2016. Under the proposed regulations, caps would have been established for five marine mammal species and four sea turtle species. When any of the caps were reached, the fishery would have been closed for the rest of the fishing season and possibly through the following season. The length of any closure would have depended on when during the two-year period a cap was reached.

NMFS published a proposed rule to implement the Council's recommendation to establish protected species hard caps in the Federal Register on October 13, 2016, (81 FR 70660). Supporting documents included a draft Environmental Assessment (EA), an Initial Regulatory Flexibility Analysis, and draft Regulatory Impact Review (RIR). During the proposed rule's comment period, NMFS received a request to extend the comment period. On November 23, 2016, NMFS published a notice in the Federal Register extending the end-date of the comment period for the proposed rule from November 28, 2016 to December 28, 2016 (81 FR 84546).

Following public comment, NMFS completed a final EA, Final Regulatory Flexibility Analysis, and RIR (posted at https://www.regulations.gov/docket?D=NOAA-NMFS-2016-0123). As a result of its analysis of the effects of the proposed rule, NMFS has decided that the changes covered in the proposed rule from 2016 are not warranted at this time. Therefore, NMFS is withdrawing the proposed rule published in the Federal Register on October 13, 2016 (81 FR 70660).