Federal Register Vol. 82, No.174,

Discussion

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2017-0129, dated July 25, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A350-941 airplanes. The MCAI states:

Airbus has issued Alert Operators Transmission (AOT) A42P001-17, dated June 30, 2017, which describes procedures for repetitive on-ground power cycles to reset the internal timer. 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 issuing this AD because we evaluated all pertinent information and determined the unsafe condition exists and is likely to exist or develop on other products of these same type designs.

An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because a loss of communication between some avionics systems and the avionics network could lead to partial or total loss of some avionics systems or functions. Therefore, we determined that notice and opportunity for public comment before issuing this AD are impracticable and that good cause exists for making this amendment effective in fewer than 30 days.

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2017-0808; Product Identifier 2017-NM-102-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD 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 AD.

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

We also estimate that it will take about 1 work-hour per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD on U.S. operators to be $170, or $85 per product.

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

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

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.

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

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

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 737-700 and -700C series airplanes. The NPRM published in the Federal Register on June 28, 2016 (81 FR 41894). The NPRM was prompted by a report that, for airplanes with blended winglets, the nose-up pitch trim limit and associated warning for the horizontal stabilizer control system will allow the stabilizer position to be set outside acceptable limits for a mis-trimmed takeoff condition. The NPRM proposed to require, depending on airplane configuration, replacing the pitch trim light plates on the flight deck control stand, relocating the position warning horn switches of the horizontal stabilizer, revising the software, removing the placard, and doing related investigative and corrective actions if necessary. We are issuing this AD to prevent a stabilizer position set outside acceptable limits for a mis-trimmed takeoff condition. Settings outside of the appropriate pitch trim limits could result in loss of controllability of the airplane during takeoff.

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

Air Line Pilots Association, International (ALPA) stated its support for the NPRM. United Airlines stated that it has no technical objections with the NPRM.

Aviation Partners Boeing requested that the NPRM be updated to include the latest service information, which is Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 3, dated July 19, 2016.

We agree with the commenter's request. Since the NPRM was issued, we have reviewed Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 4, dated April 24, 2017, which provides minor changes. We have updated this AD to refer to Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 4, dated April 24, 2017. We have also added credit for Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 3, dated July 19, 2016.

Southwest Airlines (SWA) requested that Boeing Alert Service Bulletin 737-27A1306, dated September 10, 2015, be revised to reference revised Aviation Partners Boeing service information. SWA stated that Boeing Alert Service Bulletin 737-27A1306, dated September 10, 2015, specifies concurrent accomplishment of Aviation Partners Boeing Service Bulletin AP737-27-002, March 31, 2015. SWA stated that this concurrent requirement should call for the use of Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 2, dated March 1, 2016, as stated throughout the NPRM.

We acknowledge the commenter's request. After we issued the NPRM, Boeing published Boeing Alert Service Bulletin 737-27A1306, Revision 1, dated December 14, 2016, which identifies Aviation Partners Boeing Service Bulletins “AP737-27-002, Original Issue, Revision 1, Revision 2, or Revision 3,” as concurrent requirements. Aviation Partners Boeing has since published Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 4, dated April 24, 2017. We have revised paragraph (g)(2) of this AD to refer to Boeing Alert Service Bulletin 737-27A1306, dated September 10, 2015, as revised by Boeing Alert Service Bulletin 737-27A1306, Revision 1, dated December 14, 2016. As we stated previously, Aviation Partners Boeing has published Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 4, dated April 24, 2017. Paragraphs (g)(1) and (g)(2) of this AD also refer to Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 4, dated April 24, 2017.

Delta Air Lines (DAL) requested that we either make Aviation Partners Boeing Service Bulletin AP737-34-005, dated July 17, 2015, available to all operators or revise paragraph (c)(3) of the applicability in the proposed AD to identify specifically affected airplanes. DAL stated that, during its review of the NPRM, it was not able to obtain a copy of Aviation Partners Boeing Service Bulletin AP737-34-005, dated July 17, 2015. DAL commented that it requested Aviation Partners Boeing Service Bulletin AP737-34-005, dated July 17, 2015, from Boeing and was advised that the Aviation Partners Boeing service information was not applicable to DAL airplanes, and, therefore, the service information would not be made available to DAL. DAL stated that, as a result, it was unable to independently verify that there are no DAL airplanes identified in Aviation Partners Boeing Service Bulletin AP737-34-005, dated July 17, 2015. DAL commented that paragraph 1.A.1., “Aircraft Affected,” of Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 2, dated March 1, 2016, does identify airplanes having line numbers 384 and 3128 as affected by Aviation Partners Boeing Service Bulletin AP737-34-005, dated July 17, 2015. DAL stated that, however, paragraph (c)(3) of the proposed AD does not mention Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 2, dated March 1, 2016, as a method to identify airplanes.

DAL commented that it would prefer that Aviation Partners Boeing Service Bulletin AP737-34-005, dated July 17, 2015, be available to all operators so that each operator can determine whether or not their airplanes are affected. DAL also stated that if the manufacturer cannot support this, DAL suggested that paragraph (c)(3) in the AD should indicate that Aviation Partners Boeing Service Bulletin AP737-34-005, dated July 17, 2015, is only applicable to airplanes having line numbers 384 and 3128.

We partially agree with the commenter's request. We disagree with revising the applicability of this AD. However, the service information specified in paragraphs (c), (g), and (h) of this AD is incorporated by reference in this AD, and it should be available to all operators, as well as the general public, after the AD is published. We have provided availability information for the required service information in both the preamble and regulatory text of this AD.

We have also clarified the actions for the airplane having line number 3128. Boeing Alert Service Bulletin 737-27A1306, dated September 10, 2015, as specified in paragraph (c)(2) of this AD, also references line number 3128. Paragraph (g)(2) of this AD refers to Boeing Alert Service Bulletin 737-27A1306, dated September 10, 2015, for accomplishing actions. Paragraph (h) of this AD refers to Aviation Partners Boeing Service Bulletin AP737-34-005, dated July 17, 2015, for accomplishing actions. For line number 3128, the actions in paragraph (h) of this AD should be done instead of paragraph (g)(2) of this AD. We have revised paragraph (g)(2) of this AD to exclude line number 3128.

In addition, we have clarified the actions for airplanes identified in paragraph (c)(2) of this AD by excluding those airplanes from paragraph (g)(1) of this AD. Paragraph (g)(1) of this AD specifies actions for airplanes identified in paragraph (c)(1) of this AD, which includes airplanes that are identified in paragraph (c)(2) of this AD. However, for airplanes identified in paragraph (c)(2) of this AD, the actions specified in paragraph (g)(2) of this AD must be done.

SWA requested that any airplane modified per Supplemental Type Certificate (STC) ST00830SE, Amendment dated April 21, 2015, dated August 26, 2015, or subsequent be excluded from the applicability of the proposed AD. SWA stated that it has recently incorporated STC ST00830SE (Amendment dated April 21, 2015) on airplanes that have not previously had blended winglets installed. SWA commented that the Amendment dated April 21, 2015, of the STC incorporates the intent of Aviation Partners Boeing Service Bulletin AP737-27-002. SWA stated that it is currently incorporating STC ST00830SE, Amendment dated August 26, 2015, on airplanes that have not previously had blended winglets installed.

We partially agree with the commenter's request. We concur with the assertion that installation of STC ST00830SE at Amendment dated April 21, 2015, fulfills the equivalent actions specified in Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 4, dated April 24, 2017. In addition, there are later amendments that apply to Model 737-700 series airplanes that fulfill the actions specified in Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 4, dated April 24, 2017. We have revised paragraph (c) of this AD to exclude airplanes on which winglets are installed as specified in STC ST00830SE, Amendment dated on or after April 21, 2015.

SWA requested that we include certain line numbers in the applicability of the proposed AD. SWA stated that paragraph 1.A.1., “Aircraft Affected,” of Aviation Partners Boeing Service Bulletin AP737-27-002 defines the effectivity of Group 2 airplanes as “. . . manufacturing line number 3100 and on . . . .” SWA commented that it is unclear if this modification is being incorporated on the Boeing production line. SWA stated that, if this modification is being incorporated on the Boeing production line, then the manufacturing line number should be identified as the upper end of the effectivity of Aviation Partners Boeing Service Bulletin AP737-27-002 and in the upper end of the proposed applicability.

We agree that operators need to know which airplanes are affected. However, we disagree with including line numbers in the applicability of this AD, because the Aviation Partners Boeing kit configuration identified in section 1.A.1., “Aircraft Affected,” of Aviation Partners Boeing Service Bulletin AP737-27-002 clearly identifies the airplanes that need the modification. Airplanes delivered from Boeing with other kit configuration numbers are outside the effectivity, and therefore, do not require the accomplishment of Aviation Partners Boeing Service Bulletin AP737-27-002. We have not changed this AD in this regard.

Boeing requested that we revise the unsafe condition statement throughout the NPRM, so that it is more consistent with the description specified in the service information. Boeing clarified that accomplishing the proposed requirements will not prevent takeoffs with incorrect trim settings, but rather allows for acceptable takeoff limits at specific airplane configurations in which the stabilizer trim has been set at a maximum mis-trim, as specified in 14 CFR part 25.

We agree to revise the unsafe condition statement as suggested by Boeing for the reason provided. We have revised this final rule accordingly.

ALPA requested that we reduce the proposed compliance time from “72 months after the effective date of this AD” to “36 months after the effective date of this AD.” ALPA commented that it is of the upmost importance to ensure the airplane is taking off in the correct trim setting and the associated warning system has to work properly in order to alert the flight crew of a possible misconfiguration before takeoff.

We do not agree to reduce the compliance time for the requirements of this AD. We agree that it is important to have the correct configuration of the airplane for takeoff, because of the potential unsafe conditions that incorrect configurations might pose. However, this AD does not address that safety concern. After considering the available information, we have determined that the compliance time, as proposed, represents an appropriate interval of time in which the required actions can be performed in a timely manner within the affected fleet, while still maintaining an adequate level of safety. In developing an appropriate compliance time, we considered the safety implications, parts availability, and normal maintenance schedules for timely accomplishment of the modifications. Further, we arrived at the proposed compliance time with the manufacturer's concurrence. To reduce the proposed compliance time would necessitate (under the provisions of the Administrative Procedure Act) reissuing the notice, reopening the period for public comment, considering additional comments subsequently received, and eventually issuing a final rule. In light of this, and in consideration of the amount of time that has already elapsed since issuance of the original notice, we have determined that further delay of this final rule is not appropriate. However, if additional data are presented that would justify a shorter compliance time, we may consider further rulemaking on this issue. We have not changed this AD in this regard.

DAL requested that we clarify the NPRM to specify whether certain alternative lockwire part numbers (P/Ns) are acceptable alternatives to those specified in Aviation Partners Boeing Service Bulletin AP737-27-002. DAL stated that table 3 of Aviation Partners Boeing Service Bulletin AP737-27-002 calls for the use of lockwire having P/N MS20995NC20 and P/N MS20995NC32. DAL stated that review of parts available on MyBoeingFleet Part Page shows that those part numbers are no longer available. DAL commented that the Part Page provides substitute P/Ns M000200850 and P/N M000320850, respectively. DAL stated that Aviation Partners Boeing Service Bulletin AP737-27-002 includes a note in the Accomplishment Instructions, which refers operators to chapter 51 of the Boeing 737 Structural Repair Manual (SRM) for use of approved fastener and process material substitutions. DAL commented that this SRM reference does not detail any substitutes for the lockwire. DAL stated that, lacking an approval source other than the Boeing Part Page, an alternative method of compliance (AMOC) would be required to use lockwire having P/N M000200850 and P/N M000320850. DAL commented that specifying these would facilitate operator procurement efforts and minimize potential AMOC requests.

We agree to clarify. Part Number M000200850 and P/N M000320850 are the Boeing stock numbers, which meet the MS20995 lockwire specifications in Aviation Partners Boeing Service Bulletin AP737-27-002. In addition, specific lockwire part numbers are not included in the Required for Compliance (RC) steps of Aviation Partners Boeing Service Bulletin AP737-27-002. Therefore, we find that it is not necessary to revise this AD to address this issue, and we have not changed this AD in this regard.

DAL requested that we exclude the explicit instruction in Note 3 of the Accomplishment Instructions of Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 2, dated March 1, 2016, that specifies making a recordkeeping entry in the airplane records once the service information is completed. DAL requested that, if the exclusion of Note 3 cannot be granted in the AD, the final rule provide an allowance for operators to use their existing recordkeeping procedures to record completion of Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 2, dated March 1, 2016.

DAL commented that its recordkeeping process would track compliance with a specific engineering document number used to embody a specified service bulletin on the airplane. DAL stated that it would not typically record service bulletin accomplishment using a phrase similar to that given in Note 3 of the Accomplishment Instructions of Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 2, dated March 1, 2016. DAL commented that the requirement to show compliance with the subject service information does not require such explicit requirements. DAL stated that recording the service information exactly as detailed in the note does not improve airplane safety, and therefore, latitude should be given to operators regarding their method for recording compliance with Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 2, dated March 1, 2016. DAL stated that this will prevent the need for future AMOC requests.

We agree that operators may use their existing recordkeeping processes to document maintenance actions performed using Aviation Partners Boeing Service Bulletin AP737-27-002. For this AD, recordkeeping is not a critical step that addresses the unsafe condition. As DAL pointed out, the actions specified in Note 3 are not called out in an RC step in the Accomplishment Instructions. We have added paragraph (j)(2) to this AD to clarify that recordkeeping is not required by this AD.

DAL requested that we clarify the requirements for incorporating the OPT. DAL stated that Aviation Partners Boeing Service Bulletin AP737-27-002 specifies concurrent actions recommending that users of the OPT contact Boeing for an updated database and instructions on how to incorporate this database into the OPT. DAL commented that it does not use the OPT and that the proposed AD does not give any guidance with respect to this concurrent requirement. DAL commented that the concurrent requirement is actually written as a recommendation, which would imply that it is not a mandatory action and that compliance is optional.

We agree to provide clarification regarding the OPT. We infer that DAL meant to refer to Aviation Partners Boeing Service Bulletin AP737-34-005, as there are no concurrent actions specified in Aviation Partners Boeing Service Bulletin AP737-27-002. The usage of the OPT, as specified in the concurrent requirements section of Aviation Partners Boeing Service Bulletin AP737-34-005, dated July 17, 2015, is optional and is not a requirement of this AD. We have not changed this AD in this regard.

SWA requested that the proposed AD allow for the installation of later-approved versions of the Flight Management Computer (FMC) Model Engine Database (MEDB) and/or FMC Operational Program Software (OPS). SWA stated that Part 4 of Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 2, dated March 1, 2016, specifies the installation of FMC MEDB software having P/N BCG-01T-A0 with compatible FMC OPS Versions U10.8A, U11, or U12. SWA commented that if any later versions of FMC MEDB or FMC OPS are installed at a future date an AMOC would be needed to stay in compliance with the AD.

We disagree with the commenter's request. This AD requires, for certain airplanes, the actions specified in Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 4, dated April 24, 2017, which identifies specific software that must be installed. That software must be installed to address the identified unsafe condition. However, under the provisions of paragraph (k) of this AD, we will consider requests for approval of new software if sufficient data are submitted to substantiate that the new software would provide an acceptable level of safety. We have not changed the final rule in this regard.

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

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

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

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

We reviewed the following Aviation Partners Boeing service information.

• Aviation Partners Boeing Service Bulletin AP737-27-002, Revision 4, dated April 24, 2017. This service information describes procedures for replacing the pitch trim light plates on the flight deck control stand, relocating the horizontal stabilizer position warning horn switches, and updating the software for the MEDB of the FMC.

• Aviation Partners Boeing Service Bulletin AP737-34-005, dated July 17, 2015. This service information describes procedures for updating the software in the MEDB for the FMC and removing a certain placard on the control stand.

We also reviewed the following Boeing service information.

• Boeing Alert Service Bulletin 737-27A1306, dated September 10, 2015. This service information describes procedures for replacing the pitch trim light plates on the flight deck control stand, relocating the position warning horn switches of the horizontal stabilizer, and installing new software for the MEDB for the FMC.

• Boeing Alert Service Bulletin 737-27A1306, Revision 1, dated December 14, 2016. This service information is a short form revision that specifies changes to the concurrent requirements and the affected publications identified in Boeing Alert Service Bulletin 737-27A1306, dated September 10, 2015.

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 estimate that this AD affects 569 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

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

According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

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

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

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.

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

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

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

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

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

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

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Textron Aviation Inc. Model 390 airplanes (type certificate previously held by Beechcraft Corporation). The NPRM published in the Federal Register on June 20, 2017 (82 FR 28026). The NPRM was prompted by reports of hydraulic fluid loss from the engine driven pumps (EDPs) on three different Textron Aviation Inc. Model 390 airplanes. In one incident, the airplane exited the runway at a high speed, resulting in extensive damage to the airplane. One manufacturing lot of EDPs has excessive pitting in the aluminum port caps that could cause multiple-origin fatigue cracking of the port caps. Flammable hydraulic fluid could leak into the engine compartment, and the leaking could also cause loss of all normal hydraulic functions, including normal anti-skid braking, ground spoilers, speedbrakes, and normal landing gear extension. The NPRM proposed to require an inspection to determine if an affected EDP is installed with replacement as necessary. We are issuing this AD to correct the unsafe condition on these products.

We gave the public the opportunity to participate in developing this final rule. We received no comments on the NPRM or on the determination of the cost to the public.

We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule as proposed except for minor editorial changes. We have determined that these minor changes:

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

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

We reviewed Parker Service Bulletin 66179-29-486, dated August 4, 2016, which identifies the affected serial number EDPs. We also reviewed Beechcraft Mandatory Service Bulletin SB 29-4161, dated November 18, 2016, which describes procedures for determining if an affected serial number EDP is installed and procedures for replacing the EDP if necessary. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 179 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We estimate the following costs to do any necessary replacement that would be required based on the results of the inspection. We estimate the affected manufacturer lot of EDPs as 28 EDPs. If an airplane has two of the affected EDPs installed, both EDPs must be replaced. However, no more than a total of 28 EDPs will require replacing for the U.S. fleet:

According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

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

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

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to small airplanes and domestic business jet transport airplanes to the Director of the Policy and Innovation Division.

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

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

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

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

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

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

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2016-11-20, Amendment 39-18547 (81 FR 37492, June 10, 2016), (“AD 2016-11-20”), for B/E Aerospace protective breathing equipment (PBE), part number (P/N) 119003-11, that is installed on airplanes. The NPRM published in the Federal Register on May 26, 2017 (82 FR 24260). The NPRM was prompted by a report that PBE units, P/N 119003-21, within a certain serial number range are made with candle tube material determined to have a low yield strength and may be volatile upon use or disposal. The NPRM proposed to retain the actions required in AD 2016-11-20 and would require inspecting and replacing P/N 119003-11 and 119003-21 PBE units. We are issuing this AD to correct the unsafe condition on these products.

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

David White, of NetJets Aviation, requested that the action required in paragraph (i) of this AD for determining the serial number of the installed PBE, P/N 119003-21, also include a maintenance records review.

The commenter stated that if the maintenance records are available and the determination can positively be made, this review will save the owners/operators time and money.

We agree with the commenter and have changed this AD based on this comment.

David White, of NetJets Aviation, requested that the compliance time in paragraph (j) of this AD to be clarified.

The commenter stated that paragraph (j) of this AD requires replacement of an affected mask before further flight or following existing minimum equipment list (MEL) procedures, but it does not identify if compliance is required at the earlier or the later of the two thresholds.

We do not agree with commenter. The MEL is a document and method airplane operators use to obtain relief from Federal Aviation Regulations that requires all equipment installed on the airplane be operative at the time of flight. It is airplane-specific and spells out which pieces of equipment may be inoperable along with any procedures that are required for an airplane to operate under specific conditions while maintaining airworthiness. The reference to MEL is a reminder that, depending on the airplane and its MEL, it may be acceptable to remove the affected units and continue to operate with a reduced number of PBEs as stated in the specific MEL. The affected units must be removed upon discovery.

We have changed this AD based on this comment to make this more clear.

David White, of NetJets Aviation, requested we change the replacement compliance time in paragraph (j) of this AD to match the compliance time in paragraph (i) of this AD, which would allow six months to replace the affected PBE after it is identified by inspection or maintenance records review.

The commenter stated that if the request to allow a records review for paragraph (i) of this AD is accepted, then the maintenance records review could be accomplished without access to the airplane and could result in unnecessarily grounding the airplane if a discrepant mask is found during the records review. However, if the compliance time for replacing the affected PBE matches the compliance time for the inspection/maintenance records review, the operators will have flexibility for compliance with paragraph (j).

We do not agree with the commenter. Once an airplane has been identified to have an affected PBE installed, it must be removed and replaced before further flight. Once a discrepant PBE has been identified during an inspection or review of records, the unit must be removed before further flight. However, continued operation with fewer than required PBE is permissible if allowed by your MEL.

We have not changed this AD based on this comment.

B/E Aerospace, Inc. requested that Service Bulletin (SB) 119003-35-013, Rev. 002, dated July 19, 2017, be incorporated into this AD.

The commenter stated that the only change in the B/E Aerospace SB 119003-35-013, Rev. 002, dated July 19, 2017, is the addition of warranty credit. All other information and instructions are the same as those contained in B/E Aerospace SB 119003-35-013, Rev. 001, dated February 24, 2017.

We agree with the commenter and have changed this AD based on this comment.

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

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

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

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

We reviewed B/E Aerospace SB No. 119003-35-011, Rev. 000, dated February 4, 2015; SB 119003-35-009, Rev. 001, dated April 12, 2016; and SB No. 119003-35-013, Rev. 002, dated July 19, 2017. B/E Aerospace SB No. 119003-35-011, Rev. 000, dated February 4, 2015, describes procedures for inspecting PBE, P/N 119003-11, to determine if the vacuum seal of the pouch containing the PBE is compromised; B/E Aerospace SB No. 119003-35-009, Rev. 001, dated April 12, 2016, describes procedures for replacing PBE, P/N 119003-11 with P/N 119003-21; and B/E Aerospace SB No. 119003-35-013, Rev. 002, dated July 19, 2017, describes procedures for inspecting PBE P/N 119003-21 to determine the serial number and replacing any within the specified serial number range. 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 not requiring the disposal of the PBE as specified in the related service information because we have determined that owner/operators use various methods for disposal, which includes returning the PBE to the manufacturer. Therefore, we have not required the use of only one method of disposal. However, given the potential concern with activation of certain PBE units during disposal, we encourage coordination with the manufacturer and awareness of the disposal methods.

We estimate that this AD affects 9,000 products installed on airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We estimate the following costs to replace any affected PBE P/N 119003-21 units that fall within the affected serial number range. We have no way of determining the number of aircraft that might need these repairs/replacements:

The cost difference between AD 2016-11-20 and this AD is the cost of inspecting for serial number determination and replacing the affected serial numbers. This part of the AD could potentially affect 2,070 PBE units.

According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

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

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

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to small airplanes and domestic business jet transport airplanes to the Director of the Policy and Innovation Division.

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

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

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

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

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

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

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

Background

On August 29, 2017, the FAA published a final rule entitled, “Prohibition Against Certain Flights in the Damascus (OSTT) Flight Information Region (FIR).” In that final rule, which became effective August 29, 2017, the FAA amended 14 CFR part 91. The FAA inadvertently failed to include an amendment number for part 91 in the heading information of the final rule. The correct amendment number is 91-348.

In the final rule, FR Doc No: 2017-18322, published on August 29, 2017, at 82 FR 40944 make the following correction:

1. On page 40944 in the heading of the final rule, revise “Amdt. No. 91-?” to read as “Amdt. No. 91-348”.

This rule amends Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), by establishing, amending, suspending, or removes SIAPS, Takeoff Minimums and/or ODPS. The complete regulatory description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97.20. The applicable FAA forms are FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, and 8260-15B when required by an entry on 8260-15A.

The large number of SIAPs, Takeoff Minimums and ODPs, their complex nature, and the need for a special format make publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, Takeoff Minimums or ODPs, but instead refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP, Takeoff Minimums and ODP listed on FAA form documents is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAPs, Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure, and the amendment number.

The material incorporated by reference is publicly available as listed in the ADDRESSES section.

The material incorporated by reference describes SIAPS, Takeoff Minimums and/or ODPS as identified in the amendatory language for part 97 of this final rule.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as Amended in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts.

The circumstances that created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPs and Takeoff Minimums and ODPs, an effective date at least 30 days after publication is provided.

Further, the SIAPs and Takeoff Minimums and ODPs contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making some SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26,1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) is amended by establishing, amending, suspending, or removing Standard Instrument Approach Procedures and/or Takeoff Minimums and Obstacle Departure Procedures effective at 0901 UTC on the dates specified, as follows:

This rule amends Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (NFDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated by reference under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, but refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained on FAA form documents is unnecessary.

This amendment provides the affected CFR sections, and specifies the SIAPs and Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure and the amendment number.

The material incorporated by reference is publicly available as listed in the ADDRESSES section.

The material incorporated by reference describes SIAPs, Takeoff Minimums and ODPs as identified in the amendatory language for part 97 of this final rule.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP and Takeoff Minimums and ODP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP and Takeoff Minimums and ODP as modified by FDC permanent NOTAMs.

The SIAPs and Takeoff Minimums and ODPs, as modified by FDC permanent NOTAM, and contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts.

The circumstances that created the need for these SIAP and Takeoff Minimums and ODP amendments require making them effective in less than 30 days.

Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making these SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97, (14 CFR part 97), is amended by amending Standard Instrument Approach Procedures and Takeoff Minimums and ODPs, effective at 0901 UTC on the dates specified, as follows:

We published a Notice of Proposed Rulemaking (NPRM) on November 30, 2016, requesting comment on a number of proposed amendments to title 31 CFR part 210 (part 210). 81 FR 86302. Part 210 governs the use of the ACH Network by Federal agencies. The ACH Network is a nationwide electronic fund transfer (EFT) system that provides for the inter-bank clearing of electronic credit and debit transactions and for the exchange of payment-related information among participating financial institutions. Part 210 incorporates the NACHA Operating Rules, with certain exceptions. From time to time the Fiscal Service amends part 210 in order to address changes that NACHA periodically makes to the NACHA Operating Rules or to revise the regulation as otherwise appropriate.

Currently, part 210 incorporates the NACHA Operating Rules as set forth in the 2013 NACHA Operating Rules & Guidelines book. NACHA has adopted a number of changes to the NACHA Operating Rules since the publication of the 2013 NACHA Operating Rules & Guidelines book. We proposed to incorporate in part 210 most, but not all, of these changes. We also proposed two changes to part 210, related to reversals and prepaid cards, that do not stem from a change to the NACHA Operating Rules.

We received three comment letters on the NPRM. Two of the commenters were industry trade associations and the third was NACHA. Commenters were generally pleased that Fiscal Service proposed to adopt most of the 2014, 2015 and 2016 amendments to the NACHA Operating Rules, but commented that three of the exceptions to the NACHA Operating Rules proposed in the NPRM are inappropriate and should not be adopted. Commenters also stated that Fiscal Service's approach to adopting Same Day ACH should be modified. Finally, commenters urged Fiscal Service to be more timely in addressing NACHA Rule changes.

In the 2015 amendments to the NACHA Operating Rules, NACHA added a new Section 1.11 to provide for the payment of an “Unauthorized Entry Fee.” Under this section, when an originating depository financial institution (“ODFI”) originates a debit Entry to a receiving depository financial institution (“RDFI”) to transfer funds from the account of a Receiver to an account of an Originator, and the Entry is returned on the basis that it is unauthorized, the ODFI agrees to pay an Unauthorized Entry Fee to the RDFI. In the NPRM, we proposed not to adopt the Unauthorized Entry Fee provisions of the NACHA Operating Rules because part 210 does not incorporate the provisions of the NACHA Operating Rules dealing with enforcement for noncompliance, and the government does not as a general matter subject itself to fines for violations of the NACHA Operating Rules.

Two of the commenters opposed Fiscal's Service's proposal to exempt the government from paying Unauthorized Entry Fees, arguing that the fees are not fines or penalties but service fees intended to compensate RDFIs for costs incurred by the RDFI in handling unauthorized Entries. NACHA commented that unlike a fine imposed for noncompliance, the fee is not imposed as a result of an enforcement process by NACHA, is not paid to NACHA (Fines and penalties imposed by NACHA pursuant to its enforcement process are paid by the participant that violated the NACHA Operating Rules directly to NACHA. See NACHA Operating Rules, App. Ten, Subpart 10.4.7.1.) and is not set at a level that is punitive in nature. Rather, it is based upon a NACHA cost study that assessed the burden that unauthorized entries place on RDFIs. According to NACHA, this allocation of cost to the party in the best position to mitigate the cost (i.e., through improvements to origination practices) provides an incentive to improve the quality of the network by reducing the number of unauthorized Entries that are initiated. NACHA also pointed out that the Unauthorized Entry Fee is specifically set at a level below actual RDFI cost in order to avoid creating a disincentive to ODFI participation in the network, and that nothing in the materials accompanying the development, balloting and adoption of the Unauthorized Entry Fee in any way characterized the fee as a fine or penalty. In short, NACHA asserts that the Unauthorized Entry Fee is no different from any other fees that the government would pay for services in which it participates and accordingly that the exclusion of the Unauthorized Entry Fees may amount to an improper taking of property without just compensation, in violation of the Takings Clause of the Fifth Amendment to the U.S. Constitution.

Based on this analysis we agree with the conclusion that the Unauthorized Entry Fee is in the nature of a fee for services rather than a fine or penalty and that it is appropriate for the government to pay the fee when it is the Originator of an Unauthorized Entry. Accordingly, we are accepting the Unauthorized Entry Fee provisions for government ACH transactions.

In 2015, the NACHA Operating Rules were amended to establish an inquiry process as a starting point to evaluate the origination activity of Originators and Third-Party Senders that reach the new administrative return and overall debit return rate levels. The identification of an Originator or Third-Party Sender with a return rate that is higher than the respective return rate level may trigger a review of the Originator's or Third-Party Sender's ACH origination procedures. At the conclusion of the inquiry, NACHA may determine that no further action is required, or it may take the next step and recommend to the ACH Rules Enforcement Panel that the ODFI be required to reduce the Originator's or Third-Party Sender's overall or administrative return rate below the established level.

As discussed above, Fiscal Service generally takes the position that it will not be subject to the enforcement provisions of the NACHA Operating Rules for noncompliance, including fines for violations of the provisions of the NACHA Operating Rules. Because the return rate level reporting provisions of the NACHA Rules are a basis for enforcement, Fiscal Service proposed not to adopt the return rate level reporting provisions. NACHA commented that Fiscal Service's concern with reporting return rate levels is misplaced because Section 2.17 is not an enforcement rule and that the provisions for enforcement of Section 2.17 are set forth at Appendix 10 to the NACHA Operating Rules, which is separately exempted from part 210.

Because the Federal government is the largest single participant in the ACH Network, NACHA indicated that information concerning the Federal government's return rate levels could be invaluable in connection with analyzing elevated return rates. NACHA asserted that this benefit far outweighs the minimal additional burden to the government of complying with the return rate reporting requirements and therefore requested that Fiscal Service modify the Proposed Rule to delete from part 210 the exclusion of Section 2.17 of the NACHA Operating Rules or, in the alternative, to limit the exclusion to Sections 2.17.2.2 through 2.17.2.6 of the amended NACHA Operating Rules.

In light of the value of the government's return rate levels for the ACH Network, Fiscal Service is accepting in the final rule the reporting requirement of Section 2.17 and limiting the exclusion to Sections 2.17.2.2 through 2.17.2.6.

In the NPRM we proposed to amend part 210 to address a requirement in the ACH Rules (NACHA Operating Rule 2.9.1) that requires that the Originator of a Reversing Entry make a reasonable attempt to notify the Receiver of the Reversing Entry and the reason for the Reversing Entry no later than the settlement date of the Entry. Fiscal Service has had experience with this requirement, which is not new, and has found that in attempting to contact Receivers regarding the reversal of a duplicate or erroneous Entry on behalf of federal agencies, efforts to reach Receivers, typically through the RDFI, are often unsuccessful. Adhering to the notification requirement impedes the timeliness and efficiency of originating reversals, which is disadvantageous both for Fiscal Service and for Receivers. Accordingly, we proposed to exclude this requirement from incorporation in part 210.

All of the commenters urged Fiscal Service to reconsider the proposed exclusion. Commenters noted that the purpose of the requirement is to ensure that, in the case of a credit Entry, the Receiver does not remove the funds received as a result of the Erroneous Entry before it can be reversed, and in the case of a debit Entry, the Receiver is notified quickly that funds were removed from their account in error and that the error will be reversed. Commenters pointed out that Section 2.9.1 does not impose an absolute requirement that an Originator notify the Receiver of the Reversing Entry, but only requires that the Originator make a “reasonable attempt” to do so. The commenters argued that the fact that Fiscal Service may find that despite its reasonable efforts it frequently is unable to reach the applicable Receiver does not undermine the importance and value of making the effort, because of the benefit that results in those instances where reasonable efforts are successful.

NACHA also observed that the obligation to make reasonable efforts to notify the Receiver should have no effect on the timeliness or efficiency of originating Reversing Entries because notice to the Receiver is not a prerequisite for initiating a Reversing Entry. Thus, the obligation to make a reasonable attempt to notify the Receiver should not prevent the initiation of a Reversing Entry.

In view of the fact that only a reasonable effort to notify the Receiver is required, and because Fiscal Service recognizes the value of notifying consumers of reversals when possible, Fiscal Service is not adopting the proposal to opt out of the reversal notification requirement.

In 2016 NACHA adopted an amendment that allows for same-day processing of ACH payments. Previously, the standard settlement period for ACH transactions was one or two business days after processing. The Same-Day ACH amendment enables Originators that desire same-day processing have the option to send Same Day ACH Entries to accounts at any RDFI. All RDFIs are required to receive Same-Day ACH Entries, which gives ODFIs and Originators the certainty of being able to send same day ACH Entries to accounts at all RDFIs in the ACH Network. The amendment includes a “Same-Day Entry fee” on each Same-Day ACH transaction to help mitigate RDFI costs for supporting Same-Day ACH.

The amendment has a phased implementation period, spreading from 2016 to 2018, with the following effective dates:

• Phase 1—September 23, 2016: ACH credits became eligible to be processed during two new Same-Day ACH windows with submission deadlines at 10:30 a.m. ET and 2:45 p.m. ET, with settlement occurring at 1:00 p.m. ET and 5:00 p.m. ET, respectively. RDFIs are required to provide funds availability by the end of the RDFI's processing day. Applicable to ACH credits only and non-monetary Entries, with funds availability due at the end of the RDFI's processing day.

• Phase 2—September 15, 2017: ACH debits will become eligible for same-day processing during the two new Same-Day windows.

• Phase 3—March 16, 2018: RDFIs will be required to provide funds availability for same day credits no later than 5:00 p.m. at the RDFI's local time.

In the NPRM we proposed to accept NACHA's 2016 Same-Day amendments but with delayed implementation until August 30, 2017 of NACHA's Phase 1 implementation date where the government is receiving Same-Day credit Entries. The delayed implementation date reflects coding and reporting changes and testing that must be undertaken to enable the processing of incoming Same-Day credit Entries by Fiscal Service's ACH credit processing systems. We did not propose to delay the government's implementation of the NACHA Same-Day ACH amendment's Phase 2 or Phase 3 implementation dates.

NACHA commented that it would be inequitable for the Fiscal Service to reserve the right to require RDFIs to process Same Day Entries originated by the government, but refuse to process Same Day Entries that are received by the government. By doing so, the government would receive the benefit of the new rules, without having to accept any of the obligations with which all other Participating DFIs must comply. For this reason, NACHA recommended that the NPRM be revised to provide that the government will not originate Same Day Entries until it is ready to receive Same Day Entries, regardless of the effective date of a final rule on part 210.

Second, NACHA requested that the final rule provide a date certain by which the government will begin receiving Same Day Entries, stating that the NPRM preamble indicated only that the government will implement Phase 1 for purposes of receiving Same Day Entries “no earlier than” August 30, 2017.

In the final rule we are providing a date certain of September 15, 2017 for implementation, and applying that date to both the origination and receipt of Same Day entries, as requested.

With respect to Fiscal Service's rulemaking process to review ACH Rules generally, NACHA commented that by waiting in some cases until after a rules change has been implemented, the current process can be disruptive to other participants and may cause them to incur additional and unnecessary costs. NACHA urged Fiscal Service to establish a process to review amendments to the NACHA Operating Rules on at least an annual basis, arguing that because Fiscal Service actively participates in the NACHA rulemaking process, the government has ample opportunity to understand and evaluate NACHA rule proposals well in advance of their respective effective dates.

We understand that the delay in the government's review and adoption of ACH rule changes may inconvenience ACH network participants. However, Fiscal Service cannot address ACH rule changes other than through the notice-and-comment rulemaking process required under the Administrative Procedure Act. The rulemaking process is inherently cumbersome and time-consuming, typically taking a year to move through the process of developing and publishing a proposed rule, ultimately followed by a final rule. Fiscal Service will work toward addressing ACH rule changes on as timely a basis as possible in light of regulatory and resource limitations.

In the Final Rule we are adopting all of the amendments to part 210 that were proposed in the NPRM, as follows:

The 2014 edition of the NACHA Operating Rules & Guidelines contains changes related to the following amendments:

• Person-to-Person Payments via ACH;

• IAT Modifications; Proof of Authorization for Non-Consumer Entries;

• Proof of Authorization for Non-Consumer Entries;

• Dishonored Returns and Contested Dishonored Returns Related to an Unintended Credit to a Receiver;

• Reclamation Entries—Corrections to Rules Governing Authorizations;

• Incomplete Transaction Clarification;

• Use of Tilde as Data Segment Terminator;

• Editorial Clarification—Non-Consumer Receiver's Obligation to Credit Originator's Account;

• Prenotification Entries—Reduction in Waiting Period for Live Entries;

• Notification of Change (NOC)—Removal of Change Code C04 (Incorrect Individual Name/Receiving Company Name); and

• ACH Operator Edit for Returns.

We are incorporating in part 210 all of the foregoing amendments, which are summarized below, except the amendment relating to reclamation entries.

This amendment standardized the use of the ACH Network for Person-to-Person (P2P) Entries by expanding the Internet-Initiated/Mobile (WEB) SEC Code to accommodate credit Entries transmitted between consumers (P2P transactions). A P2P Entry is defined as “a credit Entry initiated by or on behalf of a holder of a Consumer Account that is intended for a Consumer Account of a Receiver.” The amendment also modified the definition of a Customer Initiated Entry (CIE) to “a credit Entry initiated by or on behalf of the holder of a Consumer Account to the Non-Consumer Account of a Receiver.” These definitional changes ensure there is a clear differentiation between WEB credit and CIE—i.e., CIE for a bill payment from a consumer to a business, and WEB credit for a P2P transaction from one consumer to another or between consumer accounts belonging to the same person. In addition, this amendment clarified the treatment of NOCs related to credit WEB Entries and CIE Entries.

We are accepting this amendment.

This amendment revised the NACHA Operating Rules to update the rules and formatting of the International ACH Transaction (IAT) in order to facilitate more accurate screening and compliance with OFAC sanctions policies. This modification requires a Gateway to identify within an Inbound IAT Entry (1) the ultimate foreign beneficiary of the funds transfer when the proceeds from a debit Inbound IAT Entry are for further credit to an ultimate foreign beneficiary that is a party other than the Originator of the debit IAT Entry, or (2) the foreign party ultimately funding a credit Inbound IAT Entry when that party is not the Originator of the credit IAT Entry. This amendment revised the description of the Payment Related Information Field as it relates to the IAT Remittance Addenda Record to establish specific formatting requirements for inclusion of the ultimate foreign beneficiary's/payer's name, street address, city, state/province, postal code, and ISO Country Code. The amendment also requires an Originator, Third-Party Sender, ODFI, or Gateway transmitting an IAT Entry to identify any country named within the IAT Entry by that country's 2-digit alphabetic ISO Country Code, as defined by the International Organization for Standardization's (ISO) 3166-1-alpha-2 code list.

We are accepting this amendment.

This amendment established a minimum standard for proof of authorization for Non-Consumer Entries to aid in the resolution of unauthorized or fraudulent debits to businesses, particularly those where no trading partner relationship/agreement exists between the Originator and Receiver. This change permits an RDFI to request proof of a Non-Consumer Receiver's authorization for a CCD, CTX, or an Inbound IAT Entry to a Non-Consumer Account. The ODFI must provide the required information to the RDFI at no charge within ten banking days of receiving a written request for such information from the RDFI. The amendment also requires the Originator to provide such proof of authorization to the ODFI for its use or for use by the RDFI.

The amendment provides two methods by which an ODFI can comply with the RDFI's request for proof of authorization. The first is to provide an accurate record of the authorization. The second is to provide the Originator's contact information that can be used for inquiries about authorization of Entries. At a minimum, this contact information must include (1) the Originator's name, and (2) the Originator's phone number or email address for inquiries regarding authorization of Entries.

We are accepting this amendment.

This amendment established the right of an ODFI to dishonor the Return of a debit Erroneous Entry if the Return Entry results in an unintended credit to the Receiver because (1) the Return Entry relates to a debit Erroneous Entry, (2) the ODFI has already originated a credit Reversing Entry to correct the Erroneous Entry, and (3) the ODFI has not received a Return of that credit Reversing Entry.

Similarly, under this amendment an ODFI may dishonor the Return of a debit Reversing Entry if the Return Entry results in an unintended credit to the Receiver because (1) the Return Entry relates to a debit Reversing Entry that was intended to correct a credit Erroneous Entry, and (2) the ODFI has not received a Return of that credit Erroneous Entry. The amendment requires an ODFI dishonoring a debit Return Entry under either of these conditions to warrant that it originated a Reversal in an effort to correct the original erroneous transaction and therefore is dishonoring the Return of the debit Erroneous Entry or the debit Reversing Entry, either of which causes an unintended credit to the Receiver. The amendment also establishes the right of an RDFI to contest this type of dishonored Return if either of the following conditions exists: (1) The RDFI returned both the Erroneous Entry and the related Reversal; or (2) the RDFI is unable to recover the funds from the Receiver.

We are accepting this amendment.

This amendment made several corrections to the rules governing the authorization of Reclamation Entries. These changes address technical and drafting discrepancies between Reversing Entries and Reclamation Entries in the NACHA Operating Rules and make the rules related to Reclamation Entries consistent with those for Reversing Entries to the extent possible.

We are not incorporating this amendment in part 210. Part 210 generally excludes all NACHA Operating Rules relating to the reclamation of benefit payments because part 210 contains specific provisions on the reclamation of Federal benefit payments. No revision to the text of part 210 is required to exclude this amendment from part 210 because the amendment modifies Section 2.10 of the NACHA Operating Rules, which is already inapplicable to the government under § 210.2(d)(2).

The Incomplete Transaction Clarifications amendment recognizes certain ARC, BOC, and POP Entries to Non-Consumer Accounts as eligible for return under the Incomplete Transaction Rule. This change streamlines RDFIs' processing of ARC, BOC, and POP returns and improves their ability to comply with the NACHA Operating Rules by eliminating different processing requirements for unauthorized/improper consumer and non-consumer ARC, BOC, and POP Entries, which share the same Standard Entry Class Code. The change restores the RDFI's ability to rely solely on the Standard Entry Class Code when determining handling requirements for specific types of Entries. This amendment also added specific references to “consumer” Receivers, where appropriate, to add clarity regarding the scope of the Incomplete Transaction Rules.

This amendment modifies Article Three, Subsection 3.12.3 (Incomplete Transaction) to add the word “consumer” to clarify that the Receiver of an Incomplete Transaction is generally the owner of a consumer account, with one specific exception. The amendment also adds language to this subsection to state that an ARC, BOC, or POP Entry may also be considered an Incomplete Transaction regardless of whether the account that is debited is a Consumer Account or a Non-Consumer Account. The amendment made corresponding changes to the definition of an Incomplete Transaction in Article Eight, Section 8.50 and clarified that a Written Statement of Unauthorized Debit must be accepted for any Incomplete Transaction involving any ARC, BOC, or POP Entry.

We are accepting this amendment.

This amendment corrected two IAT field descriptions, “Originator City and State/Province” and “Receiver City and State/Province,” to clarify that the tilde (“~”) is a valid data segment terminator.

We are accepting this amendment.

This amendment revised the text and title of Article Three, Subsection 3.3.1.3 (Non-Consumer Receiver Must Credit Originator's Account) to make the section's intent clearer and easier to understand for ACH Network participants. This change was editorial in nature only.

We are accepting this amendment.

This amendment reduced the six banking-day waiting period between initiation of a Prenotification and “live” Entries for Originators choosing to originate Prenotes. This amendment also modified the NACHA Operating Rules related to Notifications of Change to clarify the Originator's obligations with respect to an NOC received in response to a Prenote. This change permits an Originator that has originated a Prenotification Entry to a Receiver's account to initiate subsequent Entries to the Receiver's account as soon as the third Banking Day following the Settlement Date of the Prenotification Entry, provided that the ODFI has not received a return or NOC related to the Prenotification.

We are accepting this amendment.

This amendment removed the Notification of Change Code—C04 (Incorrect Individual Name/Receiving Company Name) from the NACHA Operating Rules. Change Code C04 (Incorrect Individual Name/Receiving Company Name) had been used by RDFIs to request a correction to the name of the Receiver indicated in an ACH Entry. As with any Notification of Change, the RDFI that transmitted an NOC with this change code warranted the accuracy of the corrected data (in this case, the Receiver's name). The Originator was then obligated to make the requested change within six banking days or prior to initiating a subsequent Entry, whichever is later.

In certain scenarios, the use of C04 created compliance and liability challenges for the Originator, ODFI, and RDFI. Generally speaking, an ACH transaction involves a mutual customer of both the Originator and the RDFI. In the event that the Receiver's name on a debit Entry was different from the name on the account, most RDFIs would either post the Entry based solely on the account number or return the transaction using Return Reason Code R03 (No Account/Unable to Locate Account). In some cases, RDFIs transmitted NOCs using Change Code C04 to instruct the Originator to change the Receiver's name on future Entries. The use of C04 presented additional risk to the RDFI and the ODFI and/or the Originator because the RDFI was warranting that the name change is accurate, but it did not always reflect the party with whom the Originator has the relationship. As a result, Originators were typically unable or unwilling to make the changes in accordance with their obligations under the NACHA Operating Rules. An Originator continuing to debit its customer without making the change warranted by the RDFI did so in violation of the current Rules, creating challenges and conflict for all parties. Eliminating Change Code C04 (Incorrect Individual Name/Receiving Company Name) removed the challenges and potential rules violations that Originators faced when they receive a request for a name change that they were unable to make. Under the amendment, an Originator can rely on its own contracts and records to properly identify the name of the Receiver being credited or debited without being in violation of the NACHA Operating Rules because of the failure to respond to an NOC.

Eliminating Change Code C04 (Incorrect Individual Name/Receiving Company Name) lessens the risk to the RDFI as it warrants that information contained in an NOC is correct. A change as significant as a name change should be accomplished through communication of the Receiver with the Originator so that the authorization held by the Originator is accurate. The RDFI that identifies a name mismatch can post the Entry based solely on the account number, return the Entry as R03, or choose to assist its Receiver by communicating directly with the ODFI/Originator. Any of these options should cause the Originator and the Receiver to communicate relating to needed changes while relieving the RDFI of the warranty that the information is correct.

We are accepting this amendment.

This amendment incorporated an additional ACH Operator edit within the listing of ACH Operator file/batch reject edit criteria specified within Appendix Two of the NACHA Operating Rules. Specifically, this edit requires ACH Operators to reject any batch of Return Entries in which RDFI returns and ACH Operator returns are commingled. By definition, different parties are responsible for generating each type of return, and each must be separately identified within the Company/Batch Header Record as the sender of the batch. This ACH Operator edit codifies this fact within the NACHA Operating Rules and ensures consistent processing of return batches by all ACH Operators.

We are accepting this amendment.

The 2015 edition of the NACHA Operating Rules contains changes related to the following amendments: 1

• ACH Network Risk and Enforcement;

• Improving ACH Network Quality—Unauthorized Entry Fee;

• Clarification on Company Identification for P2P WEB Credit Entries;

• Point-of-Sale Entries—Clarification of General Rule;

• Return Fee Entry Formatting Requirements;

• Entry Detail Record for Returns—Clarification Regarding POP Entries;

• Clarification of RDFI's Obligation to Recredit Receiver;

• Clarification on Prenotification Entries and Addenda Records; and

• ACH Operator Edit for Returns.

We are incorporating in part 210 all of the foregoing amendments, which are summarized below, other than some provisions of the amendment relating to ACH Network Risk and Enforcement.

This amendment expanded existing rules regarding ODFIs' and Third-Party Senders' requirements for risk management and origination practices, such as return rate levels. It also expanded NACHA's authority to initiate enforcement proceedings for a potential violation of the NACHA Operating Rules related to unauthorized Entries.

The amendment reduced the threshold for unauthorized debit Entries (Return Reason Codes R05, R07, R10, R29, and R51) from 1.0 percent to 0.5 percent and also established two new return rate levels for other types of returns. First, a return rate level of 3.0 percent will apply to debit entries returned due to administrative or account data errors (Return Reason Codes R02—Account Closed; R03—No Account/Unable to Locate Account; and R04—Invalid Account Number Structure). Second, a return rate level of 15.0 percent will apply to all debit entries (excluding RCK entries) that are returned for any reason.

The amendment also established an inquiry process, which is separate and distinct from an enforcement proceeding, as a starting point to evaluate the origination activity of Originators and Third-Party Senders that reach the new administrative return and overall debit return rate levels. The identification of an Originator or Third-Party Sender with a return rate that is higher than the respective return rate level may trigger a review of the Originator's or Third-Party Sender's ACH origination procedures. At the conclusion of the inquiry, NACHA may determine that no further action is required, or it may take the next step and recommend to the ACH Rules Enforcement Panel that the ODFI be required to reduce the Originator's or Third-Party Sender's overall or administrative return rate below the established level.

In this new role, the ACH Rules Enforcement Panel will be the final authority in deciding, after the completion of the inquiry, whether the ODFI should be required to reduce the Originator's or Third-Party Sender's overall or administrative return rate. After reviewing NACHA's recommendation, the Panel can decide either to take no action, at which point the case would be closed, or to have NACHA send a written directive to the ODFI, which would require the reduction of the Originator's or Third-Party Sender's administrative or overall return rate.

We are incorporating in part 210 the provisions of the amendment relating to return rate level reporting at section 2.17. We are not accepting the provisions for enforcement of Section 2.17 that are set forth at Appendix 10 to the NACHA Operating Rules, which is separately exempted from part 210. The exclusion from Section 2.17 in the regulation text is limited to Sections 2.17.2.2 through 2.17.2.6.

This amendment explicitly prohibited the reinitiation of Entries outside of the express limited circumstances under which they are permitted under the NACHA Operating Rules. The amendment also added a specific prohibition against reinitiating a transaction that was returned as unauthorized. The amendment further included an anti-evasion provision, specifying that any other Entry that NACHA reasonably believes represents an attempted evasion of the defined limitations will be treated as an improper reinitiation. The ACH Rules Enforcement Panel will have final authority in deciding whether a specific case involves an attempted evasion of the limitations on reinitiation.

To avoid unintended consequences from these clarifications, the amendment included two categories of Entries that will not be considered reinitiations. First, the amendment clarified that a debit Entry in a series of preauthorized recurring debit Entries will not be treated as a reinitiated Entry, even if the subsequent debit Entry follows a returned debit Entry, as long as the subsequent Entry is not contingent upon whether an earlier debit Entry in the series has been returned. Second, the amendment expressly stated that a debit Entry will not be considered a “reinitiation” if the Originator obtains a new authorization for the debit Entry after the receipt of the Return.

The amendment requires a reinitiated Entry to contain identical content in the following fields: Company Name, Company ID, and Amount. Further, the amendment permits modification to other fields only to the extent necessary to correct an error or facilitate processing of an Entry. This change allows reinitiations to correct administrative errors, but prohibits reinitiation of Entries that may be attempts to evade the limitation on the reinitiation of returned Entries by varying the content of the Entry. Finally, the amendment addressed certain technical issues associated with the reinitiation requirements.

We are accepting the reinitiation provisions of the amendment.

The amendment added a direct obligation on Third-Party Senders to monitor, assess and enforce limitations on their customer's origination and return activities in the same manner the NACHA Operating Rules require of ODFIs. Prior to this amendment, the NACHA Operating Rules required ODFIs to establish, implement, periodically review and enforce exposure limits for their Originators and Third-Party Senders. The ODFI was required to monitor each Originator's and Third-Party Sender's origination and return activity across multiple Settlement Dates, enforce restrictions on the types of Entries that may be originated and enforce the exposure limit. If an ODFI enters into a relationship with a Third-Party Sender that processes Entries such that the ODFI itself cannot or does not perform these monitoring and enforcement tasks with respect to the Originators serviced by the Third-Party Sender, the Third-Party Sender must do so. The amendment added a specific statement of this obligation.

We are accepting the Third-Party Sender provisions of the amendment.

The amendment provided NACHA with the express authority to bring an enforcement action based on the origination of unauthorized entries. To ensure the judicious use of the expanded authority, the amendment requires the ACH Rules Enforcement Panel to validate the materiality of this type of enforcement case before NACHA can initiate any such proceeding. In addition, the amendment encourages RDFIs to voluntarily provide to NACHA information, such as return data, that may be indicative of a potential rules violation for improper authorization practices by other ACH Network participants, even if the RDFI is not interested in itself initiating a rules enforcement proceeding. Such early sharing of information regarding unusual return rates or unauthorized transactions can help eliminate improper activities more quickly.

We are not incorporating in part 210 the provisions of the amendment that relate to NACHA's enforcement authority. Part 210 excludes the government from the risk investigation and enforcement provisions of the NACHA Operating Rules. Fiscal Service tracks unauthorized return rates for Federal agencies and will use the new unauthorized return limits and reinitiation limitations in overseeing agency ACH origination activity. No change to the text of part 210 is required to exclude these provisions because part 210 already excludes Appendix Ten of the NACHA Operating Rules, which governs rules enforcement.

This amendment requires an ODFI to pay a fee to the RDFI for each ACH debit that is returned as unauthorized (Return Reason Codes R05, R07, R10, R29 and R51). RDFIs will be compensated for a portion of the costs they bear for handling unauthorized transactions, and will experience reduced costs due to a reduction in unauthorized transactions over time. The amendment provides that ODFIs and RDFIs authorize debits and credits to their accounts for the collection and distribution of the fees. IAT transactions are not covered by the fee, but could be included in the future. The amendment defines a methodology by which NACHA staff will set and review every three years the amount of the Unauthorized Entry Fee. In setting the amount of the fee, NACHA staff will apply several stated principles, including the review of RDFI cost surveys. Based on the results of the current data collection on RDFIs' costs for handling unauthorized transactions, NACHA has estimated that the fee amount will be in the range of $3.50-$5.50 per return.

We are accepting the Unauthorized Entry Fee provisions of the amendment.

This amendment added language to the Company Identification field description to clarify content requirements for Person-to-Person (P2P) WEB credit Entries.

For P2P WEB credit Entries, the Company/Batch Header Record identifies the P2P service provider (i.e., the consumer Originator's own financial institution or a third-party service provider) rather than the consumer Originator. Prior to the amendment, the NACHA Operating Rules specifically defined service provider content requirements for the Company Name field, but omitted the same clarification for the Company Identification, which is a related field. The purpose of the amendment was to eliminate any potential confusion over proper formatting of this field.

We are accepting this amendment.

This amendment re-aligned the general rule for POS Entries with the definition of POS Entries in Article Eight. A POS Entry is generally considered to be a debit Entry initiated at an electronic terminal by a consumer to pay an obligation incurred in a point-of-sale transaction. However, a POS Entry can also be an adjusting or other credit Entry related to the debit Entry, transfer of funds, or obligation (for example, a credit to refund a previous point-of-sale transaction). Prior to the amendment, the definition of POS within the NACHA Operating Rules recognized these Entries as both debits and credits, but the general rule for POS identified POS Entries only as debits. This amendment corrected the discrepancy.

We are accepting this amendment.

This amendment modified the description of the Individual Name Field in a PPD Return Fee Entry related to a returned ARC, BOC, or POP Entry to require that it contain the same information identified within the original ARC, BOC, or POP Entry. The Individual Name Field is optional for ARC, BOC, and POP; therefore, this field (1) may include the Receiver's name, (2) may include a reference number, identification number, or code that the merchant needs to identify the particular transaction or customer, or (3) may be blank.

The name of the Receiver must be included in all PPD Entries. With ARC, BOC, or POP Entries, where a reading device must be used to capture the Receiver's routing number, account number, and check serial number, it is difficult for the Originator to capture the Receiver's name in an automated fashion. For this reason, the NACHA Operating Rules do not require Originators to include the Receiver's name in the ARC, BOC, or POP Entry Detail Record. Originators are permitted the choice of including either the Receiver's name, or a reference number, identification number, or code necessary to identify the transaction, or the field may be left blank. Because information contained within the returned ARC, BOC, or POP Entry is typically used to create a related Return Fee Entry, the Receiver's name is likely not readily available to the Originator for use in the Return Fee Entry, especially when the Receiver's authorization for the Return Fee Entry was obtained by notice. This amendment established consistent formatting requirements with respect to the Receiver's name for check conversion entries and related return fees.

We are accepting this amendment.

This amendment added a footnote to the Entry Detail Record for Return Entries to clarify the specific use of positions 40-54 with respect to the return of a POP Entry. On a forward POP Entry, positions 40-54 represent three separate fields to convey (1) the check serial number (positions 40-48); (2) the truncated name or abbreviation of the city or town in which the electronic terminal is located (positions 49-52); and (3) the state in which the electronic terminal is located (positions 53-54). However, these three fields are not explicitly identified in the Entry Detail Record for Return Entries, which caused some confusion among users as to how to map such information from the original forward Entry into the Return Entry format.

We are accepting this amendment.

This amendment clarified that an RDFI's obligation to recredit a Receiver for an unauthorized or improper debit Entry is generally limited to Consumer Accounts, with certain exceptions for check conversion and international transactions. Prior to the NACHA Operating Rules simplification initiative in 2010, the rules governing a Receiver's right to recredit for unauthorized debit entries clearly limited this provision to debit Entries affecting Consumer Accounts, except as expressly provided for ARC, BOC, IAT, and POP Entries (which can affect both consumer and business accounts). However, when rules language was combined and revised during the simplification process into a general discussion on recredit, some of this clarity was lost, resulting in language that was somewhat ambiguous and the cause of confusion for some ACH participants. This change more clearly defines the intent of the rule requirement for an RDFI to recredit a Receiver.

We are accepting this amendment.

This amendment revised the NACHA Operating Rules to clarify that, with the exception of IAT Entries, a prenotification Entry is not required to include addenda records that are associated with a subsequent live Entry. Generally speaking, the format of a Prenotification Entry must be the same as the format of a live dollar Entry. There are, however, some differences between Prenotes and live Entries to which the Prenotes relate:

• The dollar amount of a Prenotification Entry must be zero;

• a Prenotification Entry is identified by a unique transaction code; and

• addenda records associated with a live Entry are not required with Prenotes (unless the Prenote relates to an IAT Entry).

While the first two formatting criteria above for Prenotification Entries are clearly defined within the technical standards and are commonly understood by industry participants, the issue of whether Prenotification Entries require addenda records was somewhat ambiguous. The amendment eliminated that ambiguity.

We are accepting this amendment.

This amendment incorporated an additional ACH Operator edit within the listing of ACH Operator file/batch reject edit criteria specified within Appendix Two of the NACHA Operating Rules. Specifically, this edit requires ACH Operators to reject any batch of Return Entries in which RDFI returns and ACH Operator returns are commingled. By definition, different parties are responsible for generating each type of return, and each must be separately identified within the Company/Batch Header Record as the sender of the batch. This ACH Operator edit codifies this fact and ensures consistent processing of return batches by all ACH Operators.

We are accepting this amendment.

The 2016 edition of the NACHA Operating Rules & Guidelines contains changes related to the following amendments: 2

• Same-Day ACH: Moving Payments Faster;

• Disclosure Requirements for POS Entries;

• Recrediting Receiver—Removal of Fifteen Calendar Day Notification Time Frame;

• Clarification of RDFI Warranties for Notifications of Change; and

• Minor Rules Topics.

We are incorporating in part 210 all of the foregoing amendments except that we are delaying our implementation of Same-Day ACH as discussed below.

This amendment allows for same-day processing of ACH payments. Previously, the standard settlement period for ACH transactions is one or two business days after processing. The Same-Day ACH amendment enables the option for same-day processing and settlement of ACH payments through new ACH Network functionality without affecting existing ACH schedules and capabilities. Originators that desire same-day processing have the option to send Same Day ACH Entries to accounts at any RDFI. All RDFIs are required to receive Same-Day ACH Entries, which gives ODFIs and Originators the certainty of being able to send same day ACH Entries to accounts at all RDFIs in the ACH Network. The amendment includes a “Same-Day Entry fee” on each Same-Day ACH transaction to help mitigate RDFI costs for supporting Same-Day ACH.

The amendment has a phased implementation period, spreading from 2016 to 2018, with the following effective dates:

• Phase 1—September 23, 2016: ACH credits became eligible to be processed during two new Same-Day ACH windows with submission deadlines at 10:30 a.m. ET and 2:45 p.m. ET, with settlement occurring at 1:00 p.m. ET and 5:00 p.m. ET, respectively. RDFIs are required to provide funds availability by the end of the RDFI's processing day. Applicable to ACH credits only and non-monetary Entries, with funds availability due at the end of the RDFI's processing day.

• Phase 2—September 15, 2017: ACH debits will become eligible for same-day processing during the two new Same-Day windows.

• Phase 3—March 16, 2018: RDFIs will be required to provide funds availability for same day credits no later than 5:00 p.m. at the RDFI's local time.

The existing next-day ACH settlement window of 8:30 a.m. ET will not change. With the addition of the new Same-Day ACH processing windows, the ACH Network will provide three opportunities for ACH settlement each day.

Virtually all types of ACH payments will be eligible for same-day processing by the end of the implementation period. The only ACH transactions ineligible for same-day processing will be IAT transactions and individual transactions over $25,000. In addition to credits and debits, the ACH Network supports a number of transaction types that do not transfer a dollar value. Non-monetary transactions include Prenotifications; Notifications of Change (NOCs); Zero Dollar Entries that convey remittance information using CCDs and CTXs; and Death Notification Entries. With the exception of Prenotifications for future debit Entries, these non-monetary transactions are eligible for same-day processing from the outset. Automated Enrollment Entries (ENRs) do not use Effective Entry Dates. Since there will not be a way to distinguish same day ENR Entries from next-day Entries, ENRs will not be processed as same day transactions.

Same-Day ACH transactions are identified by the ODFI and its Originator by using the current day's date in the Effective Entry Date field of the Company/Batch Header Record. (Note: The NACHA Operating Rules define the Effective Entry Date as “the date specified by the Originator on which it intends a batch of Entries to be settled.”) In addition, transactions intended for same-day processing that carry a current day Effective Entry Date must meet an ACH Operator's submission deadline for same-day processing. For example, transactions originated on Tuesday, October 10, 2017 that are intended for same-day processing must have an Effective Entry Date of “171010” in the Company/Batch Header Record and be submitted to an ACH Operator no later than the 2:45 p.m. ET deadline to ensure same-day settlement. Any Entry carrying the current day's date in the Effective Entry Date field that is submitted prior to an ACH Operator's same-day processing submission deadline will be handled as a Same-Day ACH transaction and assessed the Same-Day Entry fee.

ACH transactions submitted to an ACH Operator with stale or invalid Effective Entry Dates will be settled at the earliest opportunity, which could be the same day. If the transactions are submitted prior to the close of the second same-day processing window at 2:45 p.m. ET, the Entries will be settled the same day and the Same-Day Entry fee will apply. If the transactions are submitted to the ACH Operator after 2:45 p.m. ET, the Entries will be settled the next day and the Same-Day Entry fee will not apply.

The amendment allows same-day processing of return Entries at the discretion of the RDFI, whether or not the forward Entry was a Same-Day ACH transaction. Any return Entry is eligible for settlement on a same-day basis; the $25,000 per transaction limit and IAT restriction will not apply. Because returns are initiated and flow from RDFI to ODFI, return Entries processed on a same-day basis will not be subject to the Same-Day Entry fee.

RDFIs are not required to process returns on the same day that the forward Entry is received. The return Entry must be processed in such time that it is made available to the ODFI no later than the opening of business on the second banking day following the Settlement Date of the original Entry. RDFIs have the option of using any of the available settlement windows for returns, as long as the existing return time frame is met.

In order to ensure universal reach to any account at any RDFI, all RDFIs must implement Same-Day ACH. To assist RDFIs in recovering costs associated with enabling same-day transactions, the amendment includes a fee paid from the ODFI to the RDFI for each Same-Day ACH Entry. The fee provides a mechanism to help RDFIs mitigate investment and operating expenses and provide a fair return on their required investments. The initial Same-Day Entry fee is set at 5.2 cents per Same Day Entry. The fee is assessed and collected by the ACH Operators through their established monthly billing. The amendment includes a methodology to measure the effectiveness of the Same-Day Entry fee at five, eight and ten full years after implementation. After each review, the Same-Day Entry fee could be maintained or lowered, but not increased.

We are accepting the Same-Day amendment but with delayed implementation of NACHA's Phase 1 implementation date until September 15, 2017. Fiscal Service plans to enable agencies to originate Same-Day Entries in appropriate situations and is working with agencies to develop and publish guidance outlining the criteria and procedures to be used for originating Same-Day Entries. Fiscal Service believes that Same-Day credit Entries may be useful to agencies that need to make certain emergency or time-sensitive payments, including payments not exceeding $25,000 that are currently made by Fedwire. We believe that the majority of ACH credit Entries originated by the government are not suitable for same-day processing in light of the fee payable for Same-Day Entries, and therefore we anticipate that the government's origination of Same-Day Entries will be limited. We plan to publish guidance for agencies that will set forth both the criteria and the procedure for certifying a Same-Day ACH transaction. That guidance will indicate whether agencies should indicate their intent for same-day processing and settlement solely by utilizing the Effective Entry Date, or may also utilize the optional standardized content in the Company Descriptive Date field as a same-day transaction indicator.

The delayed implementation date reflects coding and reporting changes and testing that are underway to enable the processing of incoming Same-Day credit Entries by Fiscal Service's ACH credit processing systems. The U.S. government will not originate Same-Day entries prior to September 15, 2017 and any ACH Entry received by the government prior to that date will not be eligible for same-day settlement and will continue to settle on a future date (typically the next banking day) regardless of submission date and time. We are not delaying the government's implementation of the NACHA Same-Day ACH amendment's Phase 2 or Phase 3 implementation dates.

The 2016 NACHA Operating Rules incorporate in the rule text only those provisions of the Same-Day ACH amendment that have effective dates in 2016. However, in order to provide advance notice of the impact of the Phase 2 and 3 implementations, the 2016 Rules Book sets forth the sections of the NACHA Operating Rules affected by the Same-Day ACH amendment as they will read upon implementation in 2017 and 2018.

We are incorporating in part 210 the future changes relating to the Same-Day ACH amendment's Phase 2 and 3 implementation provisions scheduled for 2017 and 2018 as they appear in the 2016 NACHA Operating Rules & Guidelines book.

This amendment established an Originator/Third-Party Service Provider obligation to provide consumer Receivers with certain disclosures when providing those consumers with cards used to initiate ACH Point of Sale (POS) Entries. The amendment requires Originators or Third-Party Service Providers that issue ACH cards (or their virtual, non-card equivalent, collectively referred to as “ACH Cards”) to make the following disclosures in written or electronic, retainable form to a consumer prior to activation:

• The ACH Card is not issued by the consumer's Depository Financial Institution.

• POS Entries made with the ACH Card that exceed the balance in the consumer's financial institution account may result in overdrafts and associated fees, regardless of whether the consumer has opted to allow overdrafts with respect to debit cards issued by the Depository Financial Institution that holds the consumer's account.

• Benefits and protections for transactions made using the ACH Card may vary from those available through debit cards issued by the consumer's Depository Financial Institution.

The amendment included sample language for Originators or Third-Party Service Providers to consider in designing an ACH Card disclosure for purposes of compliance with the NACHA Operating Rules. This amendment will not affect Agencies because they do not issue ACH Cards.

We are accepting this amendment.

This amendment removed the fifteen calendar day notification period associated with an RDFI's obligation to promptly recredit a consumer account for an unauthorized debit Entry, and aligned the RDFI's recredit obligation with its ability to transmit an Extended Return Entry. Because of the extended return window for unauthorized consumer debits under the NACHA Operating Rules, prior to the amendment many RDFIs found the reference to the fifteen calendar day timing to be a source of confusion and misunderstanding. The amendment revised the NACHA Operating Rules to align the provision for prompt recredit with the RDFI's receipt of a Written Statement of Unauthorized Debit from the consumer and the RDFI's ability to transmit an Extended Return Entry (i.e., transmitted to the ACH Operator so that the Extended Return Entry is made available to the ODFI no later than opening of business on the banking day following the sixtieth calendar day following the settlement date of the original Entry). This change applies to unauthorized/improper entries bearing Standard Entry Class Codes (SECs) that are classified as consumer entries, as well as those that can be both consumer and non-consumer entries (ARC, BOC, POP, and IAT debit entries).

We are accepting this amendment.

This amendment modified the NACHA Operating Rules with respect to Notifications of Change (NOCs) to clarify aspects of: (1) The RDFI's warranties made with respect to its transmission of a Notification of Change or Corrected Notification of Change; and (2) the ODFI's warranties made with respect to usage of the corrected data within subsequent transactions. Specifically, the amendment clarified that the RDFI's warranty for information contained in a Notification of Change or Corrected Notification of Change is applicable only to the corrected information supplied by the RDFI.

This modification removed from the RDFI's warranty on NOCs the specific statement that the Receiver has authorized the change identified in the NOC, if the Receiver's authorization is required. This subsection has been misinterpreted to mean that it supersedes the ODFI's warranty that a subsequent Entry is properly authorized by the Receiver. The RDFI does not warrant that the Entry itself has been properly authorized by the Receiver, but only that the data supplied in the Corrected Data field is accurate. The warranty that any Entry (including a subsequent Entry that uses corrected data from an NOC) is properly authorized still lies with the ODFI per Article Two, Subsection 2.4.1.1 (The Entry is Authorized by the Originator and Receiver).

We are accepting this amendment.

These amendments changed four areas of the NACHA Operating Rules to address minor topics. Minor changes to the NACHA Operating Rules have little-to-no impact on ACH participants and no significant economic impact.

This amendment made minor, editorial clarifications to the language within Article Two, Subsections 2.5.4.2 (ODFI to Satisfy Periodic Statement Requirement) and 2.5.17.6 (ODFI to Satisfy Periodic Statement Requirement for Credit WEB Entries) to clarify the intent of language governing an ODFI's periodic statement obligations with respect to the origination of CIE and credit WEB Entries by consumers.

Periodic statement requirements typically are an obligation of the RDFI for the receipt of Entries to a consumer account. For CIE and WEB credits, however, the Originator of the ACH credit also is a consumer, thus putting periodic statement requirements on the ODFI as well for these entries. These clarifications do not affect the substance of the ODFI's obligation to identify on the consumer Originator's periodic statement the date, amount, and description of a transaction involving the consumer's account; rather, they simply recognize that the debiting of the consumer's account to provide funds for the CIE or WEB credit could be accomplished by something other than an ACH debit.

We are accepting this amendment.

The NACHA Operating Rules require ACH participants to utilize a commercially reasonable standard of encryption technology when transmitting any banking information related to an Entry via an Unsecured Electronic Network. This amendment removed the reference to 128-bit encryption technology as the minimum acceptable commercially reasonable standard, but retained the general reference to using a commercially reasonable level of encryption. The amendment also clarified that a commercially reasonable level of security must comply with current, applicable regulatory guidelines, which already impose more rigorous encryption obligations.

Prior to the amendment the NACHA Operating Rules established a minimum for this commercially reasonable encryption standard at the 128-bit RC4 encryption technology level. A task force of NACHA's former Internet Council, comprised of technology expert members, recommended that the specific reference to 128-bit RC4 encryption be removed, on the grounds that it is now out of date as a commercially reasonable standard.

We are accepting this amendment.

This amendment reintroduced the definition of a Zero-Dollar Entry within Article Eight (Definitions of Terms Used in These Rules) to correspond to unique technical references in the Appendices of the NACHA Operating Rules. Zero Dollar Entries are unique in that, although their dollar amount is zero, they bear remittance data that must be provided to the Receiver in an identical manner as “live” entries that transfer funds. The definition was removed in 2010 when the definition of a “Non-Monetary Entry” was introduced into the NACHA Operating Rules.

We are accepting this amendment.

In addition to being able to request the return of an Erroneous Entry, as permitted by the NACHA Operating Rules, this amendment revised the NACHA Operating Rules to permit an ODFI to request that an RDFI return any Entry that the ODFI claims was originated without the authorization of the Originator. This amendment also expanded the description of Return Reason Code R06 (Returned per ODFI's Request) to include Entries returned by the RDFI for this reason. This newly permissible circumstance reflects actual current industry practice with regard to the recovery of funds related to unauthorized credit origination.

Use of the ODFI Request for Return process is always optional on the part of both ODFIs and RDFIs. An RDFI will continue to be able to make its own business decision about whether to agree to return an Entry that the ODFI claims was originated without the authorization of the Originator. An RDFI responding to a request for the return of such an Entry will be indemnified under the NACHA Operating Rules against loss or liability by the ODFI.

We are accepting this amendment.

NACHA Operating Rule 2.9.1 requires that the Originator of a Reversing Entry make a reasonable attempt to notify the Receiver of the Reversing Entry and the reason for the Reversing Entry no later than the settlement date of the Entry. For the reasons discussed in Section I above, we are accepting this amendment.

In 2010, Fiscal Service amended part 210 to establish requirements that prepaid accounts receiving Federal payments must meet. 75 FR 80335. To be eligible to receive Federal payments, a card accessing a prepaid account must meet four conditions: (1) The card account must be held at an insured financial institution; (2) the account be set up to meet the requirements for pass through deposit or share insurance under 12 CFR part 330 or 12 CFR part 745; (3) the account may not be attached to a line of credit or loan agreement under which repayment from the card account is triggered by delivery of the Federal payment; and (4) the issuer of the card must comply with all of the requirements, and provide the Federal payment recipient with the same consumer protections, that apply to a payroll card under regulations implementing the Electronic Fund Transfer Act, 15 U.S.C. 1693a(1). See 31 CFR 210.5(b)(5)(i).

We required that issuers of prepaid cards provide Regulation E payroll card protections because when our prepaid rule was issued in 2010, Regulation E did not cover any prepaid cards other than payroll cards. However, on November 22, 2016, the Consumer Financial Protection Bureau (CFPB) published its final rule to amend Regulation E to cover prepaid accounts. 81 FR 83934. We are therefore amending our prepaid rule to replace the reference in § 210.5(b)(5)(i)(D) to “payroll card” with a reference to “prepaid account” so that issuers of prepaid accounts are required to provide the holder of an account with all of the consumer protections that apply to a prepaid account under the rules implementing the Electronic Fund Transfer Act. We are also conforming the references to use the CFPB's terminology of “prepaid account” rather than “prepaid card.” These changes are effective on April 1, 2018, the effective date of the CFPB's final rule.

In order to incorporate in part 210 the NACHA Operating Rule changes that we are accepting, we are replacing references to the 2013 NACHA Operating Rules & Guidelines book with references to the 2016 NACHA Operating Rules & Guidelines book. Several of the NACHA Operating Rule amendments that we are not incorporating are modifications to provisions of the NACHA Operating Rules that are already excluded under part 210. Other than replacing the references to the 2013 NACHA Operating Rules & Guidelines book, no change to part 210 is necessary to exclude those amendments.

We are amending the definition of “applicable ACH Rules” at § 210.2(d) to reference the rules published in NACHA's 2016 Rules & Guidelines book rather than the rules published in NACHA's 2013 Rules & Guidelines book. The definition has been updated to reflect the reorganization and renumbering of the NACHA Operating Rules. The reference in § 210.2(d)(5) to Section 2.17 has been revised to read Section 2.17.2.2-2.17.2.6 in order to carve out the return rate level reporting obligation. The reference in § 210.2(d)(6) to the NACHA Operating Rule governing International ACH Transactions section has been updated by replacing an obsolete reference to ACH Rule 2.11 with the correct reference to Section 2.5.8. A new paragraph (7) is added to exclude from part 210, until September 15, 2017, the provisions of Subsection 3.3.1.1, Section 8.99 and Appendix Three (definition of Effective Entry Date) relating to Same-Day Entries.

We are amending § 210.3(b) by replacing the references to the ACH Rules as published in the 2013 Rules & Guidelines book with references to the ACH Rules as published in the 2016 NACHA Operating Rules & Guidelines book. We are revising § 210.3(b) by consolidating former paragraphs (b)(1) and (b)(2) into a single paragraph. Previously, paragraph (b)(2) stated that any amendment to the applicable ACH Rules approved by NACHA after publication of the edition of the NACHA Operating Rules & Guidelines that are incorporated by reference do not apply to Government entries unless Fiscal Service expressly accepts the amendments by publishing notice of acceptance of the amendment in the Federal Register. We have replaced paragraph (b)(2) with a sentence that states that, to enforce an edition other than that specified in § 210.3(b), Fiscal Service must publish a document in the Federal Register and the material must be available to the public. The replacement wording is the standard sentence recommended by the Federal Register, and is not substantively different from the former paragraph (b)(2).

We are amending § 210.5(b)(5)(i)(D) to replace the references to “payroll card” with references to “prepaid account” in order to require issuers of prepaid accounts to which Federal payments are delivered to provide account holders with all of the consumer protections that will apply to a prepaid account under the rules adopted by the CFPB to implement the Electronic Fund Transfer Act and the Truth in Lending Act. These changes are effective on April 1, 2018, the effective date of the CFPB's final rule.

In § 210.6 we are replacing the reference to ACH Rule 2.4.4 with a reference to ACH Rule 2.4.5 to reflect the re-numbering of ACH Rule 2.4.4. This change is not substantive.

In § 210.8(b) we are replacing the reference to ACH Rule 2.4.4 with a reference to ACH Rule 2.4.5 to reflect the re-numbering of ACH Rule 2.4.4. This change is not substantive.

In this rule, Fiscal Service is incorporating by reference the 2016 NACHA Operating Rules & Guidelines book. The Office of Federal Register (OFR) regulations require that agencies discuss in the preamble of a final rule ways that the materials the agency proposes to incorporate by reference are reasonably available to interested parties or how it worked to make those materials reasonably available to interested parties. In addition, the preamble of the rule must summarize the material. 1 CFR 51.5(a). In accordance with OFR's requirements, the discussion in the Supplementary Information section summarizes the 2016 NACHA Operating Rules. Financial institutions utilizing the ACH Network are bound by the NACHA Operating Rules and have access to the NACHA Operating Rules in the course of their everyday business. The NACHA Operating Rules are available as a bound book or in online form from NACHA—The Electronic Payments Association, 2550 Wasser Terrace, Suite 400, Herndon, Virginia 20171, tel. 703-561-1100, [email protected].

The rule does not meet the criteria for a “significant regulatory action” as defined in Executive Order 12866. Therefore, the regulatory review procedures contained therein do not apply.

This rule is not a major rule pursuant to the CRA, 5 U.S.C. 801 et seq. It is not expected to lead to any of the results listed in 5 U.S.C. 804(2). This rule will take effect upon publication in the Federal Register. The amendment to § 210.5 is applicable on April 1, 2018.

Except for the amendments to § 210.5, this final rule is effective on September 11, 2017. Under the Administrative Procedure Act, a final rule may be published less than 30 days before its effective date “for good cause found and published with the rule.” 5 U.S.C. 553(d)(3). The purpose of a delayed effective date is to permit regulated entities to adjust their behavior before the final rule takes effect. As discussed above, this rule adopts, with some exceptions, the NACHA Operating Rules developed by NACHA—The Electronic Payments Association (NACHA) as the rules governing the use of the ACH Network by Federal agencies. The affected industry is already prepared for Federal agencies to implement this rule. Therefore, the Department of the Treasury finds good cause to dispense with a delayed effective date.

It is hereby certified that the rule will not have a significant economic impact on a substantial number of small entities. The rule imposes on the Federal government a number of changes that NACHA—The Electronic Payments Association, has already adopted and imposed on private sector entities that utilize the ACH Network. The rule does not impose any additional burdens, costs or impacts on any private sector entities, including any small entities. Accordingly, a regulatory flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) is not required.

Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532 (Unfunded Mandates Act), requires that the agency prepare a budgetary impact statement before promulgating any rule likely to result in a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 205 of the Unfunded Mandates Act also requires the agency to identify and consider a reasonable number of regulatory alternatives before promulgating the rule. We have determined that the rule will not result in expenditures by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. Accordingly, we have not prepared a budgetary impact statement or specifically addressed any regulatory alternatives.

For the reasons set out in the preamble, 31 CFR part 210 is amended as follows:

Regulations governing the Illex squid fishery are at 50 CFR part 648. The regulations require specifications for maximum sustainable yield, initial optimum yield, allowable biological catch (ABC), domestic annual harvest (DAH), domestic annual processing, joint venture processing, and total allowable levels of foreign fishing for the species managed under the Atlantic Mackerel, Squid, and Butterfish Fishery Management Plan (FMP). The procedures for setting the annual initial specifications are described in § 648.22.

The regulations at § 648.24(a)(2) require that when the NMFS Administrator of the Greater Atlantic Region (Regional Administrator) projects Illex squid catch will reach 95 percent of the DAH quota designated in the FMP, NMFS must prohibit Federal Illex squid vessel permit holders from fishing for, catching, possessing, transferring, or landing more than 10,000 lb (4,535 kg) of Illex squid per trip and landing no squid more than 10,000 lb (4,535 kg) once per calendar day for the remainder of the prohibition period. This type of prohibition effectively closes the directed Illex squid fishery. The Regional Administrator monitors the Illex squid fishery catch annually based on dealer reports, state data, and other available information. When 95 percent of the DAH has been reached, NMFS must provide at least 72 hours of notice to the public that this determination has been made. NMFS must also publish the date that the catch is projected to reach 95 percent of the quota, and the date when prohibitions on catch and landings for the remainder of the fishing year become effective.

The Regional Administrator has determined, based on dealer reports and other available information, that the Illex squid fleet will catch 95 percent of the total Illex squid DAH quota for the 2017 season through December 31, 2017, by September 1, 2017. Therefore, effective 0001 hr local time, September 1, 2017, federally permitted vessels may not fish for, catch, possess, transfer, or land more than 10,000 lb (4,535 kg) of Illex squid per trip and may not land more than 10,000 lb (4,535 kg) once per calendar day. In addition, vessels that have entered port before 0001 hr on September 1, 2017, may offload and sell more than 10,000 lb (4,535 kg) of Illex squid from that trip. Also, federally permitted dealers may not receive Illex squid from federally permitted Illex squid vessels that harvest more than 10,000 lb (4,535 kg) of Illex squid through 2400 hr local time, December 31, 2017, unless it is from a trip landed by a vessel that entered port before 0001 hr on September 1, 2017.

This action is required by 50 CFR part 648 and is exempt from review under Executive Order 12866.

NMFS finds good cause pursuant to 5 U.S.C. 553(b)(B) to waive prior notice and the opportunity for public comment because it would be contrary to the public interest and impracticable. The Illex squid fishery opened for the 2017 fishing year on January 1, 2017. Data and other information indicating the Illex squid fleet will have landed at least 95 percent of the 2017 DAH quota have only recently become available. Landings data is updated on a weekly basis, and NMFS monitors catch data on a daily basis as catch increases toward the limit. Further, high-volume catch and landings in this fishery increases total catch relative to the quota quickly. The regulations at § 648.24(a)(2) require such action to ensure that Illex squid vessels do not exceed the 2017 DAH quota. If implementation of this action is delayed to solicit prior public comment, the quota for the 2017 fishing year may be exceeded, thereby undermining the conservation objectives of the FMP. Also, the public had prior notice and full opportunity to comment on this process when these provisions were put in place. Based on these considerations, NMFS further finds, pursuant to 5 U.S.C 553(d)(3), good cause to waive the 30-day delayed effectiveness period for the reasons stated above.

Background

For the past 25 years, NMFS has mandated reporting of catch, landings, and trip information through vessel trip reports (VTR). Between 1992 and 1996, NMFS implemented this requirement for most vessels holding Federal fishing permits in Northeast Atlantic fisheries. In 2004, mandatory electronic reporting by federally permitted dealers was implemented for almost all federally-managed species. Requirements for weekly submissions of VTRs were implemented in 2010 for fisheries under catch shares, with weekly reporting later expanded to herring, mackerel, and surf clam/ocean quahog individual fishing quota fisheries. In July 2011, the NMFS Greater Atlantic Regional Fisheries Office (GARFO) approved the use of electronic reporting of VTRs on a limited and voluntary basis for a segment of the groundfish fleet, and, in 2013, NMFS made electronic vessel trip reports (eVTR) available as an alternative to submitting handwritten hardcopies for all fishery management plans (FMP) in the region.

Owners and operators of vessels possessing permits for fisheries managed by Mid-Atlantic Fishery Management Council (MAFMC) FMPs are required to submit a VTR for every commercial, party, or charter trip taken, regardless of where they fish (state or Federal waters) or what they catch. MAFMC-managed species that include a for-hire VTR requirement include black sea bass, bluefish, scup, summer flounder, tilefish, Atlantic mackerel, squid, and butterfish.

Current regulations require vessel owners or operators with permits for MAFMC-managed species to submit VTRs monthly to GARFO by the 15th day of the month following the month in which the trip occurred. The Atlantic Mackerel, Squid, and Butterfish FMP requires weekly VTR reporting. If a trip encompasses multiple NMFS statistical areas, a separate VTR must be submitted for each statistical area where fishing activity takes place. A separate VTR is also required for each reporting period. If a vessel does not land any fish on a trip, all trip information must be completed and “No Catch” entered in as the species code name. A VTR is required regardless of where fishing occurs, meaning that a vessel subject to these requirements in the Greater Atlantic must report even if they fish in the Southeast or any other region (does not apply to vessels holding only an American lobster permit). Because VTRs are in addition to any other reports which may be required by other Regions, states, or plans, multiple reports may be required. VTRs, and any records upon which the reports were based, must be kept on board the vessel for at least one year and retained by the owner/operator for a total of three years after the date of the last entry on the report.

The Omnibus eVTR Framework requires charter and party vessels that hold a permit for species managed by MAFMC FMPs, while on a trip carrying passengers for hire, to submit VTRs by electronic means. These vessels are required to submit these eVTRs through a NOAA-approved software application within 48 hours following the completion of a fishing trip. Federally permitted vessel owners and operators on commercial fishing trips will maintain the option to submit VTRs through hardcopy by mail or through electronic means.

We received six comments on the proposed rule (May 24, 2017, 82 FR 23770): Five from fishing industry members and one from a company that specializes in marine electronic reporting technology. All comments supported adopting this framework. We consolidated responses to similar comments and our responses are below.

Comment 1: All six commenters suggested that this action would improve the timeliness and accuracy of data used for management of the affected fisheries, and supported the implementation of this framework.

Response: We agree. This Framework was designed to result in more accurate and more timely data for use in better management of the fisheries affected by this action.

Comment 2: Four commenters suggested that eVTRs are more accurate and timely than the Marine Recreational Information Program (MRIP), which is the primary recreational data collection program.

Response: NMFS is mandated to use the best available science in making management decisions. Since 2005, Northeast VTR data has been incorporated into the effort estimate for the for-hire fleet at the end of the year. Recently, MRIP began incorporating VTR effort data into the preliminary in-season estimates. This framework will further increase the timeliness and accuracy of data used in future management decisions.

Comment 3: Two commenters suggested that some members of the charter/party fleet may have difficulty with electronic reporting due to lack of technological knowledge. They suggested that these industry members may need training in the use of this technology, and also suggested a delayed implementation of this rule to allow these industry members time to acclimate to the new requirements before the rule went into effect.

Response: We have incorporated a delay in implementation into this action, such that it will not take effect until six months after this rule is published. This is to allow the industry adequate time to update software and/or receive the training necessary to fulfill the requirements of this action. In addition, we will work with MAFMC and approved contractors to provide training sessions for vessel operators on creating and submitting eVTRs, which will provide the industry with the knowledge and ability to meet the reporting requirements of this Framework.

Comment 4: One commenter suggested that similar actions making eVTRs mandatory should be adopted in Southern Atlantic and Gulf of Mexico fisheries.

Response: Although we cannot modify another region's regulations, we are aware that the Gulf of Mexico Fishery Management Council is currently working with NMFS on a similar regulation for charter vessels and headboats in the Gulf of Mexico and Atlantic Region. We encourage providing such comments to the South Atlantic Fishery Management Council (1-(866)-SAFMC-10, [email protected]), the Gulf of Mexico Fishery Management Council (1-(888)-833-1844, [email protected]), and/or the NOAA Southeast Regional Office (1-(727)-824-5301).

The final rule for the eVTR Omnibus Framework contains a minor clarification to the proposed rule. Specifically, NMFS revised §  648.7(b)(1)(iii) of the proposed rule to include the stipulation that vessels must submit eVTR reports through a NOAA-approved software application. This clarification was necessary to match the MAFMC's intent for this action.

Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), the NMFS Assistant Administrator has determined that this final rule is consistent with the Atlantic Mackerel, Squid, and Butterfish FMP; the Bluefish FMP; the Summer Flounder, Scup, and Black Sea Bass FMP; the Tilefish FMP; other provisions of the Magnuson-Stevens Act; and other applicable law.

This final rule has been determined to be not significant for purposes of Executive Order 12866.

This action contains collection-of-information requirements subject to the Paperwork Reduction Act (PRA) that have been approved by the Office of Management and Budget (OMB) under Control Number 0648-0212.

Public reporting burden for the new eVTR requirement is estimated to average 3 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection information. NMFS estimates that this action will reduce time and cost burdens from what was previously approved. Specifically, NMFS estimates that this action will result in a 2-minute reduction from the previous time burden of 5 minutes per response for paper VTRs submitted by mail. Thus, the sum of the total burden on vessels impacted by this rule would be reduced by 642 hr to 10,866 annually. Additionally, the sum of reporting costs for impacted vessels would be reduced by $9,000 to $52,000 annually. Send comments regarding these burden estimates or any other aspects of the collection of information, including suggestions for reducing the burden, to the Regional Administrator (see ADDRESSES), and email to [email protected], or fax to (202) 395-5806.

Notwithstanding any other provisions of the law, no person is required to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number. All currently approved NOAA collections of information may be viewed at: http://www.cio.noaa.gov/services_programs/prasubs.html.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this rule will not have a significant economic impact on a substantial number of small entities. The factual basis for this determination was published in the proposed rule and is not repeated here. No public comments were received on the proposed rule regarding the certification, and NMFS has not received any new information that would affect its determination. As a result, a final regulatory flexibility analysis was not required and none has been prepared.

For the reasons set out in the preamble, 50 CFR part 648 is amended as follows: