Page Range | 49737-50058 | |
FR Document |
Page and Subject | |
---|---|
82 FR 50055 - Resuming the United States Refugee Admissions Program With Enhanced Vetting Capabilities | |
82 FR 50053 - United Nations Day, 2017 | |
82 FR 50051 - Delegation of Certain Functions and Authorities Under the Countering America's Adversaries Through Sanctions Act of 2017 | |
82 FR 50047 - Presidential Determination With Respect to the Efforts of Foreign Governments Regarding Trafficking in Persons | |
82 FR 49843 - Sunshine Act Meetings | |
82 FR 49745 - Bacillus amyloliquefaciens Strain F727; Exemption From the Requirement of a Tolerance | |
82 FR 49802 - Environmental Impact Statements; Notice of Availability | |
82 FR 49816 - Agency Information Collection Activities: Proposed Collection; Comment Request | |
82 FR 49834 - Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; Evaluation of the Food and Drug Administration's Education at the Point of Sale Campaign | |
82 FR 49817 - Medicare and Medicaid Programs: Approval of an Application From the Joint Commission (TJC) for Continued CMS Approval of Its Critical Access Hospital (CAH) Accreditation Program | |
82 FR 49819 - Medicare and Medicaid Programs; Quarterly Listing of Program Issuances-July Through September 2017 | |
82 FR 49857 - Agency Information Collection Activities: Proposed Collection; Comment Request | |
82 FR 49836 - Agency Information Collection Activities; Proposed Collection; Comment Request; Dispute Resolution Procedures for Science-Based Decisions on Products Regulated by the Center for Veterinary Medicine | |
82 FR 49832 - Agency Information Collection Activities; Proposed Collection; Comment Request; Guidance for Industry on Formal Dispute Resolution: Scientific and Technical Issues Related to Pharmaceutical Current Good Manufacturing Practice | |
82 FR 49841 - Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery | |
82 FR 49784 - Submission for OMB Review; Comment Request; Complaint of Employment Discrimination Based on Sexual Orientation Against the Department of Commerce | |
82 FR 49786 - Magnuson-Stevens Act Provisions; General Provisions for Domestic Fisheries; Application for Exempted Fishing Permits | |
82 FR 49801 - Pesticide Product Registration; Receipt of Applications for New Uses | |
82 FR 49840 - Determination That CARDENE SR (Nicardipine HCl) Extended-Release Capsules, 30 Milligrams, 45 Milligrams, and 60 Milligrams, Were Not Withdrawn From Sale for Reasons of Safety or Effectiveness | |
82 FR 49838 - Patient-Focused Drug Development: Guidance 1-Collecting Comprehensive and Representative Input; Public Workshop; Request for Comments | |
82 FR 49837 - Pediatric Gastroesophageal Reflux Disease: Developing Drugs for Treatment; Draft Guidance for Industry; Availability | |
82 FR 49784 - Office of Civil Rights; Submission for OMB Review; Comment Request; Complaint of Employment Discrimination Against the Department of Commerce | |
82 FR 49794 - Submission for OMB Review; Comment Request | |
82 FR 49849 - Cut-to-Length Carbon Steel Plate From India, Indonesia, and Korea; Revised Schedule for the Subject Reviews | |
82 FR 49850 - 100- to 150-Seat Large Civil Aircraft From Canada; Scheduling of the Final Phase of Countervailing Duty and Antidumping Duty Investigations | |
82 FR 49816 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company | |
82 FR 49815 - Formations of, Acquisitions by, and Mergers of Bank Holding Companies | |
82 FR 49859 - Dominion Nuclear Connecticut, Inc.; Millstone Power Station, Unit No. 2, Request for Exemption Regarding the Use of Operator Manual Actions | |
82 FR 49873 - Excepted Service | |
82 FR 49869 - Excepted Service | |
82 FR 49871 - Excepted Service | |
82 FR 49785 - Notice of Availability of a Final Programmatic Environmental Impact Statement for the East Region of the Nationwide Public Safety Broadband Network | |
82 FR 49787 - Pacific Island Fisheries; Western Pacific Stock Assessment Review; Public Meeting | |
82 FR 49876 - New Postal Products | |
82 FR 49802 - Privacy Act of 1974; Publication of Proposed Amendments to Six Existing Systems of Records; Introduction of a New System of Records; Rescindment of Eleven Systems of Records; Request for Comments | |
82 FR 49934 - Notice of Rate To Be Used for Federal Debt Collection, and Discount and Rebate Evaluation | |
82 FR 49796 - Notice of Orders Issued Under Section 3 of the Natural Gas Act During August 2017 | |
82 FR 49846 - Notice of Availability of the Draft Supplemental Environmental Impact Statement and Environmental Impact Report and Draft Land Use Plan Amendment for the Palen Solar Photovoltaic Project, California | |
82 FR 49857 - Meeting of National Council on the Humanities | |
82 FR 49799 - Notice of Public Information Sessions; Grand River Dam Authority | |
82 FR 49799 - Cooperative Energy; Notice of Petition for Partial Waiver | |
82 FR 49800 - Notice of Availability of the Environmental Assessment for the Proposed East-West Project; Florida Gas Transmission, LLC | |
82 FR 49799 - Notice of Availability of Final Environmental Assessment; Hawks Nest Hydro, LLC | |
82 FR 49792 - Arms Sales Notification | |
82 FR 49934 - Notice of Meeting; National Research Advisory Council | |
82 FR 49788 - Procurement List; Proposed Additions and Deletion | |
82 FR 49787 - Procurement List; Deletions | |
82 FR 49771 - Hours of Service of Drivers: Application for Exemption; Motion Picture Association of America | |
82 FR 49770 - Hours of Service of Drivers: Application for Exemption; Western Equipment Dealers Association (WEDA) | |
82 FR 49789 - Arms Sales Notification | |
82 FR 49782 - Bayer CropScience LP; Availability of Petition for Determination of Nonregulated Status of Cotton Genetically Engineered for Resistance to Glyphosate and Isoxaflutole | |
82 FR 49786 - Stainless Steel Flanges From India and the People's Republic of China: Postponement of Preliminary Determinations of Countervailing Duty Investigations | |
82 FR 49751 - Endangered and Threatened Wildlife and Plants; Removing Textual Descriptions of Critical Habitat Boundaries for Plants on the Hawaiian Islands | |
82 FR 49797 - Agency Information Collection Extension | |
82 FR 49789 - Submission for OMB Review; Comment Request | |
82 FR 49788 - Submission for OMB Review; Comment Request | |
82 FR 49852 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Approval of a New Collection | |
82 FR 49854 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Approval of a New Collection | |
82 FR 49851 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Revisions to a Currently Approved Collection | |
82 FR 49853 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Revisions to a Currently Approved Collection | |
82 FR 49854 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Revisions to a Currently Approved Collection | |
82 FR 49843 - Endangered Species Recovery Permit Applications | |
82 FR 49920 - Privacy Act of 1974; Matching Program | |
82 FR 49747 - Touhy Regulations | |
82 FR 49792 - Submission for OMB Review; Comment Request | |
82 FR 49919 - Privacy Act of 1974; Matching Program | |
82 FR 49918 - Privacy Act of 1974, as Amended; Computer Matching Program (SSA/the Department of Labor (DOL)-Match Number 1003) | |
82 FR 49737 - Recreational Boat Flotation Standards-Update of Outboard Engine Weight Test Requirements | |
82 FR 49781 - Submission for OMB Review; Comment Request | |
82 FR 49842 - Towing Safety Advisory Committee; December 2017 Meeting | |
82 FR 49932 - Notice of Proposed Buy America Waiver for Motor Brakes and Machinery Brakes for the SE 3rd Avenue Bascule Bridge Modification in Fort Lauderdale, Florida | |
82 FR 49929 - National Transit Database Reporting Changes and Clarifications | |
82 FR 49886 - Public Company Accounting Oversight Board; Order Granting Approval of Proposed Rules on the Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, and Departures From Unqualified Opinions and Other Reporting Circumstances, and Related Amendments to Auditing Standards | |
82 FR 49899 - Self-Regulatory Organizations; Bats BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Its Amended and Restated Certificate of Incorporation | |
82 FR 49877 - Self-Regulatory Organizations; Bats BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Its Amended and Restated Certificate of Incorporation | |
82 FR 49904 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.10, Order Execution | |
82 FR 49914 - Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 11.152 To Add Provisions Related to Market Maker Withdrawals of Quotations in Securities Listed on the Investors Exchange | |
82 FR 49908 - Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing of a Proposed Rule Change To Amend MSRB Form G-45 To Collect Additional Data About the Transactional Fees Primarily Assessed by Programs Established To Implement the ABLE Act | |
82 FR 49912 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 21.1, Definitions, To Modify Stop Orders and Stop Limit Orders Applicable to the Exchange's Equity Options Platform in Preparation for the C2 Options Exchange, Incorporated Technology Migration | |
82 FR 49905 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 21.1, Definitions, To Modify Stop Orders and Stop Limit Orders Applicable to the Exchange's Equity Options Platform in Preparation for the C2 Options Exchange, Incorporated Technology Migration | |
82 FR 49884 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To List and Trade Shares of The Gold Trust Under NYSE Arca Rule 8.201-E | |
82 FR 49879 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Exchange's Name Change | |
82 FR 49882 - PIMCO Funds, et al. | |
82 FR 49880 - Blackstone/GSO Floating Rate Enhanced Income Fund, et al. | |
82 FR 49900 - Blackstone/GSO Floating Rate Enhanced Income Fund, et al. | |
82 FR 49847 - Certain Radio Frequency Identification (“RFID”) Products and Components Thereof Commission Determination Finding No Violation of Section 337; Termination of the Investigation | |
82 FR 49859 - Advisory Committee on Reactor Safeguards (ACRS); Meeting of the ACRS Subcommittee on Planning and Procedures; Notice of Meeting | |
82 FR 49848 - Silicon Metal From Australia, Brazil, Kazakhstan, and Norway; Scheduling of the Final Phase of Countervailing Duty and Antidumping Duty Investigations | |
82 FR 49858 - Notice of Permit Applications Received Under the Antarctic Conservation Act of 1978 | |
82 FR 49783 - Information Collection Activity; Comment Request | |
82 FR 49842 - National Committee on Vital and Health Statistics: Teleconference | |
82 FR 49815 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company | |
82 FR 49923 - Projects Rescinded for Consumptive Uses of Water | |
82 FR 49922 - Projects Approved for Consumptive Uses of Water | |
82 FR 49764 - Annual Stress Test-Technical and Conforming Changes | |
82 FR 49795 - Agency Information Collection Activities; Comment Request; DC School Choice Incentive Program | |
82 FR 49877 - Civil Monetary Penalty Inflation Adjustment | |
82 FR 49924 - Agency Information Collection Activities; Approval of a New Information Collection Request: Flexible Sleeper Berth Pilot Program | |
82 FR 49923 - Hours of Service of Drivers: Application for Exemption; Pipe Line Contractors Association (PLCA) | |
82 FR 49928 - Qualification of Drivers; Exemption Applications; Diabetes Mellitus | |
82 FR 49926 - Qualification of Drivers; Exemption Applications; Diabetes Mellitus | |
82 FR 49855 - Child Labor, Forced Labor, and Forced or Indentured Child Labor in the Production of Goods in Foreign Countries and Efforts by Certain Foreign Countries To Eliminate the Worst Forms of Child Labor | |
82 FR 49773 - Atlantic Highly Migratory Species; Charter/Headboat Permit Commercial Sale Provision | |
82 FR 49938 - Prohibition of Children's Toys and Child Care Articles Containing Specified Phthalates | |
82 FR 49767 - CPSC Acceptance of Third Party Laboratories: Revision to the Notice of Requirements for Prohibitions of Children's Toys and Child Care Articles Containing Specified Phthalates | |
82 FR 49984 - Simplifications to the Capital Rule Pursuant to the Economic Growth and Regulatory Paperwork Reduction Act of 1996 |
Animal and Plant Health Inspection Service
Rural Utilities Service
First Responder Network Authority
International Trade Administration
National Oceanic and Atmospheric Administration
National Telecommunications and Information Administration
Defense Acquisition Regulations System
Energy Information Administration
Federal Energy Regulatory Commission
Centers for Medicare & Medicaid Services
Food and Drug Administration
Coast Guard
Fish and Wildlife Service
Land Management Bureau
Federal Motor Carrier Safety Administration
Federal Transit Administration
Bureau of the Fiscal Service
Comptroller of the Currency
Fiscal Service
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Coast Guard, DHS.
Final rule.
The Coast Guard finalizes, without change, an interim rule to update the table of outboard engine weights used in calculating safe loading capacities and required amounts of flotation material. The engine weight table was last updated in 1984, and the Coast Guard Authorization Act of 2015 requires that the Coast Guard update the table to reflect a specific standard. Finalizing the interim rule will acknowledge the two public comments received, and contribute to public awareness of and certainty about the June 1, 2018, effective date.
This final rule is effective on June 1, 2018.
Comments and materials received from the public, as well as documents mentioned in this preamble as being available in the docket, are part of docket USCG-2016-1012 and are available using the Federal eRulemaking Portal. You can find this docket on the Internet by going to
For information about this document call or email Mr. Jeffrey Ludwig, Coast Guard; telephone 202-372-1061, email
Section 308 of the Coast Guard Authorization Act of 2015 (Pub. L. 114-120, 130 Stat. 27) (CGAA) requires the Coast Guard to issue regulations, not later than 180 days after enactment, updating Table 4 of subpart H in Title 33 of the Code of Federal Regulations (CFR) part 183 to reflect the American Boat and Yacht Council S-30—Outboard Engines and Related Equipment Weights (ABYC S-30) standard.
Additionally, 46 U.S.C. 4302(b), which provides authority for 33 CFR part 183, requires the effective date for rules issued under that provision be delayed at least 180 days after publication, but not more than 2 years for cases involving major product design, retooling, or changes in the manufacturing process. Section 4302(b) also requires consultation with the National Boating Safety Advisory Council (NBSAC).
On April 5, 2017, the Coast Guard published an interim rule with request for comments (82 FR 16512). We received two public comments on the interim rule. No public meeting was requested, and none was held.
Congress has authorized the Coast Guard to prescribe regulations establishing minimum safety standards for recreational vessels and associated equipment. In 1977, the Coast Guard established flotation requirements for boats less than 20 feet in length, and established a weight table (Table 4 of subpart H in 33 CFR part 183) used to assist the boat manufacturer in determining the amount of flotation to be included in a boat's design and construction.
Table 4 was last updated in 1984, but the size and weight of outboard engines have evolved over the years to the point that Table 4 no longer accurately represents the weights of outboard engines available on the market.
The American Boat and Yacht Council (ABYC) is a non-profit organization that develops voluntary safety standards for the design, construction, maintenance, and repair of recreational boats. Among the voluntary safety standards that ABYC develops and updates on a regular basis is S-30—Outboard Engines and Related Equipment Weights (ABYC S-30). This standard reflects the current state of marine outboard engine weights.
This rulemaking adopts the current ABYC S-30 to replace Table 4 of subpart H in 33 CFR part 183. The current ABYC S-30 is dated July 2012, and was the standard in effect on the date of enactment of the CGAA.
In the CFR, Table 4 applies to monohull outboard boats that are less than 20 feet in length, which includes recreational vessels as well as some commercial fishing vessels. Table 4 is also used indirectly for flotation requirements for survival craft covered by 46 CFR part 25 (uninspected vessels), 46 CFR part 117 (small passenger vessels carrying more than 150 passengers), 46 CFR part 141 (towing vessels) and 46 CFR part 180 (small passenger vessels under 100 gross tons). Changing the figures in Table 4, as required by the CGAA, will require more flotation in each new boat, to support the weight of heavier engines.
The interim rule removed Table 4 and replaced it with a new section (section 183.75) in subpart E of part 183. That section contains the table of the ABYC S-30 standard and its corresponding footnotes. The Coast Guard made minor edits to the footnotes developed by ABYC to accommodate the location of the table in the CFR and to reflect the removal of Table 4. We also made conforming changes to several sections that referenced Table 4.
Finalizing the rule will acknowledge the public comments received, and contribute to public awareness of and certainty about the June 1, 2018, effective date.
The Coast Guard received two public comments in response to the interim rule. One commenter was supportive of the changes made in the interim rule. The other comment stated that in addition to small boat flotation, other factors that contribute to boat safety should be considered. The Coast Guard agrees that other factors can contribute to boat safety. However, they are outside of the scope of this rulemaking, in which we are focused on the requirements of the CGAA and the ABYC S-30 standard. This final rule makes no changes to the interim rule.
We developed this rule after considering numerous statutes and Executive Orders (E.O.s) related to rulemaking. Below we summarize our analyses based on these statutes or E.O.s.
Executive Orders 12866 (“Regulatory Planning and Review”) and 13563 (“Improving Regulation and Regulatory Review”) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”) directs agencies to reduce regulation and control regulatory costs and provides that “for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.”
The Office of Management and Budget (OMB) has not designated this rule a significant regulatory action under section 3(f) of Executive Order 12866. Accordingly, the Office of Management and Budget (OMB) has not reviewed it. As this rule is not a significant regulatory action, this rule is exempt from the requirements of Executive Order 13771. See OMB's Memorandum “Guidance Implementing Executive Order 13771, Titled `Reducing Regulation and Controlling Regulatory Costs'” (April 5, 2017). A regulatory analysis (RA) follows. This RA is unchanged from the RA included in the interim rule (82 FR 16512; April 5, 2017).
This RA provides an evaluation of the economic impacts associated with this final rule. The Coast Guard is issuing a final rule to implement section 308 of the CGAA. The CGAA mandates that the Coast Guard issue regulations to amend Table 4 of subpart H in 33 CFR part 183 to reflect the standards in ABYC S-30. Consequently, 100 percent of the costs of this rule are due to a Congressional mandate and the Coast Guard has no discretion to adopt a different standard that would lower the cost of this rule. Changes in the design and construction of modern outboard engines necessitate a change in the table of outboard engine weights used in calculating safe loading capacities and required amounts of flotation material in the Safe Loading and Flotation Standards found in 33 CFR part 183, subparts G and H.
Table 1 of this document provides a summary of the affected population, costs, and benefits of this rule.
This final rule adopts the current ABYC S-30 to replace Table 4 of subpart H in 33 CFR part 183. Table 4 applies to monohull outboard boats that are less than 20 feet in length, including recreational vessels and some commercial fishing vessels.
Table 4 is also used indirectly for flotation requirements for survival craft covered by 46 CFR part 25 (uninspected vessels), 46 CFR part 117 (small passenger vessels carrying more than 150 passengers), 46 CFR part 141 (towing vessels), and 46 CFR part 180 (small passenger vessels under 100 gross tons). Small passenger vessels are required to carry certain survival craft, depending on their route and construction, in order to have the capacity to evacuate a certain percentage of the number of people on board. These survival craft are generally life rafts or floats, which do not have engines and are not impacted by this final rule. However, small passenger
The final rule affects manufacturers that produce monohull outboard boats that are less than 20 feet in length and that are not currently building boats to ABYC S-30 standard. The Coast Guard used the list of active Manufacturer Identification Code (MIC) holders, as required by 33 CFR 181 subpart C, to determine the affected population. This list represents all recreational boat MICs that are currently active. We then removed any MICs that will not be affected by this rule from the list of manufacturers. This includes: (1) Manufacturers with multiple MICs; (2) MICs belonging to manufacturers that only build boats greater than 20 feet in length; (3) MICs belonging to manufacturers that do not build monohull outboard boats; and (4) MICs belonging to manufacturers that only produce boats exempted from this regulation by 33 CFR 183.201(b), including sailboats, canoes, kayaks, inflatable boats, submersibles, surface effect vessels, amphibious vessels, and raceboats. We found there are no more than 1,519 affected manufacturers that produce monohull outboard boats that are less than 20 feet in length.
Some of these 1,519 monohull manufacturers are currently in compliance with ABYC S-30 standard, and therefore will not incur additional costs because of this rule. The National Marine Manufacturers Association (NMMA) requires its members to build boats to the ABYC standard.
This final rule adopts the current ABYC S-30, to replace Table 4 of subpart H. This change will increase costs to 1,427 monohull manufacturers that are assumed to be not in compliance. The increase in the weight table figures will require an additional 1 to 2 cubic feet of flotation to be added to each boat manufactured after the effective date of June 1, 2018. We estimate the foam for the additional flotation will cost an average of $10 per boat.
To estimate the total cost to industry, we then estimated the total number of outboard boats less than 20 feet in length manufactured per year by the monohull manufacturers that are not in compliance. The Coast Guard used data from the NMMA's 2015 Recreational Boating Statistical Abstract
The total 85,023 outboard boats less than 20 feet that were sold in 2015 were produced by a mix of manufacturers that are already in compliance with the ABYC S-30 standard and manufacturers that are not in compliance and will be impacted by this rule. The NMMA estimates that around 85 percent of the boats sold in the United States are already in compliance with the ABYC S-30 standard. Therefore, the Coast Guard estimates 15 percent of the total outboard boats less than 20 feet sold were produced by manufacturers not in compliance with the ABYC standard. These 12,753 boats (15 percent of the 85,023 outboard boats less than 20 feet, rounded) will require $50 of additional flotation materials to align with the new standard.
To estimate the affected outboard boats over the 10-year period of analysis, we used NMMA data to forecast future boat building production.
As this final rule will be effective June 1, 2018, any outboard boats manufactured after this date will need to be in compliance with ABYC S-30 standard. The Coast Guard anticipates most manufacturers will begin making the necessary changes at the beginning of 2018. All manufacturers will be in compliance by June 1, 2018 of Year 1, which corresponds with the 2018 estimated affected outboard boats in Table 3. We estimate there will be 17,916 affected outboard boats in Year 1 and 19,009 affected outboard boats in Years 2 through 10. Table 4 summarizes the estimated affected population of outboard boats that we used to estimate the 10-year costs of this final rule.
We then multiplied the projected number of affected outboard boats each year in Table 4 by the estimated cost per boat of $50. Table 5 shows the total costs of this final rule on an undiscounted basis, and discounted at 7 and 3 percent.
The total 10-year undiscounted cost of this final rule is $9,449,850. The total 10-year discounted cost of this final rule is $6,624,488 and the annualized cost is $943,178, both discounted at 7 percent. The manufacturers of outboard boats less than 20 feet in length not in compliance with ABYC S-30 standard will bear these costs. However, it is possible that manufacturers may pass these costs onto the recreational boat owners by incorporating the additional costs of this final rule into the sales price. The sale price of the affected boats can range from $3,000 through $50,000. If we use an average of $26,500 per boat, the $50 average cost per boat represents 0.2 percent of the sales price. However, 85 percent of the boats sold in the United States are already in compliance and include this cost of floatation in the sales prices.
This rule does not provide any quantitative benefits. However, it does have qualitative benefits. This rule creates uniformity by aligning all boats to the same standard. The ABYC S-30 provides a higher level of safety than that provided by the standard currently in the regulation. Requiring all boats less than 20 feet in length that currently do not meet ABYC S-30 standard weights to comply with that standard will improve the buoyancy of these boats, and therefore, improve their operational safety.
In accordance with the Regulatory Flexibility Act (5 U.S.C. 601-612), the Coast Guard prepared this Final Regulatory Flexibility Analysis (FRFA) that examines the impacts of the final rule on small entities (5 U.S.C. 601
A small entity may be: A small independent business, defined as independently owned and operated, is organized for profit, and is not dominant in its field per the Small Business Act (5 U.S.C. 632); a small not-for-profit organization (any not-for-profit enterprise which is independently owned and operated and is not dominant in its field); or a small governmental jurisdiction (locality with fewer than 50,000 people) per the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612.
A FRFA addresses the following:
(1) A statement of the need for, and objectives of, the rule;
(2) A statement of the significant issues raised by the public comments in response to the initial regulatory flexibility analysis, a statement of the assessment of the agency of such issues, and a statement of any changes made in the interim final rule as a result of such comments;
(3) The response of the agency to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the interim final rule, and a detailed statement of any change made to the interim final rule in the final rule as a result of the comments;
(4) A description of and an estimate of the number of small entities to which the rule will apply or an explanation of why no such estimate is available;
(5) A description of the projected reporting, recordkeeping and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record; and
(6) A description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.
1. A statement of the need for, and objectives of, the rule.
Section 308 of the CGAA requires the Coast Guard to issue regulations updating Table 4 of subpart H in Title 33 CFR part 183 to reflect the ABYC S-30 standard.
Congress has authorized the Coast Guard to prescribe regulations establishing minimum safety standards for recreational vessels and associated equipment. In 1977, the Coast Guard established flotation requirements for boats less than 20 feet in length, and established a weight table (Table 4 of subpart H in 33 CFR part 183) used to assist the boat manufacturer in determining the amount of flotation to be included in a boat's design and construction.
Table 4 was last updated in 1984, but the size and weight of outboard engines has evolved over the years to the point where Table 4 no longer accurately represents the weights of outboard engines available on the market. Changes in the design and construction of modern outboard engines necessitate a change in the table of outboard engine weights used in calculating safe loading capacities and required amounts of flotation material in the Safe Loading and Flotation Standards found in 33 CFR part 183, subparts G and H.
2. A statement of the significant issues raised by the public comments in response to the initial regulatory flexibility analysis, a statement of the assessment of the agency of such issues, and a statement of any changes made in the interim final rule as a result of the comments.
The Coast Guard did not receive any comments on the initial regulatory flexibility analysis.
3. The response of the agency to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the interim final rule, and a detailed statement of any change made to the interim final rule in the final rule as a result of the comments.
The Coast Guard did not receive any comments from the Small Business Administration's (SBA) Office of Advocacy regarding the impact that the interim final rule would have on small entities.
4. A description of and an estimate of the number of small entities to which the rule will apply or an explanation of why no such estimate is available.
This final rule affects manufacturers that produce monohull outboard boats that are less than 20 feet in length that are not currently building boats to ABYC S-30 standard.
Based on Coast Guard's list of active MIC holders, we estimate this final rule will affect 1,427 U.S. companies. We researched the number of employees and revenue of these companies using proprietary and public business databases.
Using a random sample of companies out of the total population of 1,427 affected U.S. companies, we researched 749 companies and found company-specific revenue and employment information and data on 388 of them.
Our analysis of the available company information revealed 64 primary NAICS codes. Table 7 displays the NAICS codes of the small entities found in our sample.
As discussed in the “Cost to Industry” section of the RA, we estimate that there are 17,916 outboard boats less than 20 feet produced by manufacturers annually that will require additional flotation materials to align with this final rule in Year 1. Coast Guard does not have information on the market share of the small entity manufacturers and the number of boats they produce each year. Therefore, we assume each manufacturer consistently produces the same number of boats each year and that each manufacturer has the same market share. With 1,427 affected U.S. companies, this is an average of about 13 outboard boats per manufacturer (rounded). In Years 2 through 10, the Coast Guard estimates there are 19,009 outboard boats affected, at an average of about 13 outboard boats per manufacturer (19,009 boats divided by 1,427 manufacturers, rounded). At an estimated cost of $50 per outboard boat, the average total cost per manufacturer is $650 in Years 1 through 10. Table 8 summarizes the average costs per manufacturer of the final rule by year.
Next, we compared the average cost per manufacturer to the revenue of the manufacturers in our sample. As shown in Table 6, we found revenue or company data for 385 small entities. We found revenue information for 371 of these small entities, and we were only able to find employee data for 14 entities. Therefore, we could not compare the cost per manufacturer to the revenues for the 14 entities with only employee data. Table 9 summarizes the results. In Years 1 through 10, 94.6 percent of the affected manufacturers will incur a cost of 1
5. A description of the projected reporting, recordkeeping and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record.
This rule calls for no new collection of information under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520.
6. A description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.
This final rule implements section 308 of CGAA. The CGAA mandates the update of Table 4 in 33 CFR part 183. As such, the Coast Guard has no discretion to offer alternatives that minimize the impact on small entities while accomplishing the stated objective of the statute. To ease implementation of this requirement, the Coast Guard is delaying the effective date until June 1, 2018, so that the new requirements will apply only to boat manufacturers who build boats after that date.
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121, we offered to assist small entities in understanding this rule so that they could better evaluate its effects on them and participate in the rulemaking. The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).
This rule calls for no new collection of information under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520.
A rule has implications for federalism under Executive Order 13132 (“Federalism”), if it has 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. We have analyzed this rule under E.O. 13132 and have determined that it is consistent with the fundamental federalism principles and requirements described in Executive Order 13132. Our analysis is explained below.
Congress directed the Coast Guard to “establish minimum safety standards for recreational vessels” (46 U.S.C. 4302). This rulemaking revises regulations issued pursuant to that statute and Congress has expressly limited States from regulating in this field, as specified in 46 U.S.C. 4306. Under 46 U.S.C. 4306, “a State or political subdivision of a State may not establish, continue in effect, or enforce a law or regulation establishing a recreational vessel or associated or equipment performance or other safety standard . . . that is not identical to a regulation prescribed under” 46 U.S.C. 4302. As a result, States or local governments are expressly prohibited from regulating within this category unless the regulation is identical to regulation prescribed under 46 U.S.C. 4302 or an exemption is granted under 46 U.S.C. 4305. Therefore, the rule is consistent with the principles of federalism and preemption requirements in Executive Order 13132.
The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538, requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will not cause a taking of private property or otherwise have taking implications under E.O. 12630 (“Governmental Actions and Interference with Constitutionally Protected Property Rights”).
This rule meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, (“Civil Justice Reform”), to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under E.O. 13045 (“Protection of Children from Environmental Health Risks and Safety Risks”). This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.
This rule does not have tribal implications under E.O. 13175 (“Consultation and Coordination with Indian Tribal Governments”), because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
We have analyzed this rule under E.O. 13211 (“Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use”). We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under E.O. 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy.
The National Technology Transfer and Advancement Act, codified as a note to 15 U.S.C. 272, directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through OMB, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (
This rule uses a voluntary consensus standard: The current ABYC S-30.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have concluded that this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This final rule is categorically excluded under section 2.B.2, figure 2-1, paragraphs (34)(d) and (e) of the Instruction and under section 6(a) of the “Appendix to National Environmental Policy Act: Coast Guard Procedures for Categorical Exclusions, Notice of Final Agency Policy” (67 FR 48243, July 23, 2002). This final rule involves the safe loading capacity and required amount of flotation material for certain recreational boats, which concerns equipping of vessels, as well as equipment and vessel operation safety standards. This rule supports the Coast Guard's maritime safety mission. A Record of Environmental Consideration (REC) supporting this determination is available in the docket as discussed in the
Marine safety.
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes an exemption from the requirement of a tolerance for residues of
This regulation is effective October 27, 2017. Objections and requests for hearings must be received on or before December 26, 2017, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2016-0348, is available at
Robert McNally, Biopesticides and Pollution Prevention Division (7511P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at
Under FFDCA section 408(g), 21 U.S.C. 346a(g), any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2016-0348 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before December 26, 2017. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2016-0348, by one of the following methods:
•
•
•
In the
Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Pursuant to FFDCA section 408(c)(2)(B), in establishing or maintaining in effect an exemption from the requirement of a tolerance, EPA must take into account the factors set forth in FFDCA section 408(b)(2)(C), which require EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance or tolerance exemption and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue . . . .” Additionally, FFDCA section 408(b)(2)(D) requires that EPA consider “available information concerning the cumulative effects of [a particular pesticide's] . . . residues and other substances that have a common mechanism of toxicity.”
EPA evaluated the available toxicological and exposure data on
Based upon its evaluation, EPA concludes that
Based upon its evaluation, EPA concludes that there is a reasonable certainty that no harm will result to the U.S. population, including infants and children, from aggregate exposure to residues of
Due to the lack of toxicity, infectivity, or pathogenicity of
This action establishes a tolerance exemption under FFDCA section 408(d) in response to a petition submitted to EPA. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), or Executive Order 13045, entitled “Protection of
Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance exemption in this action, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes. As a result, this action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, EPA has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, EPA has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require EPA's consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, 40 CFR chapter I is amended as follows:
21 U.S.C. 321(q), 346a and 371.
An exemption from the requirement of a tolerance is established for residues of
Committee for Purchase From People Who Are Blind or Severely Disabled.
Final rule.
The Committee for Purchase From People Who Are Blind or Severely Disabled (Committee) has revised procedures to respond to subpoenas or other official demands for information and testimony served upon itself or its employees.
This rule is effective November 27, 2017
Timi Kenealy, (703) 603-2100, Email:
The Committee, operating as the U.S. AbilityOne Commission, administers the AbilityOne Program pursuant to the authority of 41 U.S.C. 8501. Through this program, employment opportunities are provided to people who are blind or severely disabled through the provisions of products and services to the Federal Government.
Pursuant to 5 U.S.C. 301, the head of an Executive department or military department may prescribe regulations for the government of his department, the conduct of its employees, the distribution and performance of its business, and the custody, use, and preservation of its records, papers, and property. The part does not authorize withholding information from the public or limiting the availability of records to the public.
The United States Supreme Court held in
This regulation governs the Committee's procedures for authorizing or denying such demands. In addition to the updates for the Touhy case, the Committee made technical corrections to include changes to the mailing address and changed “JWOD” to “AbilityOne” the operating name of the agency since 2010. Changes to this section of the CFR were last made in 1994. On July 18, 2017, the Committee published a proposed rule outlining these changes on
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distribute impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule benefits the public and the United States Government by providing clear procedures for members of the public and Government employees to follow when official
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532) requires agencies to assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2016, that threshold is approximately $146 million. This rule will not mandate any requirements for State, local, or tribal governments, nor will it affect private sector costs.
The Committee certifies this proposed rule is not subject to the Regulatory Flexibility Act (5 U.S.C. Ch. 6) because it would not, if promulgated, have a significant economic impact on a substantial number of small entities. This rule will provide clarity to U.S. Government personnel and outside counsel on the proper rules and procedures to serve process on U.S. Government officials in their official capacity and to obtain official U.S. Government testimony or documents for use in legal proceedings. Therefore, the Regulatory Flexibility Act, as amended, does not require the Committee to prepare a regulatory flexibility analysis.
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. This rule will not have a substantial effect on the States; the relationship between the National Government and the States; or the distribution of power and responsibilities among the various levels of Government.
It has been determined that this rule does not impose reporting or record keeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).
Administrative practices and procedures, Courts, Disclosure, Exemptions, Government employees, Subpoenas, Records, Testimony.
41 U.S.C. 8503(d); 41 CFR Ch. 51.
(a) This part sets forth policies and procedures of the Committee for Purchase From People Who Are Blind or Severely Disabled (Committee) regarding the testimony of current and former employees as witnesses and the production or disclosure of Committee documents or information:
(1) In all Federal and State proceedings in which the United States is a party; and
(2) In all Federal and State proceedings in which the United States is not a party, when a demand pursuant to a subpoena, order or request (collectively referred to in this part as a “demand”) of a court or other authority is issued for such material, testimony, or information.
(b) The Committee intends these provisions to:
(1) Promote economy and efficiency in its programs and operations;
(2) Minimize the possibility of involving the Committee in controversial issues not related to its functions;
(3) Prevent the misuse of the Committee's employees as involuntary expert witnesses for private interests or as inappropriate expert witnesses as to the state of the law;
(4) Maintain the Committee's impartiality among private litigants where neither the Committee nor any other Federal entity is a named party; and
(5) Protect sensitive, confidential information and the deliberative processes of the Committee.
(c) In providing for these requirements, the Committee does not waive the sovereign immunity of the United States.
(d) This part provides guidance for the internal operations of the Committee. The procedures specified in this part, or the failure of any Committee employee to follow the procedures specified in this part, are not intended to, do not, and may not be relied upon to create a right or benefit, substantive or procedural, enforceable at law by a party against the United States.
This part applies to demands and requests to employees of the Committee in legal proceedings, for factual or expert testimony relating to official information or for production of official records or information. However, it does not apply to:
(a) Demands for a current Committee employee to testify as to facts or events that are unrelated to his or her official duties or that are unrelated to the functions of the Committee;
(b) Demands for a former Committee employee to testify as to matters in which the former employee was not directly or materially involved while at the Committee;
(c) Requests for the release of non-exempt records under the Freedom of Information Act, 5 U.S.C. 552 (41 CFR part 51-8), or the Privacy Act, 5 U.S.C. 552(a) (41 CFR part 51-9); and
(d) Congressional or Government Accountability Office (GAO) demands and requests for testimony or records.
As used in this part:
(1) Any current or former officer or employee of the Committee;
(2) Any other individual hired through contractual agreement by or on behalf of the Committee or who has performed or is performing services under such an agreement for the Committee; and
(3) Any individual who served or is serving in any consulting or advisory
(4) Provided, that this definition does not include persons who are no longer employed by the Committee and who are retained or hired as expert witnesses or who agree to testify about general matters available to the public, or matters with which they had no specific involvement or responsibility during their employment with the Committee.
(a) In any Federal or State case or matter in which the United States is not a party, no employee or former employee of the Committee shall, in response to a demand, produce any record contained in the files of the Committee, or disclose any information relating to or based upon record contained in the files of the Department, or disclose any information or produce any record acquired as part of the performance of that person's official duties or because of that person's official status without prior written approval of the General Counsel in accordance with § 51-11.9.
(1) Whenever a demand is made upon an employee or former employee as described in this paragraph (a), the employee shall immediately notify the General Counsel. The General Counsel shall follow procedures set forth in § 51-11.8.
(2) If oral testimony is sought by a demand in any case or matter in which the United States is not a party, an affidavit, or, if that is not feasible, a statement by the party seeking the testimony or by his attorney, setting forth a summary of the testimony sought and its relevance to the proceeding, must be furnished to the General Counsel. Any authorization for testimony by a present or former employee of the Committee shall be limited to the scope of the demand as summarized in such statement.
(3) When information other than oral testimony is sought by a demand, the General Counsel shall request a summary of the information sought and its relevance to the proceeding.
(b) In any Federal or State case or matter in which the United States is a party, the General Counsel is authorized to reveal and furnish to any person, including an actual or prospective witness, a grand jury, counsel, or a court, either during or preparatory to a proceeding, such testimony, and relevant unclassified material, documents, or information secured by the employee or former employee of the Committee, as the General Counsel shall deem necessary or desirable to the discharge of the attorney's official duties:
(1) If oral testimony is sought by a demand in a case or matter in which the United States is a party, an affidavit, or, if that is not feasible, a statement by the party seeking the testimony or by the party's attorney setting forth a summary of the testimony sought must be furnished to the agency attorney handling the case or matter.
(2) [Reserved]
(c) In appropriate cases, the General Counsel shall notify the United States Department of Justice (DOJ) of the demand and coordinate with the DOJ to file any appropriate motions or other pleadings.
(a) Written demands directed to the Committee or requests for official records, information or testimony shall be served in accordance with the requirements of the Federal Rules of Civil or Criminal Procedure, or applicable State procedures, as appropriate. If the demand is served by U.S. mail, it should be addressed to the General Counsel, Committee for Purchase From People Who Are Blind or Severely Disabled, 1401 S. Clark Street, Suite 715, Arlington, VA 22202. The Committee's acceptance of service of a demand shall not constitute an admission or waiver of any objection with respect to the propriety of jurisdiction, service of process, venue or any other defense in law or equity available under applicable law.
(b) If any doubt exists, whether a demand relates to purely personal matters or arises out of the performance of official duties, copies of the demand may be delivered to the General Counsel for such determination.
Compliance with the following requirements is required when issuing demands or requests for official records, information or testimony.
(a) Requests must be in writing and must be submitted to the General Counsel. If a subpoena is served on the Committee or a Committee employee before submitting a written request and receiving a final determination, the Committee will object to the subpoena on grounds that it was not submitted in accordance with this part.
(b) Written requests must contain the following information:
(1) The caption of the legal proceeding, docket number, and name and address of the court or other authority involved;
(2) A copy of the complaint or equivalent document setting forth the assertions in the case and any other pleading or document necessary to show the relevance of the information sought;
(3) A detailed description of how the information sought is relevant to the issues in the legal proceeding, and a specific description of the substance of the testimony or records sought;
(4) A statement as to how the need for the information outweighs the need to maintain any confidentiality of the information and outweighs the burden on the Committee to produce the records or provide testimony;
(5) A statement indicating that the information sought is not available from another source, from other persons or entities, or from the testimony of someone other than a Committee employee, such as a retained expert;
(6) If testimony is requested, the intended use of the testimony, a general summary of the desired testimony, and a showing that no document could be provided and used in lieu of testimony;
(7) A description of all prior decisions, orders, or pending motions in the case that bear upon the relevance of the requested records or testimony;
(8) The name, address, and telephone number of counsel to each party in the case; and
(9) An estimate of the amount of time that the requester and other parties will require with each Committee employee for time spent by the employee to prepare for testimony, in travel, and for attendance at the legal proceeding.
(c) The Committee reserves the right to require additional information to complete any request where appropriate.
(d) Requests should be submitted at least 45 calendar days before the date that records or testimony is required. Requests submitted in less than 45 calendar days before records or testimony is required must be accompanied by a written explanation stating the reasons for the late request and the reasons for expedited processing.
(e) Failure to cooperate in good faith to enable the General Counsel to make an informed decision may serve as the basis for a determination not to comply with the request.
The General Counsel in his or her sole discretion, may grant an employee permission to testify on matters relating to official information, or produce official records and information, in response to an appropriate demand or request. Among the relevant factors that the General Counsel may consider in making this decision are whether:
(a) The purposes of this part are met;
(b) Allowing such testimony or production of records would be necessary to prevent a miscarriage of justice;
(c) The Committee has an interest in the decision that may be rendered in the legal proceeding;
(d) Allowing such testimony or production of records would assist or hinder the Committee in performing its statutory duties or use the Committee resources in a way that will interfere with the ability of the Committee employees to do their regular work;
(e) Allowing such testimony or production of records would be in the best interest of the Committee or the United States;
(f) The records or testimony can be obtained from other sources;
(g) The demand or request is unduly burdensome or otherwise inappropriate under the applicable rules of discovery or the rules of procedure governing the case or matter in which the demand or request arose;
(h) Disclosure would violate a statute, Executive order or regulation;
(i) Disclosure would reveal confidential, sensitive, or privileged information, trade secrets or similar, confidential commercial or financial information, otherwise protected information, or would otherwise be inappropriate for release;
(j) Disclosure would impede or interfere with an ongoing law enforcement investigation or proceedings, or compromise constitutional rights;
(k) Disclosure would result in the Committee appearing to favor one private litigant over another private litigant;
(l) Disclosure relates to documents that originate from another agency;
(m) A substantial Government interest is implicated;
(n) The demand or request is within the authority of the party making it;
(o) The demand improperly seeks to compel a Committee employee to serve as an expert witness for a private interest;
(p) The demand improperly seeks to compel a Committee employee to testify as to a matter of law; and/or
(q) The demand or request is sufficiently specific to be answered.
(a) After service of a demand or request, the General Counsel will review the demand or request and, in accordance with the provisions of this part, determine whether, or under what conditions, to authorize an employee to testify on matters relating to Committee records and/or produce records.
(b) The Committee will process requests in the order in which they are received. Absent exigent or unusual circumstances, the Committee will respond within 45 calendar days from the date of receipt. The time for response will depend upon the scope of the request.
(c) The General Counsel may grant a waiver of any procedure described by this part where a waiver is considered necessary to promote a significant interest of the Committee or the United States or for other good cause.
The General Counsel makes the final determination on demands and requests for production of official records and information or testimony. All final determinations are within the sole discretion of the General Counsel. The General Counsel will notify the requester and the court or other authority of the final determination, the reasons for the grant or denial of the demand or request, and any conditions that the General Counsel may impose on the release of records or information, or on the testimony of a Committee employee.
(a) Conditions or restrictions may be imposed on the testimony of the Committee employees including, for example, limiting the areas of testimony or requiring the requester and other parties to the legal proceeding to agree that they will seek to file the transcript of the testimony under seal and that it will be used or made available only in the particular legal proceeding for which testimony was requested. The General Counsel may also require a copy of the transcript or testimony be provided to the Committee at the requester's expense.
(b) The Committee may offer the employee's written declaration in lieu of testimony.
(c) If authorized to testify pursuant to this part, an employee may testify as to facts within his or her personal knowledge, but, unless specifically authorized to do so by the General Counsel, the employee shall not:
(1) Disclose confidential or privileged information;
(2) Testify as to any information outside the scope of the General Counsel's authorization (
(3) For a current Committee employee, testify as an expert or opinion witness with regard to any matter arising out of the employee's official duties or the functions of the Committee unless testimony is being given on behalf of the United States whether or not the United States is a party.
(a) The General Counsel may impose conditions or restrictions on the release of official records and information, including the requirement that parties to the proceeding obtain a protective order or execute a confidentiality agreement to limit access and any further disclosure. The terms of the protective order or of a confidentiality agreement must be acceptable to the General Counsel. In cases where protective orders or confidentiality agreements
(b) If the General Counsel so determines, original Committee records may be presented for examination in response to a demand or request, but they are not to be presented as evidence or otherwise used in a manner by which they could lose their identity as official Committee records, and they are not to be marked or altered. In lieu of the original records, certified copies will be presented for evidentiary purposes.
If a response to a demand or request is required before the General Counsel can make the determination previously referred to, the General Counsel when necessary, will provide the court or other competent authority with a copy of this part, inform the court or other competent authority that the demand or request is being reviewed, and seek a stay of the demand or request pending a final determination.
If the court or other competent authority fails to stay the demand, the employee upon whom the demand or request is made, unless otherwise advised by the General Counsel, will appear at the stated time and place, produce a copy of this part, state that the employee has not been authorized to provide the requested testimony or produce documents, and respectfully decline to comply with the demand, citing
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(a) An employee who discloses official records or information or gives testimony relating to official information, except as expressly authorized by the Committee, or as ordered by a Federal court after the Committee has had the opportunity to be heard, may face the penalties provided in 18 U.S.C. 641 and other applicable laws. Additionally, former Committee employees are subject to the restrictions and penalties of 18 U.S.C. 207 and 216.
(b) A current Committee employee who testifies or produces official records and information in violation of this part may be subject to disciplinary action.
Fish and Wildlife Service, Interior.
Final rule.
We, the U.S. Fish and Wildlife Service (Service), are removing the textual descriptions of critical habitat boundaries from those designations for plants on the Hawaiian Islands of Kauai, Niihau, and Hawaii for which the maps have been determined to be sufficient to stand as the official delineation of critical habitat. For these entries, the boundaries of critical habitat as mapped or otherwise described will be the official delineation of the designation. The coordinates and/or plot points that we are removing from the Code of Federal Regulations will be available to the public at the lead field office of the Service responsible for the designation and online at the Federal eRulemaking Portal. This action does not increase, decrease, or otherwise change the boundaries of any critical habitat designation. We are taking this action in accordance with our May 1, 2012, revision of the regulations related to publishing textual descriptions of critical habitat boundaries in the Code of Federal Regulations and as part of our response to Executive Order 13563 (January 18, 2011) directing Federal agencies to review their existing regulations and then to modify or streamline them in accordance with what they learned.
This rule is effective November 27, 2017.
This final rule is available online at the Federal eRulemaking Portal at
Carey Galst, U.S. Fish and Wildlife
On May 1, 2012, we published a final rule (77 FR 25611) revising our regulations related to publishing textual descriptions of proposed and final critical habitat boundaries in the
Specifically, for critical habitat rules published after May 31, 2012, the map(s), as clarified or refined by any textual language within the rule, constitutes the definition of the boundaries of a critical habitat. Each critical habitat area is shown on a map, with more-detailed information discussed in the preamble of the rulemaking documents published in the
The preamble to the May 1, 2012, final rule (77 FR 25611) also explained how the Service would handle boundaries for critical habitat that had already been designated before May 31, 2012; the rule states that “for existing critical habitat designations, we also intend to remove the textual descriptions of final critical habitat boundaries set forth in the CFR in order to save the annual reprinting cost, but we must do so in separate rulemakings to ensure that removing the textual descriptions does not change the existing boundaries of those designations” (77 FR 25618). We have now begun applying this approach to critical habitat designations promulgated prior to May 31, 2012. This rule is the first in a series of rules based on our evaluation of the map(s) in each critical habitat designation at 50 CFR 17.95, 17.96, and 17.99 to determine whether or not the map(s) will be sufficient to inform the public of the boundaries of the designations and can therefore stand as the official delineation of the designation.
In this rule, we are removing the textual descriptions of critical habitat boundaries from those entries at 50 CFR 17.99 (plants on the Hawaiian Islands) where we have determined that the maps are sufficient to stand as the official delineation of the designation. Unlike 50 CFR 17.95, which is organized by wildlife group (
For the maps at 50 CFR 17.99, we look for a combination of certain map elements, including, but not limited to, the unit name, a clear map key, and an appropriate map scale, to determine whether or not a map is sufficient to serve as the official delineation of the designation. We do not require that there be a State or County name on the map because each Hawaiian island has its own paragraph within 50 CFR 17.99: Critical habitat designations for Kauai are set forth at § 17.99(a)(1); for Niihau, at § 17.99(a)(2); for Molokai, at § 17.99(c); for Maui, at § 17.99(e)(1); for Kahoolawe, at § 17.99(e)(2); for the northwestern Hawaiian islands (Nihoa, Necker, and Laysan), at § 17.99(g); for Oahu, at § 17.99(i); and for Hawaii (the big island), at § 17.99(k). In addition, given that the designations at 50 CFR 17.99 are ecosystem-based, we do not require that there be a full listing of the species names on each map, because an ecosystem may have many species designated within it. In most entries, the text preceding the map gives a full listing of species within the designated critical habitat unit, and each island (or island group) also has a Table of Protected Species that lists the species occupied and unoccupied in each unit. Other entries, such as those for the islands of Kauai and Niihau, include the species name as part of the unit name. Our evaluation of the maps at 50 CFR 17.99 found that nearly every map meets our sufficiency criteria; the only maps that do not meet our criteria are those that we need to correct. Specifically, at 50 CFR 17.99(k), Maps 97, 100, 101, and 102 are either a duplicate of another unit map or labeled with the incorrect species name. We plan to make these map corrections in a future rulemaking, and in this rule we retain the textual descriptions of those units with maps that need correction. The only textual descriptions we are removing in this rule are those set forth for the islands of Kauai, Niihau, and Hawaii at 50 CFR 17.99(a)(1), (a)(2), and (k), respectively. All of the critical habitat designations for plants on the other Hawaiian Islands have been recently updated and/or do not include detailed textual descriptions.
This rule does not increase, decrease, or in any other way change the critical habitat designations from which we are removing the textual descriptions of boundaries. This administrative action will save taxpayer resources. The Service spent $75,225 to reprint the critical habitat designations at 50 CFR 17.99 for the most-recent print edition of the CFR. Based on a review of the print edition of the CFR, we estimate that this rule will remove approximately 132 pages of the relevant CFR volumes, amounting to a savings of approximately $11,220 per year in printing costs for the Service. Over many years, eliminating the need to reprint Universal Transverse Mercator (UTM) coordinate pairs at 50 CFR 17.99 will result in a considerable cumulative cost savings for the Service and the public as a whole.
We will publish a series of rules, of which this is the first, to remove the textual descriptions from all of the critical habitat designations at 50 CFR 17.95, 17.96, and 17.99 that have map(s) sufficient to stand as the official delineation of the designation.
The detailed UTM coordinates or other textual descriptions we are removing in this rule will continue to be available online at the Federal eRulemaking Portal (see
We note that the Service never maintained that requiring detailed textual descriptions was legally necessary. Instead, the first critical habitat regulations required only that critical habitat designations be “accompanied by maps and/or geographical descriptions” (43 FR 870, 876; January 4, 1978). Although the Service subsequently added the requirement that critical habitat designations include textual descriptions describing the specific boundary limits of the critical habitat, there is nothing in the preamble to that rule indicating that the Service did so because the Act required it. Rather, it was in response to several commenters, who had opined that the proposed rule was not sufficiently clear in setting out the method by which critical habitat boundaries would be described (45 FR 13009, 13015; February 27, 1980).
Removing these unnecessary textual descriptions will significantly reduce the length of some critical habitat designations, making each designation easier to locate in the CFR; will not weaken the effectiveness of the Act; and will not undermine the public's ability to identify the boundaries of critical habitat designations.
The information printed in the CFR is the legally binding delineation of critical habitat. If there is ambiguity due to the scale of the map such that additional regulatory text is needed to ensure that the public has adequate notice of the boundaries, we provide additional regulation text. The only change to the CFR that we are making with this action is removing the detailed coordinate data of the boundaries of the specific areas designated as critical habitat (
As stated earlier, the actions we are taking in this rule do not increase, decrease, or otherwise change the critical habitat boundaries or areas. For 50 CFR 17.99(a)(1), (a)(2), and (k), we are merely removing the reference points (
The actions we are taking in this rule require that we also revise 50 CFR 17.94(b) to make clear which critical habitat designations have maps that stand as the official delineation of critical habitat and which do not. Our revisions to 50 CFR 17.94 also correct the inadvertent omission of a reference to critical habitat areas designated at “§ 17.99 (plants on the Hawaiian Islands)” from paragraph (a) and remove paragraphs (c) and (d). We are removing paragraph (c) because not all of our critical habitat designations include information in the CFR on the biological or physical constituent elements that are known to require special management considerations or protection in a designated area. Such information can still be found in the
We are publishing this final rule without a prior proposal because we find that there is good cause for doing so pursuant to 5 U.S.C. 553(b)(3)(B). The “good cause” exception applies when an agency finds “that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” Publication of a proposed rule for this action is unnecessary because this is an administrative action that does not increase, decrease, or otherwise change critical habitat boundaries or areas. Therefore, this action will not affect any legal rights. Rather, it will merely reduce the publication length of some rules designating critical habitat, which will save taxpayer resources and make each designation easier to locate in the CFR. We find that it is in the best interest of the public to promulgate these administrative and technical changes to 50 CFR 17.99 and without undergoing procedures that are unnecessary.
Executive Order (E.O.) 12866 provides that the Office of Information and Regulatory Affairs (OIRA) will review all significant rules. OIRA has determined that this rule is not significant.
Executive Order 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements.
This rule is not an E.O. 13771 (“Reducing Regulation and Controlling Regulatory Costs”) (82 FR 9339, February 3, 2017) regulatory action because this rule is not significant under E.O. 12866.
Under the Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601
According to the Small Business Administration, small entities include small organizations such as independent nonprofit organizations; small governmental jurisdictions, including school boards and city and town governments that serve fewer than 50,000 residents; and small businesses (13 CFR 121.201). Small businesses include such businesses as manufacturing and mining concerns with fewer than 500 employees, wholesale trade entities with fewer than 100 employees, and retail and service businesses with less than $5 million in annual sales. In general, the term “significant economic impact” is meant to apply to a typical small business firm's business operations.
This rule will not have a significant economic effect on a substantial number of small entities as defined under the RFA. This rule is an administrative action to remove the textual descriptions from critical habitat designations that have a map(s) sufficient to stand as the official delineation of critical habitat at 50 CFR 17.99(a)(1), (a)(2), and (k). This action does not increase, decrease, or in any other way alter the areas or boundaries of the critical habitat designations from which we are removing the textual descriptions of boundaries.
This administrative action will save taxpayer resources. The Service spent $75,225 to reprint the critical habitat designations at 50 CFR 17.99 for the most-recent print edition of the CFR. Based on a review of the print edition of the CFR, we estimate that this rule will remove approximately 132 pages of the relevant CFR volumes, amounting to a savings of approximately $11,220 per year in printing costs paid by the Service. While over many years, eliminating the need to reprint Universal Transverse Mercator (UTM) coordinate pairs at 50 CFR 17.99 will result in a considerable cumulative cost savings to the Service and the public as a whole, this rule will result in only a small annual savings to the Service and the public.
Therefore, for the reasons above, we certify that this rule will not have a significant economic impact on a substantial number of small entities.
In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501
a. This rule will not produce a Federal mandate. In general, a Federal mandate is a provision in legislation, statute, or regulation that would impose an enforceable duty upon State, local, or tribal governments, or the private sector, and includes both “Federal intergovernmental mandates” and “Federal private sector mandates.” These terms are defined in 2 U.S.C. 658(5)-(7). “Federal intergovernmental mandate” includes a regulation that “would impose an enforceable duty upon State, local, or tribal governments” with two exceptions: (1) “a condition of Federal assistance” or (2) “a duty arising from participation in a voluntary Federal program,” unless the regulation “relates to a then-existing Federal program under which $500,000,000 or more is provided annually to State, local, and tribal governments under entitlement authority”; the provision would either “increase the stringency of conditions of assistance” or “place caps upon, or otherwise decrease, the Federal Government's responsibility to provide funding”; and the State, local, or tribal governments “lack authority . . . to amend their financial or programmatic responsibilities to continue providing required services.” At the time of enactment, these entitlement programs were: Medicaid; AFDC work programs; Child Nutrition; Food Stamps; Social Services Block Grants; Vocational Rehabilitation State Grants; Foster Care, Adoption Assistance, and Independent Living; Family Support Welfare Services; and Child Support Enforcement. “Federal private sector mandate” includes a regulation that “would impose an enforceable duty upon the private sector, except (i) a condition of Federal assistance or (ii) a duty arising from participation in a voluntary Federal program.” This rule does not produce a Federal mandate under either of these definitions.
b. This rule will not significantly or uniquely affect small governments because the revisions to the regulations in this rule should make our critical habitat designations more reader-friendly and will make the process more cost-effective for the Service and the public as a whole. As such, we do not believe that a Small Government Agency Plan is required.
In accordance with Executive Order 12630 (“Government Actions and Interference with Constitutionally Protected Private Property Rights”), we have evaluated this rule, and we have determined that this rule does not pose significant takings implications. The revisions to the regulations set forth in this rule do not involve individual property rights.
In accordance with Executive Order 13132 (Federalism), the rule does not have significant Federalism effects. A federalism summary impact statement is not required. The revisions to the regulations addressed in this rule are intended to promote the usability of the regulations and make the process of designating critical habitat more cost-effective, and thus should not significantly affect or burden the authority of the States to govern themselves.
In accordance with Executive Order 12988 (Civil Justice Reform), this rule follows the Civil Justice Reform principles for regulations that do not unduly burden the Federal judicial system, by meeting the requirements of sections 3(a) and 3(b) of the Executive Order. The revisions to the regulations addressed in this rule should not significantly affect or burden the judicial system.
This rule does not contain any new collections of information that require approval by OMB under the Paperwork Reduction Act (44 U.S.C. 3501
We analyzed this rule in accordance with the criteria of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321
A categorical exclusion from NEPA documentation applies to policies, directives, regulations, and guidelines that are “of an administrative, financial, legal, technical, or procedural nature”
We have reviewed each of the 12 exceptions and have found that because this rule is administrative in nature, none of the exceptions apply. Therefore, this action meets the requirements for a categorical exclusion from the NEPA process.
In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), Executive Order 13175 “Consultation and Coordination with Indian Tribal Governments,” and the Department of the Interior Manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Native American Tribes on a government-to-government basis. We have evaluated the potential effects on federally recognized Tribes from these revisions to our regulations. We have determined that there are no potential effects to federally recognized Tribes, because the revisions to the regulations are intended to promote the usability of critical habitat designations and save taxpayer monies. However, we will continue to coordinate with Tribes as we promulgate critical habitat designations.
Executive Order 13211 (Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use) requires agencies to prepare Statements of Energy Effects when undertaking certain actions. “Significant energy action” means any action by an agency (normally published in the
Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.
Accordingly, we amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as follows:
16 U.S.C. 1361-1407; 1531-1544; 4201-4245, unless otherwise noted.
(a) The areas listed in § 17.95 (fish and wildlife), § 17.96 (plants), and § 17.99 (plants on the Hawaiian Islands) and referred to in the lists at §§ 17.11 and 17.12 have been determined by the Director to be critical habitat. All Federal agencies must insure that any action authorized, funded, or carried out by them is not likely to result in the destruction or adverse modification of the constituent elements essential to the conservation of the listed species within these defined critical habitats. (See part 402 for rules concerning this prohibition; see also part 424 for rules concerning the determination of critical habitat).
(b)
Office of the Comptroller of the Currency, Treasury.
Proposed rule.
The Office of the Comptroller of the Currency (OCC) is inviting comment on a proposed rule that would make several revisions to its stress testing rule. The proposed rule would change the range of possible “as-of” dates used in the global market shock component to conform to changes recently made by the Board of Governors of the Federal Reserve System (Board) to its stress testing regulations. The proposed rule would also change the transition process for covered institutions with $50 billion or more in assets. Under the proposed rule, a covered institution that becomes an over $50 billion covered institution, as that term is defined in the OCC stress testing regulation, before September 30 would become subject to the requirements applicable to an over $50 billion covered institution beginning on January 1 of the second calendar year after the covered institution becomes an over $50 billion covered institution, and a covered institution that becomes an over $50 billion covered institution after September 30 would become subject to the requirements applicable to an over $50 billion covered institution beginning on January 1 of the third calendar year after the covered institution becomes an over $50 billion covered institution. The proposed rule would also make certain technical changes to clarify the requirements of the OCC's stress testing regulation.
Comments must be received on or before December 26, 2017.
You may submit comments to the OCC by any of the methods set forth below. Because paper mail in the Washington, DC area and at the OCC is subject to delay, commenters are encouraged to submit comments through the Federal eRulemaking Portal or email, if possible. Please use the title “Annual Stress Test—Technical and Conforming Changes” to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods:
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• Click on the “Help” tab on the
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You may review comments and other related materials that pertain to this rulemaking action by any of the following methods:
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• Click on the “Help” tab on the
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Hein Bogaard, Lead Economic Expert, International Analysis and Banking Condition, (202) 649-5450; Andrew Tschirhart, Financial Analyst, Large Bank Supervision, (202) 649-6210; Kari Falkenborg, Senior Financial Analyst, Midsize and Community Bank Supervision, (312) 917-5000; Henry Barkhausen, Counsel, or Ron Shimabukuro, Senior Counsel, Legislative and Regulatory Activities Division, (202) 649-5490; for persons who are deaf or hearing impaired, TTY, (202) 649-5597.
Section 165(i) of the Dodd-Frank Wall Street Reform and Consumer Protection Act
The Dodd-Frank Act requires that the OCC and other federal primary financial regulatory agencies issue consistent and comparable regulations to implement the statutory stress testing requirement. In order to fulfill this requirement and minimize regulatory burden, the OCC has worked to ensure that its stress testing regulation remains consistent and comparable to the regulations enacted by other regulatory agencies, including the Board.
Under 12 CFR 46.5(c) the OCC may require a covered institution with significant trading activities to include trading and counterparty components in its adverse and severely adverse scenarios. The trading and counterparty position data to be used in this component is as of a date between January 1 and March 1 of a calendar year. On February 3, 2017 the Board issued a final rule that extended this range to run from October 1 of the calendar year preceding the year of the stress test to March 1 of the calendar year of the stress test.
The proposed rule would change the term “over $50 billion covered institution” to “$50 billion or over covered institution.” The change would not alter the scope of this defined term and would not change the substantive requirements of the regulation. The new defined term would be a more precise description of the entities included within this category, which includes all national banks and federal savings associations “with average total consolidated assets . . . that are not less than $50 billion.”
The proposed rule would also change the transition process for covered institutions that become an “over $50 billion covered institution.” On February 3, 2017, the Board issued a final rule that provides additional time for bank holding companies that cross the $50 billion asset threshold close to the April 5 submission date.
The stress testing timeline and transition process for national banks or federal savings associations which become $10 to $50 billion covered institutions remains unchanged. A national bank or federal savings association that becomes a $10 to $50 billion covered institution on or before March 31 of a given year would be required to conduct its first stress test in the next calendar year. For example, a national bank or federal savings association that becomes a $10 to $50 billion covered institution as of March 31, 2017 would be required to conduct its first stress test in the stress testing cycle beginning January 1, 2018. A national bank or federal savings association that becomes a $10 to $50 billion covered institution after March 31 of a given year would be required to conduct its first stress test in the second calendar year after the date the national bank or federal savings association becomes a covered institution. For example, a national bank or federal savings association that becomes a $10 to $50 billion covered institution on June 30, 2017 would be required to conduct its first stress test in the stress testing cycle beginning January 1, 2019.
In 2014 the OCC, in coordination with the Board and Federal Deposit Insurance Corporation, shifted the dates of the annual stress testing cycle by approximately three months.
The OCC requests comment on all aspects of the proposal.
Under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3520), the OCC may not conduct or sponsor, and a person is not required to respond to, an information collection unless the information collection displays a valid Office of Management and Budget (OMB) control number. This notice of proposed rulemaking amends 12 CFR part 46, which has an approved information collection under the PRA (OMB Control No. 1557-0319). The amendments proposed today do not introduce any new collections of information, nor do they amend 12 CFR part 46 in a way that modifies the collection of information that OMB has approved. Therefore, this proposal does not require a PRA submission to OMB.
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601
As discussed in the
The OCC has analyzed the proposed rule under the factors in the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532). Under this analysis, the OCC considered whether the proposed rule includes a federal mandate that may result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year (adjusted annually for inflation). The OCC has determined that this proposed rule will not result in expenditures by state, local, and tribal governments, or the private sector, of $100 million or more in any one year. Accordingly, this proposal is not subject to section 202 of the UMRA.
The Riegle Community Development and Regulatory Improvement Act of 1994 (RCDRIA) requires that each federal banking agency, in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions, consider, consistent with principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, new regulations and amendments to regulations that impose additional reporting, disclosures, or other new requirements on insured depository institutions generally must take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form.
Section 722 of the Gramm-Leach-Bliley Act requires the federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. The OCC has sought to present the proposed rule in a simple and straightforward manner, and invites comment on the use of plain language. For example:
• Has the OCC organized the material to suit your needs? If not, how could the OCC present the proposed rule more clearly?
• Are the requirements in the proposed rule clearly stated? If not, how could the proposed rule be more clearly stated?
• Do the regulations contain technical language or jargon that is not clear? If so, which language requires clarification?
• Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes would achieve that?
• Is this section format adequate? If not, which of the sections should be changed and how?
• What other changes can the OCC incorporate to make the regulation easier to understand?
Banking, Banks, Capital, Disclosures, National banks, Recordkeeping, Risk, Savings associations, Stress test.
For the reasons set forth in the preamble, the OCC proposes to amend 12 CFR part 46 as follows:
12 U.S.C. 93a; 1463(a)(2); 5365(i)(2); and 5412(b)(2)(B).
The revisions read as follows:
(b)
(c)
(2) Notwithstanding paragraph (c)(1) of this section, a national bank or Federal savings association that becomes a $50 billion or over covered institution, whether by migrating from being a $10 to $50 billion covered institution or by directly becoming a $50 billion or over covered institution, after September 30 of a calendar year
Each covered institution must conduct the annual stress test under this part subject to the following requirements:
(a)
(b)
(c)
(d)
(a)
(b)
(a)
(i) Unless the OCC determines otherwise, if the $50 billion or over covered institution is a consolidated subsidiary of a bank holding company or savings and loan holding company subject to supervisory stress tests conducted by the Board of Governors of the Federal Reserve System pursuant to 12 CFR part 252, then within the June 15 to July 15 period such covered institution may not publish the required summary of its annual stress test earlier than the date that the Board of Governors of the Federal Reserve System publishes the supervisory stress test results of the covered bank's parent holding company.
(ii) If the Board of Governors of the Federal Reserve System publishes the supervisory stress test results of the covered institution's parent holding company prior to June 15, then such covered institution may publish its stress test results prior to June 15, but no later than July 15, through actual publication by the covered institution or through publication by the parent holding company pursuant to paragraph (b) of this section.
(2)
Consumer Product Safety Commission.
Notice of proposed rulemaking.
This notice of proposed rulemaking (NPR) would update the existing notice of requirements (NOR) for prohibitions of children's toys and child care articles containing specified phthalates that provide the criteria and process for Commission acceptance of accreditation pursuant to the Consumer Product Safety Act (CPSA). The proposed NOR would revise the current NOR to be consistent with the final phthalates rule, which is published elsewhere in this same issue of the
Submit comments by January 10, 2018.
You may submit comments, identified by Docket No. CPSC-2017-0043, by any of the following methods:
Scott R. Heh, Project Manager, Directorate for Laboratory Sciences, Consumer Product Safety Commission, 5 Research Place, Rockville, MD 20850; telephone: 301-504-7646; email:
Section 108 of the Consumer Product Safety Improvement Act of 2008 (CPSIA) established requirements concerning concentration limits for specified phthalates in children's toys and child care articles. In this same issue of the
Because the phthalates rule revises the list of statutorily prohibited phthalates in children's toys and child care articles in section 108 of the CPSIA, this NPR proposes to amend the existing NOR for the prohibitions of children's toys and child care articles containing specified phthalates to reflect those changes.
Section 14(a) of the CPSA requires that products subject to a consumer product safety rule under the CPSA, or to a similar rule, ban, standard, or regulation under any other act enforced by the Commission, be certified as complying with all applicable CPSC requirements. 15 U.S.C. 2063(a). Such certification must be based on a test of each product, or on a reasonable testing program or, for children's products, on tests of a sufficient number of samples by a third party conformity assessment body accredited by the Commission to test according to the applicable requirements. The Commission's phthalates rule is considered a “consumer product safety standard.” 15 U.S.C. 2063c(f). Thus, products subject to the phthalates rule are subject to the testing and certification requirements of section 14 of the CPSA.
Because children's toys and child care articles are children's products, samples of these products must be tested by a third party conformity assessment body whose accreditation has been accepted by the Commission. These products also must comply with all other applicable CPSC requirements, such as the lead content requirements of section 101 of the CPSIA, the requirements of the toy standard, 16 CFR part 1250, and the tracking label requirement in section 14(a)(5) of the CPSA.
In accordance with section 14(a)(3)(B)(vi) of the CPSIA, the Commission has previously published two NORs for accreditation of third party conformity assessment bodies for testing children's toys and child care articles under section 108 of the CPSIA (76 FR 49286 (Aug. 10, 2011), 78 FR 15836 (March 12, 2013)).
If the Commission finalizes the NOR as proposed, the following process would be used during the transition period from test method CPSC-CH-C1001-09.3 (2010) to a revised version of the method, currently titled, draft test method CPSC-CH-C1001-09.4 (2017). CPSC would accept testing to support children's toys and child care article certifications to the new phthalates prohibitions if the laboratory is already CPSC-accepted to test to CPSC-CH-C1001-09.3 (2010). Laboratories that conduct testing to support product certifications to the new phthalates prohibitions must list in their test reports “16 CFR part 1307” and CPSC-CH-C1001-09.3 until laboratories have transitioned their accreditation scope and CPSC listing to CPSC-CH-C1001-09.4.
The CPSC would open the laboratory application process for draft test method CPSC-CH-C1001-09.4 (2017) on the date the final NOR rule is published in the
CPSC would accept testing results to the new phthalates prohibitions in 16 CFR part 1307 from laboratories that are CPSC-accepted to CPSC-CH-C1001-09.3 (2010) for two years from the date of publication of the final rule NOR in the
The proposed rule would amend 16 CFR 1112(b)(31), (31)(i) and (c)(3)(i) to update the references to reflect the promulgation of 16 CFR part 1307 and draft CPSC test method CPSC-CH-C1001-09.4 (2017). The draft test method would provide detailed
The APA generally requires that a substantive rule must be published not less than 30 days before its effective date. 5 U.S.C. 553(d)(1). Because the proposed rule would allow testing to continue under the existing testing method by testing laboratories that meet certain criteria for a period of up to two years after the publication of a final rule, the Commission proposes a 30 day effective date for the final rule.
The Regulatory Flexibility Act (RFA) requires an agency to prepare a regulatory flexibility analysis for any rule subject to notice and comment rulemaking requirements under the APA, or any other statute, unless the agency certifies that the rulemaking will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 603 and 605. Small entities include small businesses, small organizations, and small governmental jurisdictions.
The impact of the proposed rule on small testing laboratories would be minimal. The only laboratories that would be impacted are those that offer to test children's toys and child care articles for prohibited phthalates. These laboratories are already accredited by one or more accreditation bodies that are signatories to the International Laboratory Accreditation Cooperation—Mutual Recognition Arrangement (ILAC-MRA) and have had their accreditations accepted by the Commission. These laboratories would have to revise their procedures for testing for phthalate content to be consistent with the revised phthalate test method (CPSC-CH-C1001-09.4) which would replace the current phthalate test method (CPSC-CH-C1001-09.3) if the proposed NOR is finalized. Staff expects that the impact of revising testing procedures will be low for qualified laboratories because the same sample preparation, extraction methods, and equipment is used for both methods. Moreover, the additional phthalates included in draft CPSC-CH-C1001-09.4 can be isolated at unique elution times by gas chromatography and, therefore, the analysis should not be a burden for those qualified to perform such testing.
Additionally, within two years of the publication of the final NOR rule, laboratories would need to update their scope accreditation documents to include the revised phthalate test method (CPSC-CH-C1001-09.4). Staff expects that the burden of this requirement will also be low because testing laboratories typically must undergo a reassessment every two years in order to maintain their accreditations. Updating the accreditation scope documents to include the revised phthalate test method is a minor change and should result in little or no additional cost to a testing laboratory if completed during the periodic reassessment, which the 2-year window would allow testing laboratories to do.
After considering the economic impacts of this proposed rule on small entities, the Commission certifies that the proposed rule would not have a significant economic impact on a substantial number of small entities.
The Commission's regulations provide a categorical exclusion for the Commission's rules from any requirement to prepare an environmental assessment or an environmental impact statement because they “have little or no potential for affecting the human environment.” 16 CFR 1021.5(c)(2). This rule falls within the categorical exclusion, so no environmental assessment or environmental impact statement is required.
Administrative practice and procedure, Audit, Consumer protection, Incorporation by reference, Reporting and recordkeeping requirements, Third party conformity assessment body.
For the reasons discussed in the preamble, the Commission proposes to amend Title 16 CFR chapter II, as follows:
15 U.S.C. 2063; Pub. L. 110-314, section 3, 122 Stat. 3016, 3017 (2008).
The revisions read as follows:
(b) * * *
(31) 16 CFR part 1307, Prohibition of Children's Toys and Child Care Articles Containing Specified Phthalates. For its accreditation to be accepted by the Commission to test for phthalates in children's toys and child care articles, a third party conformity assessment body must have one or more of the following test methods referenced in its statement of scope:
(i) CPSC Test Method CPSC-CH-1001-09.4, “Standard Operating Procedure for Determination of Phthalates;
(c) * * *
(3) * * *
(i) CPSC-CH-C1001-9.4, “Standard Operating Procedure for Determination of Phthalates”, September 1, 2017.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Application for exemption; request for comments.
FMCSA announces that the Western Equipment Dealers Association (WEDA) has requested an exemption on behalf of several other organizations and their membership from the requirement that no later than December 18, 2017, a motor carrier require each of its drivers to use an electronic logging device (ELD) to record the driver's hours-of-service (HOS). WEDA states that equipment dealer operations in agriculture constitute unique circumstances that warrant the requested exemption, and not granting it will pose an undue burden on equipment dealers and their customers without any measurable safety benefit. In its application, WEDA seeks a five-year, renewable exemption from the ELD requirements which, the organization states, if granted will achieve a level of safety equivalent to, or greater than, the level that would be achieved absent the proposed exemption. FMCSA requests public comment on WEDA's application for exemption.
Comments must be received on or before November 27, 2017.
You may submit comments identified by Federal Docket Management System (FDMS) Number FMCSA-2017-0296 by any of the following methods:
•
•
•
•
• Each submission must include the Agency name and the docket number for this notice. Note that DOT posts all comments received without change to
For information concerning this notice, contact Mr. Tom Yager, Chief, FMCSA Driver and Carrier Operations Division; Office of Carrier, Driver and Vehicle Safety Standards; Telephone: 614-942-6477. Email:
FMCSA encourages you to participate by submitting comments and related materials.
If you submit a comment, please include the docket number for this notice (FMCSA-2017-0296), indicate the specific section of this document to which the comment applies, and provide a reason for suggestions or recommendations. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so the Agency can contact you if it has questions regarding your submission.
To submit your comments online, go to
FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from certain parts of the Federal Motor Carrier Safety Regulations (FMCSRs). FMCSA must publish a notice of each exemption request in the
The Agency reviews safety analyses and public comments submitted, and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the
WEDA filed this application for exemption on behalf of its own organization and the following: Northeast Equipment Dealers Association; North Dakota Implement Dealers Association; Midwest-South Eastern Equipment Dealers Association; Far West Equipment Dealers Association; Deep South Equipment Dealers Association; Equipment Dealers Association and the United Equipment Dealers Association.
These groups represent approximately 6,000 farm, industrial and outdoor power equipment dealers in North America. WEDA states that in the agriculture sector, equipment dealers play a key role in selling and servicing equipment for farmers and ranchers, as they transport machinery to and from farms and between dealerships. They partner with agricultural producers to increase productivity through the training and use of new equipment technologies. Complying with the ELD requirement will be unduly burdensome for equipment dealers and their customers—farmers and ranchers, without providing the sought-after safety advancements contemplated by the rule.
Many of the vehicles owned by equipment dealers require a commercial driver's license to operate. When transporting equipment to and from the farm, on behalf of the farmer, they are either delivering new equipment or transporting equipment to a dealership to be serviced. Equipment dealers also employ service trucks that drive to farms and ranches to work on customer's equipment and deliver parts to the customer's location. In either instance, these vehicles usually operate within a confined distance from the dealership of less than 150 miles, and are primarily in rural regions of their respective states.
WEDA states that due to the seasonal, unpredictable and rural nature of agriculture production, Congress has granted agriculture businesses numerous exemptions from transportation requirements. The clear intent was to accommodate agricultural operations by broadening the scope of existing agribusiness exemptions in terms of distance and types of entities covered by the exemption because the reality of farming and ranching operations required it.
WEDA explains that the agribusiness exemption to the HOS rules is separate and distinct from the short-haul exemption. Under 49 CFR (k)(1-3), equipment dealers are exempt from HOS and log book requirements during State-defined harvest and planting seasons when: (1) Transporting farm supplies for an agricultural purpose; (2) from the dealership to a farm; and (3) within a 150 air-mile radius of the distribution point. This exemption, however, does not cover transportation of equipment from the farm to a dealership.
The ELD rule, according to WEDA, creates confusing and overlapping scenarios due to the conflicting rules placed on equipment dealers. Depending on the State definition of harvest and planting season, an equipment dealer may be required to install an ELD for only the couple of months of the year when the agribusiness exemption is not in effect. The agribusiness exemption is limited in scope; therefore, an equipment dealer could be exempt from using an ELD in certain cases, while still required to utilize an ELD in others.
The ELD requirements threaten to limit the exemptions and weave a complex regulatory framework that would be difficult for equipment dealers to comply with, advises WEDA. The short-haul and agribusiness exceptions apply in different scenarios at different times, and it is unclear in the first instance whether both can be combined to cover a single driving operation. For example, the agribusiness exemption would not currently apply to an equipment dealer hauling a broken tractor from a farm to the dealership for repair. The short-haul exemption would apply, though, so long as the farm is within 100 miles and the HOS requirements are met. However, suppose a service truck hauling a trailer visits a farm 120 miles from the dealership to repair a tractor. After attempting repairs for several hours and working beyond 12 hours in the day, the technician must return with the tractor or another piece of equipment to perform services at the dealership. The short haul exemption would not apply because it is beyond the 100-mile radius and the HOS requirements have been exceeded, nor would the agribusiness exemption apply because a driver is not covered while transporting equipment from a farm to the dealership. The driver would then be required to record the entirety of the day's driving on an ELD because no exemption applies. This is but one scenario of many where three complex rules overlap at different intervals to create confusion about the regulations that should be followed, and do not contribute to increased safety for the driver or the driving public.
As a practical matter, WEDA states that equipment dealers are required to install ELDs in all of their commercial vehicles despite never or very rarely utilizing them. Because of the complex and confusing overlap, many dealers will install and utilize ELDs when unnecessary to avoid harsh penalties including thousands of dollars in fines and potential shutdown orders. Equipment dealers will not claim the exemptions intended for them by Congress because the confusion and complexity spawned by the ELD rule creates the risk of penalties being imposed which outweigh the benefits. The result will be severely diminished hours of operation for equipment dealers, and, consequently, reduced responsiveness to their customers. Costs and downtime for farmers and ranchers will undoubtedly increase making their agriculture producers less competitive in a global market.
WEDA states that its request falls within the FMCSA's discretion to grant because the law currently provides overlapping exemptions and exceptions that, taken together with the ELD mandate, create confusing and contradicting requirements for equipment dealers. In addition, equipment dealers' operations constitute unique aspects that should warrant an exemption from the ELD rules. WEDA therefore seeks a five-year, renewable exemption from the ELD requirements in the Federal regulations. WEDA believes the request should be granted because the exemption will achieve a level of safety equivalent to, or greater than, the level that would be achieved absent the proposed exemption.
A copy of WEDA's application for exemption is available for review in the docket for this notice.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Application for exemption; request for comments.
FMCSA announces that the Motion Picture Association of America (MPAA) has requested an exemption from the electronic logging device (ELD) requirements for all commercial motor vehicle (CMV) drivers providing transportation to or from a theatrical or television motion picture production site. MPAA request this exemption to allow these drivers to complete paper records of duty status (RODS) instead of using an ELD device. MPAA believes that the exemption would not have any adverse impacts on operational safety because drivers would remain subject to the hours-of-service (HOS) regulations as well as the requirements to maintain paper RODS. FMCSA requests public comment on MPAA's application for exemption.
Comments must be received on or before November 27, 2017.
You may submit comments identified by Federal Docket Management System (FDMS) Number FMCSA-2017-0298 by any of the following methods:
•
•
•
•
• Each submission must include the Agency name and the docket number for this notice. Note that DOT posts all comments received without change to
For information concerning this notice, contact Mr. Tom Yager, Chief, FMCSA Driver and Carrier Operations Division; Office of Carrier, Driver and Vehicle Safety Standards; Telephone: 614-942-6477. Email:
FMCSA encourages you to participate by submitting comments and related materials.
If you submit a comment, please include the docket number for this notice (FMCSA-2017-0298), indicate the specific section of this document to which the comment applies, and provide a reason for suggestions or recommendations. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so the Agency can contact you if it has questions regarding your submission.
To submit your comments online, go to
FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from certain parts of the Federal Motor Carrier Safety Regulations (FMCSRs). FMCSA must publish a notice of each exemption request in the
The Agency reviews safety analyses and public comments submitted, and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the
MPAA is requesting an exemption from the ELD requirements in 49 CFR part 395 published in the
MPAA reports that approximately 6,500 CMV drivers operate CMVs on a full or part-time basis for the motion picture industry. According to HOS data developed by third party compliance services, these drivers spend on average less than four hours each day driving and drive about 40 miles per day. Their resulting RODs are often very complex, as are the driver HOS records that employing motor carriers must keep. Through close cooperation, the industry has been able to manage the extensive interchange of paper RODs that this work pattern requires. MPAA asserts that industry's success in HOS management is based on a system that is driver-based rather than vehicle-based.
According to MPAA, few production drivers qualify for the short-haul driver exception in 49 CFR 395.1(e)(1) and
MPAA contends that the lack of interoperability among ELD platforms developed by various manufacturers means that motion picture company drivers will not be able to transfer HOS data from one carrier or vehicle to other carriers or vehicles. A driver who is required to use an ELD may operate a CMV that has one operating system installed on the truck. When the driver transfers to operating for another studio or production company, that company may use a different ELD operating system for its vehicles. The HOS data cannot automatically be transferred from the first company's vehicle to the second company's system unless both ELD devices are on the same platform.
MPAA believes that requiring production company drivers to record their HOS using incompatible ELD platforms would prevent them from implementing more efficient or effective operations that would maintain a level of safety equivalent to, or greater than, the level achieved without the requested exemption. Allowing production company drivers to continue using paper RODS to record their HOS data will not jeopardize operational safety or increase fatigue-related crashes.
MPAA states that Congress and FMCSA already recognized the minimal safety concerns presented by motion picture production drivers due to the limited numbers of hours and miles they operate CMVs and the availability of frequent and extended periods of off duty time throughout the workday. As a result production drivers are already exempted from the typical HOS driving and on duty time limits as long as they operate within a 100 air-mile radius of the location where the driver reports to and is released from work.
Because production drivers operate CMVs so few miles and hours per day, motion picture production companies have driver and vehicle out-of-service rates that are substantially below the national averages for carriers in general. Until such time as all ELD platforms are fully interoperable, motion picture production drivers should be allowed to continue recording their HOS data using paper RODS.
A copy of MPAA's application for exemption is available for review in the docket for this notice.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments.
This proposed rule would make HMS Charter/Headboat permits a non-commercial category and create a separate regulatory provision for the commercial sale of Atlantic highly migratory species (HMS) by HMS Charter/Headboat permit holders. Currently, all vessels issued an HMS Charter/Headboat permit could be categorized as a commercial fishing vessel and subject to United States Coast Guard (USCG) commercial fishing vessel safety requirements if they also possess a state commercial sale permit, regardless of whether the permit holder engages or intends to engage in commercial fishing. Under the proposed rule, HMS Charter/Headboat permit holders would be prohibited from selling Atlantic tunas or swordfish unless they obtain a “commercial sale” endorsement for their permit. This proposed rule would clarify which HMS Charter/Headboat permitted vessels are properly categorized as commercial fishing vessels. This action would be administrative in nature and would not affect fishing practices or result in any significant environmental or economic impacts.
This proposed rule has a 15-day comment period. The abbreviated comment period is necessary to implement any management changes before January 1, 2018 to ensure all HMS charter/headboat vessels are appropriately categorized as commercial or non-commercial upon initial application or renewal of 2018 HMS Charter/Headboat permits. We do not anticipate the proposal to be controversial or to generate significant public comment and believe that a 15-day comment period will be sufficient to attract any substantive public input.
Written comments must be received by November 13, 2017. An operator-assisted, public conference call and webinar will be held on November 1, 2017, from 2:00 p.m. to 4:00 p.m., EST.
The conference call information is phone number 1 (888) 664-9965; participant passcode 5355311. Participants are strongly encouraged to log/dial in fifteen minutes prior to the meeting. NMFS will show a brief presentation via webinar followed by an opportunity for public comment. To join the webinar go to:
You may submit comments on this document, identified by NOAA-NMFS-2017-0124, by any of the following methods:
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•
Presentation materials and copies of the supporting documents—including the 2006 Consolidated HMS Fishery Management Plan (FMP) and its amendments and associated documents—are available from the HMS Management Division Web site at
Dianne Stephan or Tobey Curtis by phone at 978-281-9260, or Steve Durkee by phone at 202-670-6637.
Atlantic HMS regulations at 50 CFR 635.4(b) require that charter/headboat vessels (
Legislation and United States Coast Guard (USCG) commercial fishing vessel safety policies and regulatory interpretation may result in an increased compliance burden for HMS Charter/Headboat permitted vessels. Commercial fishing vessel safety provisions contained in the Coast Guard Authorization Act of 2010 (CGAA) and the Coast Guard and Maritime Transportation Act of 2012 were the subject of a Marine Safety Information Bulletin (MSIB 12-15) issued by the USCG on October 20, 2015. MSIB 12-15 clarified that the law would require mandatory dockside safety exams to a broader population of commercial fishing vessels. As clarified in the notice, that broader community included HMS Charter/Headboat vessels that were authorized by the permit to sell fish commercially (
The mandatory safety requirements have been difficult to enforce pending a more effective way to identify which HMS Charter/Headboat permit holders engage in commercial fishing and are therefore subject to the requirements. After receiving questions about applicability from NMFS and the regulated community, on July 10, 2017, the USCG issued Marine Safety Information Bulletin (MSIB 008-17) in an attempt to clarify the applicability of commercial fishing vessel safety requirements for vessels with HMS permits, including HMS Charter/Headboat permits. USCG regulations at 46 CFR 28.50 define a commercial fishing vessel as a vessel that commercially engages in the catching, taking, or harvesting of fish, or an activity that can reasonably be expected to result in the catching, taking, or harvesting of fish. According to the MSIB 008-17, if an individual has an HMS Charter/Headboat permit (which allows commercial sale) and a state permit to sell catch, the vessel is considered subject to commercial fishing vessel safety regulations.
Many HMS Charter/Headboat operators that neither sell, nor intend to sell, their catch but hold a permit to sell have thus found that the USCG policy identifies their operations as a “commercial fishing vessel,” and requires them to adhere to USCG commercial fishing vessel safety requirements. For example, even small charter vessels (
In late 2016 and early 2017, NMFS and the USCG staff informally discussed how to more effectively categorize HMS charter/headboat vessels under USCG regulations. On October 6, 2017, the USCG formally reviewed this proposed rule and concurred with the approach to provide clarity on the applicability on their requirements. The HMS Advisory Panel discussed this issue at length at its May and September 2017 meetings. Many HMS Advisory Panel members, including commercial, recreational, and council/state representatives, supported creating a separate regulatory provision for charter/headboat vessels that intend to sell HMS and to thus specify that other such vessels were not engaged in commercial sale and not subject to expensive USCG commercial vessel compliance obligations. Panel members stated that creating a separate sale provision would support more appropriate application and enforcement of USCG commercial fishing vessel safety requirements in the Atlantic HMS Charter/Headboat fishery, and would better clarify for permit holders which USCG regulations apply to their vessels and fishing operations.
This rule proposes to create a “commercial sale” endorsement on the existing HMS Charter/Headboat permit. Under the proposed rule, HMS Charter/Headboat permit holders would be prohibited from selling any catch of HMS unless they first obtain a “commercial sale” endorsement on their permit. Only those HMS Charter/Headboat permit holders with the endorsement would be permitted to sell Atlantic tunas or swordfish or sharks if they also have the additionally required commercial shark permit.
This proposed rule clarifies that any HMS Charter/Headboat vessel that selects this commercial sale endorsement would be categorized as a commercial fishing vessel under USCG criteria, and therefore subject to USCG commercial fishing vessel safety requirements. Those vessels issued an HMS Charter/Headboat permit without a “commercial sale” endorsement would not be categorized as a commercial fishing vessel and would not be subject to the USCG commercial fishing vessel safety requirements. HMS Charter/Headboat permit holders with the commercial sale endorsement selling a tuna or swordfish must adhere to the applicable Atlantic Tunas General Category or General Commercial Swordfish permit possession limits and restrictions, and the landings would be applied against the appropriate commercial quota. HMS Charter/Headboat permit holders that sell or intend to sell sharks must also obtain
NMFS is requesting comments on the alternatives and analyses described in this proposed rule, Initial Regulatory Flexibility Act Analysis (IRFA) and Regulatory Impact Review (RIR). Comments may be submitted via
Comments on this proposed rule may be submitted via
Pursuant to the Magnuson-Stevens Fishery Management and Conservation (Magnuson-Stevens) Act, the NMFS Assistant Administrator has determined that the proposed rule is consistent with the 2006 Consolidated HMS FMP and its amendments, other provisions of the Magnuson-Stevens Act, Atlantic Tunas Convention Act, and other applicable law, subject to further consideration after public comment.
This proposed rule has been determined to be not significant for purposes of Executive Order 12866.
This proposed rule contains a collection-of-information requirement subject to the Paperwork Reduction Act (PRA) and which has been submitted to OMB under control number (0648-0327). Public reporting burden for HMS Charter/Headboat permit applications initial response is estimated to average 30 minutes and renewal by telephone or web is estimated to average 6 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 of information. Send comments regarding this burden estimate, or any other aspect of this data collection, including suggestions for reducing the burden, to NMFS (see
Notwithstanding any other provision of the law, no person is required to respond to, and no person shall be subject to 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.
For the reasons described in the preamble, this proposed rule is expected to be deregulatory under Executive Order 13771.
This proposed rule has a 15-day comment period. The abbreviated comment period is necessary to implement any management changes before January 1, 2018 to ensure all HMS charter/headboat vessels are appropriately categorized as commercial or non-commercial upon initial application or renewal of 2018 HMS Charter/Headboat permits. This will avoid additional administrative burden on the agency and the regulated community that would result from a later implementation date, which would require those vessel owners needing the commercial endorsement to engage in an additional process. We do not anticipate the proposal to be controversial or to generate significant public comment and believe that a 15-day comment period will be sufficient to attract any substantive public input.
NMFS prepared an IRFA, as required by section 603 of the Regulatory Flexibility Act (RFA). The IRFA describes the economic impact this proposed rule, if adopted, would have on small entities. A copy of this analysis is available from NMFS (see
A description of the action, why it is being considered, and the legal basis for this action are contained in the Background section of the preamble and in the
Section 603(b)(3) of the RFA requires agencies to provide an estimate of the number of small entities to which the rule would apply. The Small Business Administration (SBA) has established size criteria for all major industry sectors in the United States, including for-hire charter/headboat businesses. For-hire charter/headboat business fit into the “Scenic and Sightseeing Transportation, Water” industry under NAICS code 487210. SBA has established that the small entity size standard for that industry is $7.5 million in average annual receipts.
Provision is made under SBA's regulations for an agency to develop its own industry-specific size standards after consultation with Advocacy and an opportunity for public comment (see 13 CFR 121.903(c)). Under this provision, NMFS may establish size standards that differ from those established by the SBA Office of Size Standards, but only for use by NMFS and only for the purpose of conducting an analysis of economic effects in fulfillment of the agency's obligations under the RFA. To utilize this provision, NMFS must publish such size standards in the
NMFS considers all HMS Charter/Headboat permit holders (3,594 as of October 2016) to be small entities because these vessels have reported annual gross receipts of less than $11 million for commercial fishing or earn less than $7.5 million from for-hire fishing trips.
NMFS has determined that this proposed rule would apply to the small businesses associated with the approximately seven percent of HMS Charter/Headboat permit holders that also commercially fish for swordfish and tuna. Based on the most recent number of permit holders, NMFS estimates that this proposed rule would apply to approximately 252 HMS Charter/Headboat vessel owners. NMFS has determined that this action would not likely directly affect any small organizations or small government jurisdictions defined under the RFA.
Section 603(b)(4) of the RFA requires Agencies to describe any new reporting, record-keeping and other compliance requirements. This proposed rule would create a “commercial sale” endorsement for the HMS Charter/Headboat permit. Under the proposed rule, HMS Charter/Headboat permit holders would be prohibited from selling any catch of HMS unless they obtain a commercial sale endorsement on their permit. The commercial sale endorsement could be added to the Charter/Headboat permit at the time of the permit application or renewal, or anytime thereafter. Only Charter/Headboat permit holders with the endorsement would be allowed to sell HMS although they would not be obligated to sell any HMS. There would be no additional charge for the commercial sale endorsement above the cost of the HMS Charter/Headboat permit; the endorsement would add less than a minute more of labor effort to the normal HMS Charter/Headboat permit process. Those vessels issued an HMS Charter/Headboat permit with a “commercial sale” endorsement would be categorized as a commercial vessel for the purposes of USCG commercial fishing vessel safety requirement.
This proposed rule has been determined not to duplicate, overlap, or conflict with any Federal rules. This rule is being proposed to address changes in USCG commercial fishing vessel safety policies and regulatory interpretation that would result in an increased compliance burden for HMS Charter/Headboat permit holders due to the Coast Guard's broader definition of commercial fishing vessels. This proposed rule would clarify which HMS charter/headboat vessels are truly operating as commercial fishing vessels versus those that neither sell, nor intend to sell, their catch, which includes the majority of charter/headboat vessels.
NMFS considered four different alternatives to separate the commercial sale provision from the HMS Charter/Headboat permit, and thus relieve some HMS Charter/Headboat permit holders from the changes in USCG commercial fishing vessel safety requirements. Alternative 1, the status quo/no action alternative, would make no changes to current HMS regulations. Alternative 2, the preferred alternative, would create an endorsement for the HMS Charter/Headboat permit that allows commercial sale of Atlantic tunas and swordfish. Alternative 3 would remove the commercial sale provision of the HMS Charter/Headboat permit. Alternative 4 would create two separate HMS Charter/Headboat permits; one that allows commercial sale of Atlantic tunas and swordfish, and one that does not.
Under the “no action” Alternative 1, NMFS would maintain the current regulations regarding the Atlantic HMS Charter/Headboat permit. Under current regulations at 635.4(b), permit holders taking fee-paying passengers to fish for HMS (
Under the USCG commercial fishing vessel safety requirements, many Atlantic HMS charter/headboats would have to comply with four rule requirements for survival craft, record keeping, examinations and certificates of compliance, and classing of vessels.
The survival craft requirement establishes that all fishing industry vessels operating beyond 3 nautical miles must carry survival craft that will meet a new performance standard for primary lifesaving equipment. The use of “lifeboats or liferafts” are required for commercial vessels, whereas strictly for-hire vessels are only required to a have “a survival craft that ensures that no part of an individual is immersed in water.” This means that lifefloats and buoyant apparatus will no longer be accepted as survival craft on any commercial fishing vessel operating beyond 3 nautical miles once the most recent USCG guidance in fully enforced. Some HMS Charter/Headboat permitted vessels would incorrectly be identified as commercial vessels, subject to the more stringent lifeboat/liferaft requirements. USCG estimates that the maximum initial cost of this requirement per vessel will be $1,740 and have a recurring annual cost of $300. The records provision requires the individual in charge of a vessel operating beyond 3 nautical miles to maintain a record of lifesaving and fire equipment maintenance. It will be incumbent upon the master/individual in charge of the vessel to maintain these records onboard. The USCG estimates this record keeping requirement will cost $18 annually per vessel.
The examinations and certificates of compliance provision requires a dockside safety examination at least once every 5 years for vessels, such as HMS charter/headboats that engage in commercial fishing, operating beyond 3 nautical miles with the first exam statutorily required by October 15, 2015. A “certificate of compliance” will be issued to a vessel successfully completing the exam. Voluntary exams will continue to be promoted for vessels operating inside 3 nautical miles. USCG estimates that the maximum initial cost of this requirement per vessel will be $600 and have a recurring cost of $600.
The classing of vessels provision requires the survey and classification of a fishing vessel that is at least 50 feet overall in length, was built after July 1, 2013, and operates beyond 3 nautical miles. It is unlikely that this requirement will impact many Atlantic HMS charter/headboat vessels because the vessels are typically less than 50 feet overall in length.
In sum, all 3,594 Atlantic HMS Charter/Headboat permit holders would face an initial per vessel cost of $2,358. The annual cost savings per vessel in subsequent years would be approximately $300 for the survival craft, $18 for record keeping, and $120 ($600/5 yrs) for examinations and certificates of completion. The total annual recurring cost saving per vessel would be $438 for these three requirements. These costs could be higher for some individual vessels that are too small or have too little storage space for the survival craft requirement because those vessels might require extensive modifications to accommodate the storage space for the gear.
Under Alternative 2, the preferred alternative, NMFS would modify the regulations so that the HMS Charter/Headboat permit alone does not allow
The cost savings associated with implementing a commercial endorsement option for Atlantic HMS Charter/Headboat permits would be that approximately 93 percent of the permit holders would not have to comply with the costs associated with the USCG commercial fishing vessel safety requirements, since Atlantic HMS Charter/Headboat permit holders would not be considered commercial fishing vessels unless they were issued the commercial endorsement. The reduced costs per vessel initially would be approximately $1,740 for the survival craft, $18 for record keeping, and $600 for examinations and certificates of completion. The total initial costs saved per vessel would be $2,358. The annual cost savings per vessel in subsequent years would be approximately $300 for the survival craft, $18 for record keeping, and $120 ($600/5 yrs) for examinations and certificates of completion. The total annual recurring cost saving per vessel would be $438 for these three requirements. In addition to the reduced costs associated with complying with the USCG commercial fishing vessel safety requirements for those HMS Charter/Headboat permit holders that do not intend to obtain the endorsement to fish commercially, most Atlantic HMS Charter/Headboat permit holders would have to do nothing different when obtaining their permit unless they want to commercially sell tunas or swordfish.
For the approximately 7 percent of Atlantic Charter/Headboat permit holders that want to obtain a commercial endorsement to continue selling tunas and swordfish in addition to complying with the USCG commercial fishing vessel safety requirements, they would need to obtain an endorsement for the commercial sale of Atlantic tunas and swordfish. HMS charter/headboat permit holders issued the commercial sale endorsement selling sharks must obtain a commercial shark permit in addition to an HMS Charter/Headboat permit. This would likely only add a minute or so to the time it takes to obtain the Atlantic HMS Charter/Headboat permit and it would not add to the cost of obtaining the permit. NMFS would incur some costs associated with altering the online permit application to accommodate the endorsement, along with some customer service changes.
Under Alternative 3, NMFS would remove the commercial sale provision of the HMS Charter/Headboat permit. Currently, charter/headboat vessels are able, though not obligated, to sell swordfish and tunas as a condition of the HMS Charter/Headboat permit and may sell sharks if they also have a commercial shark permit. Consequently, vessels that hold an HMS Charter/Headboat permit currently are being categorized by USCG as commercial fishing vessels and subject to USCG commercial fishing vessel safety requirements if they also hold a state commercial sale permit, regardless of whether the permit holder engages or intends to sell HMS. Under Alternative 3, NMFS would remove the provision that allows commercial sales under the HMS Charter/Headboat permit. Thus, holding an HMS Charter/Headboat permit would no longer categorize a vessel as a commercial fishing vessel. charter/headboat vessel owners or operators that wish to engage in commercial sale of tunas and swordfish would instead need to obtain an Atlantic tunas General category and/or Swordfish General Commercial permit. The Atlantic Tunas General category and Swordfish General Commercial permits could be held in conjunction with the HMS Charter/Headboat permit. Those vessels with an HMS Charter/Headboat permit that do not intend to sell HMS and do not obtain an Atlantic Tunas General category, Swordfish General Commercial, or commercial shark permit would not be subject to USCG commercial fishing vessel safety requirements.
The benefits of Alternative 3 versus the No Action alternative would be identical to Alternative 2. Approximately 93 percent of the permit holders would not have to face the costs associated with the USCG commercial fishing safety requirements, since Atlantic HMS Charter/Headboat permit holders would not be considered commercial fishing. The reduced costs for the fleet would be approximately $7,880,436 initially, and then $3,067,956 annually thereafter. The 7 percent that wish to engage in commercial sale of tunas and swordfish would instead need to obtain an Atlantic tunas General category and/or Swordfish General Commercial permit. This would cost them $20 to obtain either the Atlantic Tunas General category permit or the Swordfish General Commercial permit. For the approximately 252 vessel owners that might obtain these $20 permits, the total cost would be $5,040 to $10,080 annually depending on whether they obtain one or both permits. In addition, vessel owners may need to expend a bit more time to complete the application for these additional permits. NMFS would incur costs associated with the substantial permits site and customer service changes that would be required for this change. NMFS prefers Alternative 2 over Alternative 3 because a commercial sale endorsement requirement more closely matches current fishing practices and would minimize disruptions. Currently, HMS Charter/Headboat permit holders can sell some HMS and Alternative 2 would allow them to continue by simply obtaining an endorsement on their Charter/Headboat permit. Alternative 3 would be more disruptive since it would require fishermen to obtain additional permits.
Under Alternative 4, NMFS would create two separate Atlantic HMS Charter/Headboat permits; one that allows commercial sale of Atlantic tunas and swordfish, and one that does not. Currently, charter/headboat vessels are able, though not obligated, to sell swordfish and tunas as a condition of the HMS Charter/Headboat permit. Consequently, vessels that hold an HMS Charter/Headboat permit could be
The benefits of Alternative 4 versus the No Action alternative would be identical to those provided by Alternative 2. Approximately 93 percent of the permit holders would not have to face the costs associated with the USCG commercial fishing safety requirements, since Atlantic HMS Charter/Headboat permit holders would not be considered commercial fishing. The reduced costs for the fleet would be approximately $7,880,436 initially, and then $3,067,956 annually thereafter. Under this alternative, each of the 3,594 Atlantic HMS Charter/Headboat permit holders would have to determine which type of Charter/Headboat permit they wish to obtain for the year, and all of charter/headboat vessel owners would have to learn the new permit process. Unlike Alternative 3, there would be no additional costs associated with obtaining a commercial permit, because under this alternative each would pick either the no-sale HMS Charter/Headboat permit or the commercial sale Charter/Headboat permit. NMFS would incur costs associated with the substantial permits site and customer service changes that would be required for this change. NMFS would need to develop new regulatory text to describe these two new permits and fishery participants would have to learn and adapt to these changes.
Fisheries, Fishing, Fishing vessels, Foreign relations, Imports, Penalties, Reporting and recordkeeping requirements, Treaties.
For reasons set out in the preamble, 50 CFR part 635 is proposed to be amended as follows:
16 U.S.C. 971
The additions and revisions read as follows:
(a) * * *
(5)
(b) * * *
(3) The owner of a charter boat or headboat that intends to sell Atlantic tunas or swordfish must obtain a commercial sale endorsement for the vessel's HMS Charter/Headboat permit. The owner of a charter boat or headboat that intends to sell Atlantic sharks must obtain a commercial sale endorsement for the vessel's HMS Charter/Headboat permit and must also obtain any applicable Atlantic commercial shark permits. A vessel owner that has obtained an HMS Charter/Headboat permit without a commercial sale endorsement is prohibited from selling any Atlantic HMS.
(d) * * *
(1) The owner of each vessel used to fish for or take Atlantic tunas commercially or on which Atlantic tunas are retained or possessed with the intention of sale must obtain an HMS Charter/Headboat permit with a commercial sale endorsement issued under paragraph (b) of this section, an HMS Commercial Caribbean Small Boat permit issued under paragraph (o) of this section, or an Atlantic tunas permit in one, and only one, of the following categories: General, Harpoon, Longline, Purse Seine, or Trap.
(2) Persons aboard a vessel with a valid Atlantic Tunas, HMS Angling, HMS Charter/Headboat, or an HMS Commercial Caribbean Small Boat permit may fish for, take, retain, or possess Atlantic tunas, but only in compliance with the quotas, catch limits, size classes, and gear applicable to the permit or permit category of the vessel from which he or she is fishing. Persons may sell Atlantic tunas only if the harvesting vessel has a valid permit in the General, Harpoon, Longline, Purse Seine, or Trap category of the Atlantic Tunas permit, a valid HMS Charter/Headboat permit with a commercial sale endorsement, or an HMS Commercial Caribbean Small Boat permit.
(f)
(1) Except as specified in paragraphs (n) and (o) of this section, the owner of a vessel of the United States used to fish for or take swordfish commercially from the management unit, or on which swordfish from the management unit are retained or possessed with an intention to sell, or sold must obtain, an HMS Charter/Headboat permit with a commercial sale endorsement issued under paragraph (b) of this section, or one of the following swordfish permits: A swordfish directed limited access permit, swordfish incidental limited access permit, swordfish handgear limited access permit, or a Swordfish General Commercial permit. These permits cannot be held in combination with each other on the same vessel, except that an HMS Charter/Headboat permit with a commercial sale endorsement may be held in combination with a swordfish handgear
(2) The only valid commercial Federal vessel permits for swordfish are the HMS Charter/Headboat permit with a commercial sale endorsement issued under paragraph (b) of this section (and only when on a non for-hire trip), the Swordfish General Commercial permit issued under paragraph (f) of this section, a swordfish limited access permit issued consistent with paragraphs (l) and (m) of this section, or permits issued under paragraphs (n) and (o) of this section.
(m) * * *
(2)
(d) * * *
(4) Persons on a vessel issued a permit with a shark endorsement under § 635.4 may possess a shark only if the shark was taken by rod and reel or handline, except that persons on a vessel issued both an HMS Charter/Headboat permit with a commercial sale endorsement (with or without a shark endorsement) and a Federal Atlantic commercial shark permit may possess sharks taken by rod and reel, handline, bandit gear, longline, or gillnet if the vessel is engaged in a non for-hire fishing trip and the commercial shark fishery is open pursuant to § 635.28(b).
(f)
(1) When on a for-hire trip as defined at § 635.2, vessels issued an HMS Charter/Headboat permit under § 635.4(b), that are charter boats as defined under § 600.10 of this chapter, may retain, possess, or land no more than one North Atlantic swordfish per paying passenger and up to six North Atlantic swordfish per vessel per trip. When such vessels have been issued a commercial sale endorsement and are on a non for-hire trip, they must comply with the commercial retention limits for swordfish specified at § 635.24(b)(4).
(2) When on a for-hire trip as defined at § 635.2, vessels issued an HMS Charter/Headboat permit under § 635.4(b), that are headboats as defined under § 600.10 of this chapter, may retain, possess, or land no more than one North Atlantic swordfish per paying passenger and up to 15 North Atlantic swordfish per vessel per trip. When such vessels have been issued a commercial sale endorsement and are on a non for-hire trip, they may land no more than the commercial retention limits for swordfish specified at § 635.24(b)(4).
(c) * * *
(3) When fishing other than in the Gulf of Mexico and when the fishery under the General category has not been closed under § 635.28, a person aboard a vessel that has been issued an HMS Charter/Headboat permit with a commercial sale endorsement may fish under either the retention limits applicable to the General category specified in paragraphs (a)(2) and (a)(3) of this section or the retention limits applicable to the Angling category specified in paragraphs (b)(2) and (b)(3) of this section. The size category of the first BFT retained will determine the fishing category applicable to the vessel that day. A person aboard a vessel that has been issued an HMS Charter/Headboat without a commercial sale endorsement permit may fish only under the retention limits applicable to the Angling category.
(b) * * *
(4) Persons aboard a vessel that has been issued a Swordfish General Commercial permit or an HMS Charter/Headboat permit with a commercial sale endorsement (and only when on a non for-hire trip) are subject to the regional swordfish retention limits specified at paragraph (b)(4)(iii), which may be adjusted during the fishing year based upon the inseason regional retention limit adjustment criteria identified in paragraph (b)(4)(iv) below.
(ii)
(a) * * *
(1) * * *
(i) Catches from vessels for which General category Atlantic Tunas permits have been issued and certain catches from vessels for which an HMS Charter/Headboat permit with a commercial sale endorsement has been issued are counted against the General category quota in accordance with § 635.23(c)(3). Pursuant to paragraph (a) of this section, the amount of large medium and giant bluefin tuna that may be caught, retained, possessed, landed, or sold under the General category quota is 466.7 mt, and is apportioned as follows, unless modified as described under paragraph (a)(1)(ii) of this section:
(c) * * *
(1) * * *
(i) * * *
(A) A swordfish from the North Atlantic stock caught prior to the directed fishery closure by a vessel for which a directed swordfish limited access permit, a swordfish handgear limited access permit, a HMS Commercial Caribbean Small Boat permit, a Swordfish General Commercial open access permit, or an HMS Charter/Headboat permit with a commercial sale endorsement (and only when on a non for-hire trip) has been issued or is required to have been issued is counted against the directed fishery quota. The total baseline annual fishery quota, before any adjustments, is 2,937.6 mt dw for each fishing year. Consistent with applicable ICCAT recommendations, a portion of the total baseline annual fishery quota may be used for transfers to another ICCAT contracting party. The annual directed category quota is calculated by adjusting for over- or under harvests, dead discards, any applicable transfers, the incidental category quota, the reserve quota and other adjustments as needed, and is subdivided into two equal semi-annual periods: One for January 1 through June 30, and the other for July 1 through December 31.
(B) A swordfish from the North Atlantic swordfish stock landed by a vessel for which an incidental swordfish limited access permit, an incidental HMS Squid Trawl permit, an HMS Angling permit, or an HMS Charter/Headboat permit (and only when on a for-hire trip) has been issued, or a swordfish from the North Atlantic stock caught after the effective date of a closure of the directed fishery from a vessel for which a swordfish directed limited access permit, a swordfish handgear limited access permit, a HMS Commercial Caribbean Small Boat permit, a Swordfish General Commercial open access permit, or an HMS Charter/Headboat permit with a commercial sale endorsement (when on a non for-hire trip) has been issued, is counted against the incidental category quota. The annual incidental category quota is 300 mt dw for each fishing year.
(a) * * *
(1) A person that owns or operates a vessel from which an Atlantic tuna is landed or offloaded may sell such Atlantic tuna only if that vessel has a valid HMS Charter/Headboat permit with a commercial sale endorsement; a valid General, Harpoon, Longline, Purse Seine, or Trap category permit for Atlantic tunas; or a valid HMS Commercial Caribbean Small Boat permit issued under this part and the appropriate category has not been closed, as specified at § 635.28(a). However, no person may sell a bluefin tuna smaller than the large medium size class. Also, no large medium or giant bluefin tuna taken by a person aboard a vessel with an Atlantic HMS Charter/Headboat permit fishing in the Gulf of Mexico at any time, or fishing outside the Gulf of Mexico when the fishery under the General category has been closed, may be sold (see § 635.23(c)). A person may sell Atlantic bluefin tuna only to a dealer that has a valid permit for purchasing Atlantic bluefin tuna issued under this part. A person may not sell or purchase Atlantic tunas harvested with speargun fishing gear.
(c) * * *
(6) A dealer issued a permit under this part may not first receive silky sharks, oceanic whitetip sharks or scalloped, smooth, or great hammerhead sharks from an owner or operator of a fishing vessel with pelagic longline gear on board, or from the owner of a fishing vessel issued both a HMS Charter/Headboat permit with a commercial sale endorsement and a commercial shark permit when tuna, swordfish or billfish are on board the vessel, offloaded from the vessel, or being offloaded from the vessel.
(a) * * *
(2) Fish for, catch, possess, retain, land, or sell Atlantic HMS without the appropriate valid vessel permit, LAP, EFP, scientific research permit, display permit, chartering permit, or shark research permit on board the vessel, as specified in §§ 635.4 and 635.32.
(62) A vessel owner that has obtained an HMS Charter/Headboat permit without a commercial sale endorsement is prohibited from selling any Atlantic HMS.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by November 27, 2017 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB),
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
National Agricultural Statistics Service.
Correction notice: replacement notice request for comments.
The Department of Agriculture published a document in the
The Department of Agriculture will submit the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13 on or after the date of publication of this notice. Comments are requested regarding: (1) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology should be addressed to: Desk Officer for Agriculture, Office of Information and
Comments regarding these information collections are best assured of having their full effect if received by November 27, 2017. Copies of the submission(s) may be obtained by calling (202) 720-8681.
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Feedback collected under this generic clearance will provide useful information, but it will not yield data that can be generalized to the overall population. This type of generic clearance for qualitative information will not be used for quantitative information collections that are designed to yield reliably actionable results, such as monitoring trends over time or documenting program performance. Such data uses require more rigorous designs that address: The target population to which generalizations will be made, the sampling frame, the sample design (including stratification and clustering), the precision requirements or power calculations that justify the proposed sample size, the expected response rate, methods for assessing potential non-response bias, the protocols for data collection, and any testing procedures that were or will be undertaken prior fielding the study. Depending on the degree of influence the results are likely to have, such collections may still be eligible for submission for other generic mechanisms that are designed to yield quantitative results.
Animal and Plant Health Inspection Service, USDA.
Notice.
We are advising the public that the Animal and Plant Health Inspection Service has received a petition from Bayer CropScience LP seeking a determination of nonregulated status of cotton designated as event GHB811, which has been genetically engineered for dual resistance to the herbicides glyphosate and isoxaflutole. The petition has been submitted in accordance with our regulations concerning the introduction of certain genetically engineered organisms and products. We are making the Bayer CropScience LP petition available for review and comment to help us identify potential environmental and interrelated economic issues and impacts that the Animal and Plant Health Inspection Service may determine should be considered in our evaluation of the petition.
We will consider all comments that we receive on or before December 26, 2017.
You may submit comments by either of the following methods:
•
•
Supporting documents and any comments we receive on this docket may be viewed at
The petition is also available on the APHIS Web site at:
Dr. John Turner, Director, Environmental Risk Analysis Programs, Biotechnology Regulatory Services, APHIS, 4700 River Road, Unit 147, Riverdale, MD 20737-1236; (301) 851-3954, email:
Under the authority of the plant pest provisions of the Plant Protection Act (7 U.S.C. 7701
The regulations in § 340.6(a) provide that any person may submit a petition to the Animal and Plant Health Inspection Service (APHIS) seeking a determination that an article should not be regulated under 7 CFR part 340. Paragraphs (b) and (c) of § 340.6 describe the form that a petition for a determination of nonregulated status must take and the information that must be included in the petition.
APHIS has received a petition (APHIS Petition Number 17-138-01p) from Bayer CropScience LP of Research Triangle Park, NC (Bayer), seeking a determination of nonregulated status of cotton (
As described in the petition, GHB811 cotton was developed through agrobacterium-mediated transformation using the vector pTSIH09 containing hppdPfW336-1Pa and 2mepsps expression cassettes. The regulatory sequences used in this construct are derived from common plants or plant pathogens that are routinely used in plant biotechnology and have a history of safe use. GHB811 cotton is currently regulated under 7 CFR part 340. Interstate movements and field tests of GHB811 cotton have been conducted under notifications acknowledged by APHIS.
Field tests conducted under APHIS oversight allowed for evaluation in a natural agricultural setting while imposing measures to minimize the risk of persistence in the environment after completion of the tests. Data are gathered on multiple parameters and used by the applicant to evaluate agronomic characteristics and product performance. These and other data are used by APHIS to determine if the new variety poses a plant pest risk.
Paragraph (d) of § 340.6 provides that APHIS will publish a notice in the
In accordance with § 340.6(d) of the regulations and our process for soliciting public input when considering petitions for determinations of nonregulated status for GE organisms, we are publishing this notice to inform the public that APHIS will accept written comments regarding the petition for a determination of nonregulated status from interested or affected persons for a period of 60 days from the date of this notice. The petition is available for public review and comment, and copies are available as indicated under
After the comment period closes, APHIS will review all written comments received during the comment period and any other relevant information. Any substantive issues identified by APHIS based on our review of the petition and our evaluation and analysis of comments will be considered in the development of our decisionmaking documents. As part of our decisionmaking process regarding a GE organism's regulatory status, APHIS prepares a plant pest risk assessment to assess its plant pest risk and the appropriate environmental documentation—either an environmental assessment (EA) or an environmental impact statement (EIS)—in accordance with the National Environmental Policy Act (NEPA), to provide the Agency with a review and analysis of any potential environmental impacts associated with the petition request. For petitions for which APHIS prepares an EA, APHIS will follow our published process for soliciting public comment (see footnote 1) and publish a separate notice in the
Should APHIS determine that an EIS is necessary, APHIS will complete the NEPA EIS process in accordance with Council on Environmental Quality regulations (40 CFR part 1500-1508) and APHIS' NEPA implementing regulations (7 CFR part 372).
7 U.S.C. 7701-7772 and 7781-7786; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.3.
Rural Utilities Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35, as amended), the Rural Utilities Service (RUS) invites comments on the following information collection for which RUS intends to request approval from the Office of Management and Budget (OMB).
Comments on this notice must be received by December 26, 2017.
Thomas P. Dickson, Acting Director, Program Development and Regulatory Analysis, Rural Utilities Service, 1400 Independence Ave. SW., STOP 1522, Room 5164, South Building, Washington, DC 20250-1522.Telephone: (202) 690-4492. Fax: (202) 720-8435 or email
The Office of Management and Budget's (OMB) regulation (5 CFR part 1320) implementing provisions of the Paperwork Reduction Act of 1995 (Pub.
Copies of this information collection can be obtained from MaryPat Daskal, Program Development and Regulatory Analysis, at (202) 720-7853, Fax: (202) 720-8435 or email:
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
Office of the Secretary, Office of Civil Rights, Commerce.
The DOC received no comments in response to the 60-day notice published in the
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to OIRA
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
The DOC received no comments in response to the 60-day notice published in the
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
First Responder Network Authority, National Telecommunications and Information Administration, U.S. Department of Commerce.
Notice of availability of a final programmatic environmental impact statement.
The First Responder Network Authority (“FirstNet”) announces the availability of the Final Programmatic Environmental Impact Statement for the East Region (“Final PEIS”). The Final PEIS evaluates the potential environmental impacts of the proposed nationwide public safety broadband network in the East Region (Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia).
The Final PEIS is available for download from
For more information on the Final PEIS, contact Amanda Goebel Pereira, NEPA Coordinator, First Responder Network Authority, National Telecommunications and Information Administration, U.S. Department of Commerce, 12201 Sunrise Valley Drive, M/S 243, Reston, VA 20192, (571) 665-6072.
The Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96, Title VI, 126 Stat. 256 (codified at 47 U.S.C. 1401
The National Environmental Policy Act of 1969 (42 U.S.C. 4321-4347) (“NEPA”) requires federal agencies to undertake an assessment of environmental effects of their proposed actions prior to making a final decision and implementing the action. NEPA requirements apply to any federal project, decision, or action that may have a significant impact on the quality of the human environment. NEPA also establishes the Council on Environmental Quality (“CEQ”), which issued regulations implementing the procedural provisions of NEPA (see 40 CFR parts 1500-1508). Among other considerations, CEQ regulations at 40 CFR 1508.28 recommend the use of
Due to the geographic scope of FirstNet (all 50 states, the District of Columbia, and five territories) and the diversity of ecosystems potentially traversed by the project, FirstNet elected to prepare five regional PEISs. The five PEISs are divided into the East, Central, West, South, and Non-Contiguous Regions. The East Region consists of Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia. The Final PEIS analyzes potential impacts of the deployment and operation of the NPSBN on the natural and human environment in the East Region, in accordance with FirstNet's responsibilities under NEPA. Now that this PEIS has been completed and once a Record of Decision (ROD) has been signed, the proposed FirstNet projects can begin to submit the site-specific environmental documentation to determine if the proposed project has been adequately evaluated in the PEIS or whether it instead warrants a Categorical Exclusion, an Environmental Assessment, or an Environmental Impact Statement.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable October 27, 2017.
Ryan Mullen at 202-482-5260 (India); Justin Neuman and Jerry Huang at 202-482-0486 and 202-482-4047 (China), AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230.
On September 5, 2017, the Department of Commerce (Department) initiated countervailing duty investigations (CVD) on stainless steel flanges from India and the People's Republic of China (PRC).
Section 703(b)(1) of the Tariff Act of 1930, as amended (the Act), requires the Department to issue the preliminary determination in a CVD investigation within 65 days after the date on which the Department initiated the investigation. However, if the petitioner makes a timely request for a postponement, section 703(c)(1)(A) of the Act allows the Department to postpone making the preliminary determination until no later than 130 days after the date on which the Department initiated the investigation.
On October 4, 2017, the Coalition of American Flange Producers (the petitioners), petitioners in the underlying investigation, submitted timely requests pursuant to section 703(c)(1)(A) of the Act and 19 CFR 351.205(e) to postpone the preliminary determinations.
This notice is issued and published pursuant to section 703(c)(2) of the Act and 19 CFR 351.205(f)(1).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; request for comments.
The Assistant Regional Administrator for Sustainable Fisheries, Greater Atlantic Region, NMFS (Assistant Regional Administrator), has made a preliminary determination that an exempted fishing permit application contains all of the required information and warrants further consideration. This permit would allow Coonamessett Farm Foundation to test the selectivity of alternate gillnet configurations for targeting haddock on Georges Bank while reducing catch of other groundfish species. Up to five commercial fishing vessels would target haddock using alternate gillnet gears on Georges Bank, including Closed Area I, and temporarily retain undersized catch for measurement and data collection.
Regulations under the Magnuson-Stevens Fishery Conservation and Management Act require publication of this notification to provide interested parties the opportunity to comment on applications for proposed exempted fishing permits.
Comments must be received on or before November 13, 2017.
You may submit written comments by any of the following methods:
•
•
Kyle Molton, Fishery Management Specialist, 978-281-9236,
Coonamessett Farm Foundation (CFF) submitted a complete application for an exempted fishing permit (EFP) on August 16, 2017, to conduct commercial fishing activities that the regulations would otherwise restrict. The EFP would authorize five vessels to use test alternate gillnet configurations in Closed Area I and to temporarily retain undersized catch for measurement and data collection. The exemptions are necessary because vessels on commercial groundfish trips are prohibited from fishing in Closed Area I, using gillnets with mesh size less than 6.5 inches (16.51 cm), and from retaining undersized groundfish. The applicant is requesting access to Closed Area I in order to access high densities of haddock, which would result in a greater likelihood of achieving statistically significant results.
The project, titled “Testing Selectivity and Raised Webbing Gillnets on Target and Non-Target Species in the Northeast Haddock Fishery” would be conducted by CFF in cooperation with five commercial fishing vessels. The study would take place on Georges Bank, including in Closed Area I, from December 2017 through January 2019, with five vessels planning to fish no more than 24 trips total. Vessels would
A CFF researcher or technician would accompany all trips that occur under this EFP to identify all fish caught, as well as measure and weigh catch. Undersized fish would be discarded as quickly as possible after sampling. All Northeast multispecies of legal size would be landed, and all catch and estimated discards would be attributed to the vessel's sector annual catch entitlement, consistent with standard catch accounting procedures.
If approved, the applicant may request minor modifications and extensions to the EFP throughout the year. EFP modifications and extensions may be granted without further notice if they are deemed essential to facilitate completion of the proposed research and have minimal impacts that do not change the scope or impact of the initially approved EFP request.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
NMFS and the Western Pacific Fishery Management Council (Council) will convene a Western Pacific Stock Assessment Review (WPSAR) of a 2017 Benchmark Stock Assessment for the Main Hawaiian Islands (MHI) Deep 7 Bottomfish Complex.
See
The meeting will be held at the NMFS Honolulu Service Center at Pier 38, 1129 N. Nimitz Hwy., Suite 220, Honolulu, HI 96817.
Michael Seki, Director—Pacific Islands Fisheries Science Center, telephone: (808) 725-5360, or
Scientists from the NMFS Pacific Islands Fisheries Science Center (PIFSC) conducted a benchmark stock assessment of the MHI Deep 7 bottomfish complex. This benchmark assessment incorporated new data in the form of fishery-independent biomass estimates, and also followed data filtering recommendations from a series of five community workshops that involved fishermen, managers, and scientists on best practices for filtering bottomfish commercial catch and effort data from State of Hawaii commercial catch reports. Because of these workshops, PIFSC scientists are now able to better link individual fishermen's catch reports further back in time, and this linking is newly applied in this benchmark stock assessment.
This assessment used commercial data for the years 1948-2015, and assessed Deep 7 bottomfish by building on the modeling framework from the previous three assessments, but with improved data and data filtering as previously described, along with improvements to catch-per-unit-effort (CPUE) standardization, and other modeling approaches. The assessment also estimates unreported catches using catch and effort data following methods similar to those applied in previous assessments. After applying best practices from the workshop recommendations for filtering for CPUE calculation, PIFSC scientists applied model selection techniques to select the best structural form to standardize CPUE. CPUE in the model was split into two time series, fishing years 1948-2003, and fishing years 2003-2015 to accommodate new effort reporting from a change in reporting form by the State in October 2002.
The meeting schedule and agenda are as follows (8:30 a.m.-5 p.m. every day):
The agenda order may change. The meeting will run as late as necessary to complete scheduled business.
This meeting is physically accessible to people with disabilities. Please direct requests for sign language interpretation or other auxiliary aids to Michael Seki, Director—Pacific Islands Fisheries Science Center, (808) 725-5360 (phone) (808) 725-5360 (fax), at least 5 days prior to the meeting date.
16 U.S.C. 1801
Committee for Purchase From People Who Are Blind or Severely Disabled.
Deletions from the Procurement List.
This action deletes products and service from the Procurement List previously furnished by such agencies.
Date deleted from the Procurement List: 11/26/2017.
Committee for Purchase From People Who Are Blind or Severely Disabled, 1401 S. Clark Street, Suite 715, Arlington, Virginia 22202-4149.
Amy B. Jensen, Telephone: (703) 603-7740, Fax: (703) 603-0655, or email
On 9/22/2017 (F.R. Vol. 82, No. 183), the Committee for Purchase From People Who Are Blind or Severely Disabled published notice of proposed deletions from the Procurement List.
After consideration of the relevant matter presented, the Committee has determined that the products and services listed below are no longer suitable for procurement by the Federal Government under 41 U.S.C. 8501-8506 and 41 CFR 51-2.4.
I certify that the following action will not have a significant impact on a substantial number of small entities. The major factors considered for this certification were:
1. The action will not result in additional reporting, recordkeeping or other compliance requirements for small entities.
2. The action may result in authorizing small entities to furnish the products and service to the Government.
3. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 8501-8506) in connection with the products and service deleted from the Procurement List.
Accordingly, the following products and service are deleted from the Procurement List:
Committee for Purchase From People Who Are Blind or Severely Disabled.
Proposed Additions to and Deletion from the Procurement List.
The Committee is proposing to add product and service to the Procurement List that will be furnished by nonprofit agencies employing persons who are blind or have other severe disabilities, and deletes product previously furnished by such agencies.
Comments must be received on or before 11/26/2017.
Committee for Purchase from People Who Are Blind or Severely Disabled, 1401 S. Clark Street, Suite 715, Arlington, Virginia 22202-4149.
Amy B. Jensen, Telephone: (703) 603-7740, Fax: (703) 603-0655, or email
This notice is published pursuant to 41 U.S.C. 8503 (a)(2) and 41 CFR 51-2.3. Its purpose is to provide interested persons an opportunity to submit comments on the proposed actions.
If the Committee approves the proposed additions, the entities of the Federal Government identified in this notice will be required to procure the product and service listed below from nonprofit agencies employing persons who are blind or have other severe disabilities.
The following product and service are proposed for addition to the Procurement List for production by the nonprofit agencies listed:
The following product is proposed for deletion from the Procurement List:
Defense Acquisition Regulations System, Department of Defense (DoD).
Notice.
The Defense Acquisition Regulations System has submitted to OMB for clearance, the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by November 27, 2017.
Comments and recommendations on the proposed information collection should be sent to Ms. Jasmeet Seehra, DoD Desk Officer, at
You may also submit comments, identified by docket number and title, by the following method:
Written requests for copies of the information collection proposal should be sent to Mr. Licari at: WHS/ESD Directives Division, 4800 Mark Center Drive, 2nd Floor, East Tower, Suite 03F09, Alexandria, VA 22350-3100.
Defense Acquisition Regulations System, Department of Defense (DoD).
Notice.
The Defense Acquisition Regulations System has submitted to OMB for clearance, the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by November 27, 2017.
Mr. Mark Gomersall, 571-372-6099.
Comments and recommendations on the proposed information collection should be sent to Ms. Jasmeet Seehra, DoD Desk Officer, at
You may also submit comments, identified by docket number and title, by the following method:
Written requests for copies of the information collection proposal should be sent to Mr. Licari at: WHS/ESD Directives Division, 4800 Mark Center Drive, 2nd Floor, East Tower, Suite 03F09, Alexandria, VA 22350-3100.
Defense Security Cooperation Agency, Department of Defense.
Arms sales notice.
The Department of Defense is publishing the unclassified text of an arms sales notification.
Pamela Young, (703) 697-9107,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives, Transmittal 17-26 with attached Policy Justification and Sensitivity of Technology.
(i)
(ii)
(iii)
Non-MDE items and services for three-years (with option for two additional years) of follow-on support of two (2) C-17 aircraft includes participation in the Globemaster III Integrated Sustainment Program (GISP), contract logistic support, Class I modifications and kits support, in-country contractor support, alternate mission equipment, major modification
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* As defined in Section 47(6) of the Arms Export Control Act.
The Government of Kuwait has requested three years (with option for two additional years) of follow-on support of two (2) C-17 aircraft, which includes participation in the Globemaster III Integrated Sustainment Program (GISP), contract logistic support, Class I modifications and kits support, in-country contractor support, alternate mission equipment, major modification and retrofit, software support, aircraft maintenance and technical support, support equipment, personnel training and training equipment, additional spare and repair parts, technical orders and publications, airworthiness certification support, engine spares, engine maintenance and logistics support, inspections support, on-site COMSEC support, Quality Assurance and other U.S. Government and contractor engineering, logistics, and program support. Required upgrades will include fixed installation satellite antenna, Mode 5, plus installation and sustainment, Automatic Dependent Surveillance-Broadcast Out, and other related elements of logistics and program support. The estimated cost is $342.6 million.
This proposed sale will contribute to the foreign policy and national security of the United States by helping to improve the security of a friendly country. Kuwait plays a large role in U.S. efforts to advance stability in the Middle East, providing basing, access, and transit for U.S. forces in the region.
This proposed sale is required to maintain the operational readiness of the Kuwaiti Air Force C-17 aircraft. Kuwait's current FMS contract supporting its C-17's will expire in September of 2017. Kuwait will have no difficulty absorbing this support.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The prime contractor will be the Boeing Company, Chicago, IL. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
There is an on-going Foreign Military Sale (FMS) case providing C-17 sustainment services. There are currently nine (9) contractors from Boeing Company (aircraft) in-country providing Contractor Engineering Technical Services (CETS) on a continuing basis.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. This sale will involve the release of sensitive technology to the Government of Kuwait in the performance of services to sustain two (2) Kuwaiti C-17 aircraft. While much of the below equipment supporting the C-17 is not new to the country, there will be replenishment spares of these following sensitive technologies purchased to support the fleet.
2. The Force 524D is a 24-channel Selective Availability Anti-Spoofing Module (SAASM) based Global Positioning System (GPS) receiver with Precise Positioning Service (PPS) capability built upon Trimble's next generation GPS technology. The Force 524D retains backward compatibility with the proven Force 5GS while adding new functionality to interface with digital antenna electronics to significantly improve Anti-Jam (AJ) performance. The host platform can select the radio frequency (RF) or Digital Antenna Electronics (DAE) interface. In the digital mode, the Force 524D is capable of controlling up to 16 independent beams. The hardware and software associated with the 542D receiver card is UNCLASSIFIED.
3. The C-17 aircraft will be equipped with the GPS Anti-Jam System (GAS-1) antenna which consists of a multi-element Controlled Reception Pattern Antennas (CRPA) and separate antenna electronics which is able to recognize multiple sources of deliberate jamming and other electrical interference allowing the navigation equipment to function safely, accurately, and efficiently in the presence of multiple jammers. The hardware is UNCLASSIFIED.
4. The GPS Inertial Reference Unit (IRU) is a type of inertial sensor which uses only gyroscopes to determine a moving aircraft's change in angular direction over a period of time. Unlike the inertial measurement unit, IRUs are generally not equipped with accelerometers, which measure acceleration forces.
IRUs are used for altitude control and navigation of vehicles with relatively constant acceleration rates, such as larger aircraft as well as geosynchronous satellites and deep space probes. The GPS IRU is UNCLASSIFIED.
5. Crypto appliqué for Mode 5 Identification Friend or Foe (IFF), which includes hardware that is UNCLASSIFIED.
6. Software, hardware, and other data/information, which is sensitive, is reviewed prior to release to protect system vulnerabilities, design data, and performance parameters. Potential compromise of these systems is controlled through management of the basic software programs of highly sensitive systems and software-controlled weapon systems on a case-by-case basis.
7. Kuwait is both willing and able to protect United States Classified Military Information (CMI). Kuwaiti physical and document security standards are equivalent to U.S. standards. Kuwait has demonstrated its willingness and capability to protect sensitive military technology and information released to its military in the past. Kuwait is firmly committed to its relationship with the U.S. and to its promise to protect CMI and prevent its transfer to a third party. The Government of Kuwait signed a Technical Security Arrangement (TSA) with the USG on 01 January 1989 that commits them to the protection of CMI.
8. If a technologically advance adversary were to obtain knowledge of the specific hardware or software source code in this proposed sale, the information could be used to develop
9. All defense articles and services listed on this transmittal are authorized for release and export to the Government of Kuwait.
Defense Threat Reduction Agency (DTRA), DoD.
30-Day information collection notice.
The Department of Defense has submitted to OMB for clearance, the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by November 27, 2017.
Comments and recommendations on the proposed information collection should be emailed to Ms. Jasmeet Seehra, DoD Desk Officer, at
Fred Licari, 571-372-0493, or
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Written requests for copies of the information collection proposal should be sent to Mr. Licari at WHS/ESD Directives Division, 4800 Mark Center Drive, East Tower, Suite 03F09, Alexandria, VA 22350-3100.
Defense Security Cooperation Agency, Department of Defense.
Arms sales notice.
The Department of Defense is publishing the unclassified text of an arms sales notification.
Pamela Young, (703) 697-9107,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives, Transmittal 17-16 with attached Policy Justification and Sensitivity of Technology.
(i)
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Also includes transportation and other logistics support.
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*As defined in Section 47(6) of the Arms Export Control Act.
The Government of Kuwait has requested a possible sale of two hundred eighteen (218) M1A1 Abrams tank hulls with 120mm cannons and two hundred eighteen (218) AGT-1500 (M1 Tank Series) engines in support of its M1A2 tank recapitalization. Also included are transportation and other logistics support. The estimated cost is $29 million.
This proposed sale will contribute to the foreign policy and national security of the United States by helping to improve the security of a friendly country. Kuwait plays a large role in U.S. efforts to advance stability in the Middle East, providing basing, access, and transit for U.S. forces in the region.
This potential sale is associated with Congressional Notification 16-66 which was notified to Congress on December 12, 2016, regarding recapitalization of 218 Kuwait M1A2 tanks. Subsequent to the notification, Kuwait requested 218 M1A1 tank hulls from U.S. inventory be provided and upgraded vice using Kuwait's current fleet of tanks due to its interest in maintaining operational readiness. Kuwait will have no difficulty absorbing this equipment into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The M1A1 tank hulls will come from U.S. inventory. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to Kuwait.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. 120mm Gun. The gun is composed of a 120mm smoothbore gun (cannon) manufactured at Watervliet Arsenal; “long rod” Armor-piercing fin-stabilized discarding-sabot (APFSDS) warheads; and combustible cartridge case ammunition. There may be a need to procure/produce new gun cannon tubes from Watervliet Arsenal. New cannons inducted at Anniston Army Depot would be inspected according to established criteria and shipped to Lima Army Tank Plant for the tank upgrade process. The highest level of information that could be disclosed through the sale of this end-item is UNCLASSIFIED.
2. AGT-1500 Gas Turbine Propulsion System. The use of a gas turbine propulsion system in the M1A2 is a unique application of armored vehicle power pack technology. The hardware is composed of the AGT-1500 engine and transmission and is not classified. Manufacturing processes associated with the production of turbine blades, recuperator, bearings and shafts, and hydrostatic pump and motor are proprietary and therefore commercially competition sensitive. The highest level of information that could be disclosed through the sale of this end-item is UNCLASSIFIED.
3. All defense articles and services listed on this transmittal are authorized for release and export to the Government of Kuwait.
Washington Headquarters Service (WHS), Facilities Services Directorate (FSD), Enterprise Performance and IT Management Directorate (EPITMD), DoD.
30-Day information collection notice.
The Department of Defense has submitted to OMB for clearance, the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by November 27, 2017.
Comments and recommendations on the proposed information collection should be emailed to Ms. Jasmeet Seehra, DoD Desk Officer, at
Fred Licari, 571-372-0493, or
Below we provide projected average estimates for the next three years:
The solicitation of feedback will target areas such as: Timeliness, appropriateness, accuracy of information, courtesy, efficiency of service delivery, and resolution of issues with service delivery. Responses will be assessed to plan and inform efforts to improve or maintain the quality of service offered to the public. If this information is not collected, vital feedback from customers and stakeholders on the Agency's services will be unavailable.
The Agency will only submit a collection for approval under this generic clearance if it meets the following conditions:
• The collections are voluntary;
• The collections are low-burden for respondents (based on considerations of total burden hours, total number of respondents, or burden-hours per respondent) and are low-cost for both the respondents and the Federal Government;
• The collections are non-controversial and do not raise issues of concern to other Federal agencies;
• Any collection is targeted to the solicitation of opinions from respondents who have experience with the program or may have experience with the program in the near future;
• Personally identifiable information (PII) is collected only to the extent necessary and is not retained;
• Information gathered will be used only internally for general service improvement and program management purposes and is not intended for release outside of the agency;
• Information gathered will not be used for the purpose of substantially informing influential policy decisions; and
• Information gathered will yield qualitative information; the collections will not be designed or expected to yield statistically reliable results or used as though the results are generalizable to the population of study.
Feedback collected under this generic clearance provides useful information, but it does not yield data that can be generalized to the overall population. This type of generic clearance for qualitative information will not be used for quantitative information collections that are designed to yield reliably actionable results, such as monitoring trends over time or documenting program performance. Such data uses require more rigorous designs that address: The target population to which generalizations will be made, the sampling frame, the sample design (including stratification and clustering), the precision requirements or power calculations that justify the proposed sample size, the expected response rate, methods for assessing potential non-response bias, the protocols for data collection, and any testing procedures that were or will be undertaken prior to fielding the study. Depending on the degree of influence the results are likely to have, such collections may still be eligible for submission for other generic mechanisms that are designed to yield quantitative results.
As a general matter, information collections will not result in any new system of records containing privacy information and will not ask questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private.
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Written requests for copies of the information collection proposal should be sent to Mr. Licari at WHS/ESD Directives Division, 4800 Mark Center Drive, East Tower, Suite 03F09, Alexandria, VA 22350-3100.
Department of Education (ED), Office of Innovation and Improvement (OII).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing an extension of an existing information collection.
Interested persons are invited to submit comments on or before December 26, 2017.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Justis Tuia, 202-453-6654.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general
Office of Fossil Energy, Department of Energy.
Notice of orders.
The Office of Fossil Energy (FE) of the Department of Energy gives notice that during August 2017, it issued orders under section 3 of the Natural Gas Act, 15 U.S.C. 717b, as summarized in the attached appendix. These orders may be found on the FE Web site at
They are also available for inspection and copying in the U.S. Department of Energy (FE-34), Division of Natural Gas Regulation, Office of Regulation and International Engagement, Office of Fossil Energy, Docket Room 3E-033, Forrestal Building, 1000 Independence Avenue SW., Washington, DC 20585, (202) 586-9478. The Docket Room is open between the hours of 8:00 a.m. and 4:30 p.m., Monday through Friday, except Federal holidays.
U.S. Energy Information Administration (EIA), Department of Energy (DOE).
Notice.
EIA has submitted an information collection request to OMB for extension under the provisions of the Paperwork Reduction Act of 1995. The information collection requests a three-year extension with changes of its Natural Gas Data Collection Program, under OMB Control No. 1905-0175. The proposed collection will provide information on the supply and disposition of natural gas within the United States.
Comments regarding this information collection must be received on or before November 27, 2017. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, please advise the DOE Desk Officer at OMB of your intention to make a submission as soon as possible. The Desk Officer may be telephoned at 202-395-4718.
Written comments should be sent to Chad S. Whiteman, DOE Desk Officer, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10102, 735 17th Street NW., Washington, DC 20503,
Requests for additional information or copies of the information collection instrument and instructions should be directed to Michael Kopalek, 202-586-4001,
This information collection request contains:
(1) OMB Control Number 1905-0175;
(2) Information Collection Request Title: Natural Gas Data Collection Program;
The surveys covered by this information collection request include:
• Form EIA-176,
• Form EIA-191,
• Form EIA-757,
• Form EIA-857,
• Form EIA-910,
• Form EIA-912,
(3)
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Form EIA-176 collects data on natural, synthetic, and other supplemental gas supplies, their disposition, and certain revenues by state. The changes include:
a. Add a question in Part 3(B) to ask respondents if they have an alternative-fueled vehicle fleet and how many and what kind of vehicles make up the fleet. This information improves survey frame coverage and data accuracy reported on Form EIA-886,
b. A new section Part 3(E) asking local distribution companies to provide all the counties where they deliver natural gas for end-use consumption. This information enables EIA to estimate the approximate service territory for a local distribution company. EIA has received public inquiries about service territories associated with natural gas distributors and this information will be useful to EIA and the public for understanding this retail market sector.
c. Addition of a question in Part 3(F) asking respondents for the names and zip codes of any aboveground liquefied (LNG) natural gas storage facilities that
d. Discontinue collecting the costs associated with purchase gas received within the service area. EIA has the capability to estimate values for this activity using monthly data. Deleting this data element reduces respondent reporting burden and relieves EIA resources used to validate the information;
e. Discontinue the collection of year-end natural gas pump price in Part 3 Item B4. EIA determined that this question had large variation in data quality and inconsistent reporting methodologies.
f. Move Part 6 Line 12.4 (from the drop down menu selection) sub-item 9096, “Other Natural gas consumed in your operations: Vaporization/LNG Fuel,” to make it a standalone line item as new Line 12.4, called “Vaporization/Liquefaction/LNG Fuel.” The collection of “Other Natural Gas” consumed in operations that was previously listed on Line 12.4 will be shown as a new Line 12.6 in Part 6 with the three other drop down choices (Utilities Use, Other, and Other Expenses) available to the user. In the past, many respondents have missed reporting this data element. The change is designed to improve the coverage and accuracy of respondents reporting this information and will assist EIA in its modeling and analysis; and
g. Add a question in Part 6 Line 12.5, “Vehicle fuel used in company fleet” to collect information on fuel consumption by company vehicles. Based on cognitive testing of Form EIA-176 form, respondents were reporting natural gas vehicle fuel for their own company fleet as company use. This affects the accuracy of the vehicle fuel volumes and prices reported in Part 6 Items 10.5 and 11.5. Company consumption volumes do not have associated revenue and should not be included in 10.5 and 11.5. Adding this question gives respondents a place on Form EIA-176 to report company-owned vehicle fuel volumes and improve the accuracy of vehicle fuel prices based on Part 6 Items 10.5 and 11.5.
Form EIA-191 collects data on the operations of all active underground storage facilities. EIA is making the following changes to Form EIA-191:
a. Remove “Other” as a response option under “type of facility” question in Part 3 of the survey form. Respondents have not utilized this category for classifying their facilities. This open ended facility category did not provide its intended utility and as a result EIA is deleting it.
Form EIA-757 collects information on the capacity, status, and operations of natural gas processing plants, and monitors their constraints to natural gas supplies during catastrophic events, such as hurricanes. Schedule A of Form EIA-757 is used to collect data every three years. Schedule A collects baseline operating and capacity information from all respondents. Schedule A was used to collect information in 2015 and the next planned collection for Schedule A is 2018. Schedule B is activated as needed and collects data from a sample of respondents in affected areas as needed. Schedule B was last activated in 2012 when Hurricane Isaac damaged energy supply infrastructure along the Gulf Coast. A sample of approximately 20 plants reported in 2012 during that supply disruption. EIA is continuing the collection of the same data elements on Form EIA-757 Schedules A and B in their present form with two protocol changes:
a. Collect Schedule A data for new natural gas processing plants that opened and began operations during the current three-year data collection cycles. This minor protocol change allows EIA to maintain a current frame at all times rather than updating the survey frame every three years when a new data collection cycle begins;
b. Collect “processing throughput capacity” information in Schedule A on an annual basis. This allows EIA to track recent changes in natural gas processing plant capacities, a key piece of information needed for using Form EIA-757 Schedule B Emergency Activation portion of the survey during a natural disaster or similar crisis situation.
Form EIA-912 collects information on weekly inventories of natural gas in underground storage facilities. This is one change to Form EIA-912 to include an additional geographic data element for Inventory of Working Gas in Storage as described below:
a. Divide the “South Central” reporting region into “South Central Salt” and “South Central Nonsalt.” Currently EIA categorizes storage operators as either Salt facilities or Nonsalt facilities and allocates their volumes entirely to that region. This change would require respondents to allocate volumes in their reported data between Salt facilities and Nonsalt facilities in order to improve the accuracy of EIA's published estimates on underground storage. For example, under the current methodology, volumes reported by a respondent with majority salt storage would be allocated entirely to the “South Central Salt” region, even if nearly half of their volumes were stored in nonsalt facilities. Currently, operators with more than 15 billion cubic feet of storage capacity in the South Central region report volumes separately between Salt facilities or Nonsalt facilities. This change will require all operators in the reporting sample to report the same way.
(5)
EIA-176 consists of 2,050 respondents.
EIA-191 consists of 145 respondents.
EIA-757 Schedule A consists of 600 respondents.
EIA-757 Schedule B consists of 20 respondents.
EIA-857 consists of 330 respondents.
EIA-910 consists of 100 respondents.
EIA-912 consists of 95 respondents.
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In accordance with the National Environmental Policy Act of 1969 and the Federal Energy Regulatory Commission's (Commission) regulations, 18 CFR part 380 (Order No. 486, 52 FR 47897), the Office of Energy Projects has reviewed the applications for new licenses for the Hawks Nest Hydroelectric Project (FERC Project No. 2512-075) and the Glen Ferris Hydroelectric Project (FERC Project No. 14439-001) located in Fayette County, West Virginia, and has prepared a final Environmental Assessment (final EA) for the projects.
In the final EA, Commission staff analyzes the potential environmental effects of the projects, and concludes that relicensing the projects, with appropriate environmental protective measures, would not constitute a major federal action that would significantly affect the quality of the human environment.
A copy of the final EA is on file with the Commission and is available for public inspection. The final EA may also be viewed on the Commission's Web site at
You may also register online at
For further information, contact Monir Chowdhury at (202) 502-6736.
Take notice that on October 19, 2017, pursuant to section 292.402 of the Federal Energy Regulatory Commission's (Commission) Rules of Practices and Procedures 18 CFR 292.402 (2017), Cooperative Energy on behalf of itself and its eleven electric distribution cooperative members-owners (collectively, the Members),
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
The Commission encourages electronic submission of protests and interventions in lieu of paper using the eFiling link at
This filing is accessible on-line at
On November 14 and 15, 2017, Federal Energy Regulatory Commission (Commission) staff will host a series of public information sessions regarding the procedure for relicensing Grand River Dam Authority's (GRDA) Pensacola Hydroelectric Project No. 1494 (Pensacola Project). The project is located on the Grand (Neosho) River in Craig, Delaware, Mayes, and Ottawa Counties, Oklahoma.
a. Date, Time, and Location of Meetings:
b.
c.
d.
The staff of the Federal Energy Regulatory Commission (FERC or Commission) has prepared an environmental assessment (EA) for the East-West Project, proposed by Florida Gas Transmission, LLC (FGT) in the above-referenced docket. FGT requests authorization to construct and operate about 13.3 miles of 12-inch-diameter lateral pipeline, about 11.4 miles of 16-inch-diameter lateral and connection pipeline, and four new meter and regulation (M&R) stations and auxiliary and appurtenant facilities in Wharton, Matagorda, Jefferson, and Orange Counties, Texas, and Calcasieu and Acadia Parishes, Louisiana.
The EA assesses the potential environmental effects of the construction and operation of the East-West Project in accordance with the requirements of the National Environmental Policy Act (NEPA). The FERC staff concludes that approval of the proposed project, with appropriate mitigating measures, would not constitute a major federal action significantly affecting the quality of the human environment.
The proposed East-West Project includes the following facilities:
• About 13.3 miles of 12-inch-diameter delivery lateral pipe and M&R facilities (milepost 13.3) in Matagorda and Wharton counties, Texas;
• about 11.4 miles of 16-inch-diameter delivery lateral pipe and M&R facilities (milepost 11) in Jefferson County, Texas;
• about 0.5 mile of 16-inch-diameter connection piping and M&R facilities in Acadia Parish, Louisiana and 0.02 mile of 12-inch-diameter connection piping and M&R facilities in Calcasieu Parish, Louisiana; and
• modifications to station piping and installation of automated valves at Compressor Station (CS 6) in Orange County, Texas, so that CS 6 will be able to flow gas bi-directionally on the mainline.
The FERC staff mailed copies of the EA to federal, state, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American tribes; potentially affected landowners and other interested individuals and groups; and newspapers and libraries in the project area. In addition, the EA is available for public viewing on the FERC's Web site (
Any person wishing to comment on the EA may do so. Your comments should focus on the potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. The more specific your comments, the more useful they will be. To ensure that the Commission has the opportunity to consider your comments prior to making its decision on this project, it is important that we receive your comments in Washington, DC on or before November 20, 2017.
For your convenience, there are three methods you can use to file your comments to the Commission. In all instances, please reference the project docket number (CP17-8-000) with your submission. The Commission encourages electronic filing of comments and has expert staff available to assist you at (202) 502-8258 or
(1) You can file your comments electronically using the eComment feature on the Commission's Web site (
(2) You can also file your comments electronically using the eFiling feature on the Commission's Web site (
(3) You can file a paper copy of your comments by mailing them to the following address: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC 20426.
Any person seeking to become a party to the proceeding must file a motion to intervene pursuant to Rule 214 of the Commission's Rules of Practice and Procedures (18 CFR 385.214).
Additional information about the project is available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC Web site (
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. Go to
Environmental Protection Agency (EPA).
Notice.
EPA has received applications to register new uses for pesticide products containing currently registered active ingredients. Pursuant to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), EPA is hereby providing notice of receipt and opportunity to comment on these applications.
Comments must be received on or before November 27, 2017.
Submit your comments, identified by the Docket Identification (ID) Number and the File Symbol of interest as show in the body of this document, by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
Michael Goodis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
1.
2.
EPA has received applications to register new uses for pesticide products containing currently registered active ingredients. Pursuant to the provisions of FIFRA section 3(c)(4) (7 U.S.C. 136a(c)(4)), EPA is hereby providing notice of receipt and opportunity to comment on these applications. Notice of receipt of these applications does not imply a decision by the Agency on these applications.
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2.
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7 U.S.C. 136
Section 309(a) of the Clean Air Act requires that EPA make public its comments on EISs issued by other Federal agencies. EPA's comment letters on EISs are available at:
Revision to FR Notice Published 08/25/2017; U.S. Forest Service is reopening the comment period to end 11/27/2017.
Revision to FR Notice Published on 09/29/2017; Extending Comment Period from 11/13/2017 to 11/28/2017.
Revision to FR Notice Published on 10/06/2017; Extending Comment Period from 11/24/2017 to 02/05/2018.
Federal Labor Relations Authority (FLRA).
Notice of amendments to six existing systems of records; introduction of a new system of records; and rescindment of eleven systems of records.
The Privacy Act of 1974 requires that each agency publish notice of all the systems of records that it maintains. This document proposes the amendment of six of the FLRA's existing systems of records, the introduction of a new system of records, and the rescindment of eleven systems of records that are no longer in use or that are covered by government-wide system of records notices. With the proposed addition and rescindment of systems, the FLRA will maintain seven systems of records. Additional details are provided under Supplementary Information, below.
This action will be effective without further notice on November 27, 2017 unless comments are received that would result in contrary determinations.
Mail or deliver comments to Gina K. Grippando, Counsel for Regulatory and Public Affairs, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424; or email
Fred B. Jacob, Solicitor and Senior Agency Official for Privacy, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424; (202) 218-7999; fax: (202) 343-1007; or email
Pursuant to the Privacy Act of 1974, 5 U.S.C. 552a, the FLRA hereby publishes notice of updates to its systems of records.
1. In the first proposed amendment to a system of records, the FLRA proposes to amend FLRA/Internal-2-Appeal and Administrative Review Records by updating the system location and the organizational title and address of the system manager. The system is being updated further to reflect that information is maintained on electronic and paper media, and that electronic records are maintained in a password-protected automated system, with access limited to personnel whose duties require access. In addition, the system is being amended to reflect that burning is no longer a method of record disposal.
2. In the second proposed amendment to a system of records, the FLRA proposes to amend FLRA/Internal-3-Complaints and Inquiries Records by updating the system location and the organizational title and address of the system manager. The system is being updated further to reflect that information is maintained on electronic and paper media, and that electronic records are maintained in a password-protected automated system, with access limited to personnel whose duties require access. In addition, the system is being amended to reflect that burning is no longer a method of record disposal.
3. In the third proposed amendment to a system of records, the FLRA proposes to amend FLRA/Internal-6-Grievance Records by updating the system location and the organizational title and address of the system manager. The system is being updated further to reflect that information is maintained on electronic and paper media, and that electronic records are maintained in a password-protected automated system, with access limited to personnel whose duties require access. In addition, the system is being amended to: (1) Reflect that burning no longer is a method of
4. In the fourth proposed amendment to a system of records, the FLRA proposes to amend FLRA/Internal-10-Employee Locator Card Files by updating the system name to FLRA/Internal-10-Organization Management and Locator System, the system location, and the organizational title and address of the system manager. The system is being updated further to reflect that information is maintained on electronic media.
5. In the fifth amendment to a system of records, the FLRA proposes to amend FLRA/Internal-15-Pay, Leave and Travel Records by amending its name to FLRA/Internal-15-Personnel and Payroll System Records and removing all references to travel records, which FLRA no longer maintains. Rather, the FLRA's travel records are maintained in a system operated by a contractor and, therefore, are covered by a government-wide System of Records Notice: GSA/GOVT-4, Contracted Travel Services Program.
In addition, the FLRA proposes to amend this system of records to reflect updates to FLRA payroll and personnel data processes and services. The FLRA maintains FLRA/Internal-15-Personnel and Payroll System Records to manage payroll and personnel data for FLRA employees, ensure proper payment of salary and benefits to FLRA personnel, and track time worked and leave or other absences for reporting and compliance purposes. The FLRA has entered into an agreement with the Department of the Interior (DOI) Interior Business Center (IBC), a Federal agency shared service provider, to provide payroll and personnel processing services through DOI's Federal Personnel and Payroll System (FPPS). Although DOI will host and process payroll and personnel data on behalf of the FLRA, the FLRA will retain ownership and control over its own data. The FLRA has included a routine use in this notice to permit sharing of records with DOI for hosting and support services. Individuals seeking access to their records owned and maintained by the FLRA must submit their requests to the FLRA as outlined in the Record Access Procedures, Contesting Record Procedures, and Notification Procedures sections in the amended SORN.
6. In the sixth amendment to a system of records, the FLRA proposes to amend FLRA/OIG-1-Office of the Inspector General Investigative Files by updating the system location and the organizational title and address of the system manager. The system is being updated further to reflect that information is maintained on electronic media. In addition, the system is being amended to reflect that the FLRA obtained approval from NARA to modify the system's records-retention period such that only certain types of records must be retained permanently. Also, the contact for notification, record access, and contesting record procedures has been changed from the Office of the Solicitor to the Office of the Inspector General.
7. The new system of records is entitled FLRA/Internal-17-Freedom of Information Act Request and Appeal Files. This system contains records concerning the FLRA's Freedom of Information Act program.
8. The FLRA proposes to rescind eleven systems of records that are no longer in use by the FLRA or that are covered by government-wide system of records notices.
a. The first system of records, FLRA/Internal-1-Employee Occupational Health Program Records, is proposed for rescindment because the FLRA no longer collects or retains data on FLRA employees using health services under the Federal Employees Group Health Program. Instead, the Federal Occupational Health (FOH)/Department of Health and Human Services (HHS) is now the custodian of these records, and those records are covered under OPM/GOVT-10 Employee Medical File System Records.
b. The second system of records proposed for rescindment, FLRA/Internal-4-Applicants for Employment Records, is proposed for rescindment because those records are covered under OPM/GOVT-5 Recruiting, Examining, and Placement Records, and a separate FLRA System of Records would be duplicative.
c. The third system of records proposed for rescindment, FLRA/Internal-5-Preemployment Inquiry Records, is proposed for rescindment because those records are covered under OPM/GOVT-5 Recruiting, Examining, and Placement Records, and a separate FLRA System of Records would be duplicative.
d. The fourth system of records proposed for rescindment, FLRA/Internal-7-Employee Incentive Award and Recognition Files, is proposed for rescindment because those records are covered under OPM/GOVT-2 Employee Performance File System Records, and a separate FLRA System of Records would be duplicative.
e. The fifth system of records, FLRA/Internal-8-Employee Assistance Program Records, is proposed for rescindment because the FLRA no longer collects or retains data on FLRA employees using Employee Assistance Program (EAP) services. Instead, FOH/HHS is the custodian of these records, and it has published HHS System of Records Notice, 09-90-0010, EAP Records, which covers Federal employees and their family members using EAP through contractual agreement between HHS and their organizations.
f. The sixth system of records, FLRA/Internal-9-Federal Executive Development Program Records, is proposed for rescindment because the FLRA no longer runs a Federal Executive Development Program and, if it did run such a program in the future, the FLRA would retain such records under OPM/GOVT-1 General Personnel Records.
g. The seventh system of records proposed for rescindment, FLRA/Internal-11-Training Records, is proposed for rescindment because those records are covered under OPM/GOVT-1 General Personnel Records, and a separate FLRA System of Records would be duplicative.
h. The eighth system of records proposed for rescindment, FLRA/Internal-12-Performance Evaluation/Rating Records, is proposed for rescindment because the FLRA retains such records under OPM/GOVT-2 Employee Performance File System Records, and a separate FLRA System of Records would be duplicative.
i. The ninth system of records proposed for rescindment, FLRA/Internal-13-Intern Program and Upward Mobility Program Records, contains intern recruiting information pertaining to the internship program covered under OPM/GOVT-5 Recruiting, Examining, and Placement Records, and a separate FLRA System of Records would be duplicative. The FLRA no longer runs an Upward Mobility Program or retains records of such a program.
j. The tenth system of records, FLRA/Internal-14-Motor Vehicle Accident Reports, is proposed for rescindment because the FLRA no longer possesses any such records. Records previously maintained under this system have been destroyed.
k. The eleventh system of records, FLRA/Internal-16-Occupational Injury and Illness Records, is proposed for rescindment because the FLRA retains such records under DOL/GOVT-1 Office of Worker's Compensation Programs, Federal Employees' Compensation Act
The public, the Office of Management and Budget (OMB), and the Congress are invited to submit written comments on the new system of records, the proposed amendments to the six existing systems of records, and the proposed rescindment of the eleven systems of records. A report on the proposed amendments, additions, and rescindments to the FLRA's systems of records has been provided to OMB and Congress as required by OMB Circular A-108, and 5 U.S.C. 552a(r).
Unclassified.
Human Resources Division, Federal Labor Relations Authority (FLRA), 1400 K Street NW., Washington, DC 20424.
Director, Human Resources Division, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
5 U.S.C. 1302, 3301, 3302, 4305, 5115, 5335, 7501, 7512; and Executive Order 10577.
These records are used to process miscellaneous appeals and administrative reviews submitted by FLRA employees.
Current and former FLRA employees.
This system contains records relating to various internal appeal or administrative reviews submitted by FLRA employees as well as decisions made in individual employee cases pursuant to those procedures. The system also contains records and documentation of the action upon which the appeal or review decision was based.
Information in this system of records is provided by:
a. The individual to whom the records pertain.
b. FLRA officials involved in the appeal or administrative procedure.
c. Other official personnel records of the FLRA.
In addition to the disclosure generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, these records or information in these records may be used pursuant to 5 U.S.C. 552a(b)(3):
a. To disclose pertinent information to the appropriate Federal, State, or local agency responsible for investigating, prosecuting, enforcing, or implementing a statute, rule, regulation, or order, when the FLRA becomes aware of an indication of a violation or potential violation of civil or criminal law or regulation.
b. To disclose information to any source from whom additional information is requested in the course of processing an appeal or administrative review procedure, to the extent necessary to identify the individual, inform the source of the purpose(s) of the request, and identify the type of information requested.
c. To disclose information to a Federal agency, in response to its request, in connection with the hiring or retention of an employee, the issuance of a security clearance, a security or suitability investigation of an individual, the classifying of jobs, the letting of a contract, or the issuance of a license, grant, or other benefit by the requesting agency, to the extent that the information is relevant and necessary to the requesting agency's decision on the matter.
d. To provide information to a congressional office from the record of an individual in response to an inquiry from that congressional office made at the request of that individual.
e. In an appropriate proceeding before a court, grand jury, or administrative or adjudicative body, when the FLRA determines that the records are arguably relevant to the proceeding, or in an appropriate proceeding before an administrative or adjudicative body when the adjudicator determines the records to be relevant to the proceeding.
f. To disclose information to the National Archives and Records Administration in records management inspections conducted under authority of 44 U.S.C. 2904 and 2906.
g. To disclose information to the Office of Personnel Management in the production of summary descriptive statistics and analytical studies in support of the function for which the records are collected and maintained, or for related work-force studies. While published statistics and studies do not contain individual identifiers, in some instances, the selection of elements of data included in the study may be structured in such a way as to make the data individually identifiable by inference.
h. To disclose, in response to a request for discovery or for appearance of a witness, information that is relevant to the subject matter involved in a pending judicial or administrative proceeding.
i. To disclose information to officials of: The Merit Systems Protection Board, the Office of Special Counsel, or the Equal Employment Opportunity Commission, when requested in performance of their authorized duties.
j. To appropriate agencies, entities, and persons when (1) the FLRA suspects or has confirmed that there has been a breach of the system of records; (2) the FLRA has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, the FLRA (including its information systems, programs, and operations), the Federal Government, or national security; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the FLRA's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
k. To another Federal agency or Federal entity, when the FLRA determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (1) responding to a suspected or confirmed breach or (2) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
l. To contractors, grantees, experts, consultants, students, and others performing or working on a contract, service, grant, cooperative agreement, or other assignment for the federal government, when necessary to accomplish an agency function related to this system of records.
m. To such recipients and under such circumstances and procedures as are mandated by federal statute or treaty.
These records are maintained on paper and electronic media.
These records are retrieved by the names of the individuals on whom they are maintained.
Adverse action appeals processed under the FLRA's internal appeals systems are retained for seven years after the closing of the case and other records in the system are maintained for a maximum of four years after the closing of the case, in accordance with items 10-12, of General Records Schedule 1, as approved by the Archivist of the United States. Disposal is by shredding.
These records are maintained in a lockable filing system and/or in a password-protected automated system, with access limited to personnel whose duties require access.
Individuals involved in appeals and administrative review procedures are aware of that fact and have been provided access to the record. However, after the action has been closed, an individual may request access to the official copy of an appeal or administrative review procedure record by contacting the System Manager. Individuals must provide the following information for their records to be located and identified:
a. Full Name.
b. Date of birth.
c. Approximate date of closing of case and kind of action taken.
Individuals requesting access must also follow the FLRA's Privacy Act regulations regarding access to records (5 CFR 2412.5).
Review of requests from individuals seeking amendment of their records that have previously been or could have been the subject of a judicial or quasi-judicial action will be limited in scope. Review of amendment requests of these cases will be restricted to determining whether the record accurately documents the action of the agency or administrative body ruling on the case, and it will not include a review of the merits of the action, determination, or finding.
Individuals wishing to request amendment of their records to correct factual errors should contact the System Manager. Individuals must furnish the following information for their records to be located and identified;
a. Full Name.
b. Date of birth.
c. Approximate date of closing of the case and kind of action taken.
Individuals requesting amendment must also follow the FLRA's Privacy Act regulations regarding amendment of records (5 CFR 2412.10).
Individuals involved in appeals and administrative review procedures are aware of that fact and have been provided access to the record. They may, however, contact the System Manager indicated above. They must furnish the following information for their records to be located and identified:
a. Full Name.
b. Date of birth.
c. Approximate date of closing of the case and kind of action taken.
Individuals making inquiries must comply with the FLRA's Privacy Act regulations regarding the existence of records (5 CFR 2412.4).
None.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980).
Unclassified.
Office of the Executive Director, Federal Labor Relations Authority (FLRA), 1400 K Street NW., Washington, DC 20424.
Executive Director, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
Executive Order 11222.
These records are used to take an action on or respond to a complaint or inquiry concerning an FLRA employee or to counsel the employee.
Current FLRA employees about whom complaints or inquiries have been received.
This system contains information or correspondence concerning an individual's employment status or conduct while employed by the FLRA. Examples of these records include: Correspondence from Federal employees, Members of Congress, or members of the public alleging misconduct by an FLRA employee; miscellaneous debt correspondence received from creditors; and miscellaneous complaints not covered by the FLRA's formal or informal grievance procedures.
Information in this system of records is provided by:
a. The individual to whom the information pertains.
b. Federal employees, Members of Congress, creditors, or members of the public who submitted the complaint or inquiry.
c. FLRA officials.
d. Other sources from whom information was requested regarding the complaint or inquiry.
In addition to the disclosure generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, these records or information in these records may be used pursuant to 5 U.S.C. 552a(b)(3):
a. To disclose pertinent information to the appropriate Federal, State, or local agency responsible for investigating, prosecuting, enforcing, or implementing a statute, rule, regulation, or order, when the FLRA becomes aware of an indication of a violation or potential violation of civil or criminal law or regulation.
b. To disclose information to any source from whom additional information is requested (to the extent necessary to identify the individual, inform the source of the purpose of the request, and identify the type of information requested), where necessary to obtain information relevant to an FLRA decision concerning the hiring or retention of an employee, the issuance of a security clearance, conduct of a security or suitability investigation of an individual or classification of jobs.
c. To provide information to a congressional office from the record of an individual in response to an inquiry from that congressional office made at the request of that individual.
d. In an appropriate proceeding before a court, grand jury, or administrative or adjudicative body, when the FLRA determines that the records are arguably relevant to the proceeding, or in an appropriate proceeding before an administrative or adjudicative body
e. To disclose information to the National Archives and Records Administration in records management inspections conducted under authority of 44 U.S.C. 2904 and 2906.
f. To disclose in response to a request for discovery or for appearance of a witness, information that is relevant to the subject matter involved in a pending judicial or administrative proceeding.
g. To disclose information to officials of: The Merit Systems Protection Board, the Office of Special Counsel, or the Equal Employment Opportunity Commission, when requested in performances of their authorized duties.
h. To appropriate agencies, entities, and persons when (1) the FLRA suspects or has confirmed that there has been a breach of the system of records; (2) the FLRA has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, the FLRA (including its information systems, programs, and operations), the Federal Government, or national security; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the FLRA's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
i. To another Federal agency or Federal entity, when the FLRA determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (1) responding to a suspected or confirmed breach or (2) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
j. To contractors, grantees, experts, consultants, students, and others performing or working on a contract, service, grant, cooperative agreement, or other assignment for the federal government, when necessary to accomplish an agency function related to this system of records.
k. To such recipients and under such circumstances and procedures as are mandated by federal statute or treaty.
These records are maintained in file folders that are separate from the employee's Official Personnel Folder and also in electronic media.
These records are retrieved by the name of the individual on whom they are maintained.
These records are disposed of upon the transfer or separation of the employee or after one year, whichever is earlier, in accordance with item 010 of General Records Schedule 6.5, as approved by the Archivist of the United States. Disposal is by shredding.
These records are located in a lockable filing system and/or a password-protected automated system, with access limited to personnel whose official duties require access.
FLRA employees wishing to request access to their records should contact the System Manager. Individuals must furnish the following information for their records to be located and identified:
a. Full Name.
b. Date of birth.
Individuals requesting access must also comply with the FLRA's Privacy Act regulations regarding access to records (5 CFR 2412.5).
FLRA employees wishing to request amendment of their records should contact the System Manager. Individuals must furnish the following information for their records to be located and identified:
a. Full Name.
b. Date of birth.
Individuals must also comply with the FLRA's Privacy Act regulations regarding amendment of records (5 CFR 2412.10).
FLRA employees wishing to inquire whether this system contains information about them should contact the System Manager. Individuals must furnish the following information for their records to be located and identified:
a. Full Name.
b. Date of birth.
Individuals making inquiries must comply with the FLRA's Privacy Act regulations regarding the existence of records (5 CFR 2412.4).
None.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980)
Not applicable.
Office of the Executive Director, Federal Labor Relations Authority (FLRA), 1400 K Street NW., Washington, DC 20424.
Executive Director, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
5 U.S.C. 1302, 3301, and 3302.
These records are used to store and document grievances based on employee dissatisfaction relative to actions taken within the discretion of the FLRA.
Current or former Federal employees who have submitted grievances with the FLRA pursuant to Office of Personnel Management regulations regarding Agency Administrative Grievance Systems (5 CFR part 771).
The system contains records relating to grievances filed by agency employees under 5 CFR part 771 and the FLRA's internal regulations. These case files contain all documents related to the grievance, including statements of witnesses, reports of interviews and hearings, examiner's findings and recommendations, a copy of the original decision, and related correspondence and exhibits. This system includes files and records of internal grievances, and of arbitration systems that may be established through negotiations with the union representing agency employees.
Information in this system of records is provided by:
a. The individual on whom the record is maintained.
b. Testimony of witnesses.
c. Agency officials.
d. Organizations or persons providing related correspondence.
In addition to the disclosure generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, these records or information in these records may be used pursuant to 5 U.S.C. 552a(b)(3):
a. To disclose pertinent information to the appropriate Federal, State, or local agency responsible for investigating, prosecuting, enforcing, or implementing a statute, rule, regulation, or order, where the FLRA becomes aware of an indication of a violation or potential violation of civil or criminal law or regulation.
b. To disclose information to any source from whom additional information is requested in the course of processing a grievance, to the extent necessary to identify the individual, inform the source of the purpose(s) of the request, and identify the type of information requested.
c. To disclose information to a Federal agency, in response to its request, in connection with the hiring or retention of an employee, the issuance of a security clearance, the conducting of a security or suitability investigation of an individual, the classifying of jobs, the letting of a contract, or the issuance of a license, grant, or other benefit by the requesting agency, to the extent that the information is relevant and necessary to requesting the agency's decision on the matter.
d. To provide information to a congressional office from the record of an individual in response to an inquiry from that congressional office made at the request of that individual.
e. In an appropriate proceeding before a court, grand jury, or administrative or adjudicative body, when the FLRA determines that the records are arguably relevant to the proceeding, or in an appropriate proceeding before an administrative or adjudicative body when the adjudicator determines the records to be relevant to the proceeding.
f. To disclose information to the National Archives and Records Administration in records management inspections conducted under authority of 44 U.S.C. 2904 and 2906.
g. To disclose information to officials of: The Merit Systems Protection Board, the Office of Special Counsel, or the Equal Employment Opportunity Commission, when requested in performance of their authorized duties.
h. To disclose, in response to a request for discovery or for appearance of a witness, information that is relevant to the subject matter involved in a pending judicial or administrative proceeding.
i. To provide information to officials of labor organizations recognized under the Civil Service Reform Act, when relevant and necessary to their duties of exclusive representation concerning personnel policies, practices, and matters affecting work conditions.
j. To appropriate agencies, entities, and persons when (1) the FLRA suspects or has confirmed that there has been a breach of the system of records; (2) the FLRA has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, the FLRA (including its information systems, programs, and operations), the Federal Government, or national security; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the FLRA's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
k. To another Federal agency or Federal entity, when the FLRA determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (1) responding to a suspected or confirmed breach or (2) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
l. To contractors, grantees, experts, consultants, students, and others performing or working on a contract, service, grant, cooperative agreement, or other assignment for the federal government, when necessary to accomplish an agency function related to this system of records.
m. To such recipients and under such circumstances and procedures as are mandated by federal statute or treaty.
These records are maintained on paper and electronic media.
These records are retrieved by the names of the individuals on whom they are maintained.
These records are disposed of four-to-seven years after closing of the case, in accordance with item 60 of General Records Schedule 2.3, as approved by the Archivist of the United States. Disposal is by shredding.
These records are maintained in a lockable filing system and in a password-protected automated system, with access limited to personnel whose official duties require access.
Individuals submitting grievances must be provided a copy of the record under the grievance process. However, after the action has been closed, an individual may request access to the official copy of the grievance file by contacting the System Manager. Individuals must provide the following information for their records to be located and identified:
a. Full Name.
b. Date of birth.
c. Approximate date of closing of the case and kind of action taken.
d. Organizational component involved.
Individuals requesting access must also follow the FLRA's Privacy Act regulations regarding access to records (5 CFR 2412.5).
Review of requests from individuals seeking amendment of their records that have been the subject of a judicial or quasi-judicial action will be limited in scope. Review of amendment requests of these records will be restricted to determining whether the record accurately documents the action of the agency ruling on the case, and it will not include a review of the merits of the action, determination, or finding. Individuals wishing to request amendment to their records of correct factual errors should contact the System Manager. They must provide the following information for their records to be located and identified:
a. Full Name.
b. Date of birth.
c. Approximate date of closing of the case and kind of action taken.
d. Organizational component involved.
Individuals requesting amendment must follow the FLRA's Privacy Act regulations regarding amendment to records (5 CFR 2412.10).
Individuals submitting grievances must be provided a copy of the record under the grievance process. They may, however, contact the System Manager. They must furnish the following information for their records to be located and identified:
a. Full Name.
b. Date of birth.
c. Approximate date of closing of the case and kind of action taken.
d. Organizational component involved.
Individuals making inquiries must comply with the FLRA's Privacy Act regulations regarding the existence of records (5 CFR 2412.4).
None.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980)
Not applicable.
Administrative Services Division, Federal Labor Relations Authority (FLRA), 1400 K Street NW. Washington, DC 20424.
Director, Administrative Services Division, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
5 U.S.C. 301 and 44 U.S.C. 3101 and 3301.
Information is collected for this system for use in preparing telephone directories of the office telephone extensions of FLRA employees. The records also serve to identify contact information for an employee for continuity of operations purposes, or if an emergency of a medical or other nature involving the employee occurs while the employee is on the job. These records may also be used to locate individuals for personnel research.
Employees of the FLRA.
This system contains information regarding the organizational location, telephone extension, and office email address of individual FLRA employees. The system also contains the home address, email, and telephone numbers of the employee.
Information in this system of records is provided by the individual who is the subject of the record.
In addition to the disclosure generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, these records or information in these records may be used pursuant to 5 U.S.C. 552a(b)(3):
a. To provide information to a congressional office from the record of an individual in response to an inquiry from that congressional office made at the request of that individual.
b. In an appropriate proceeding before a court, grand jury, or administrative or adjudicative body, when the FLRA determines that the records are arguably relevant to the proceeding, or in an appropriate proceeding before an administrative or adjudicative body when the adjudicator determines the records to be relevant to the proceeding.
c. To disclose, in response to a request for discovery or for appearance of a witness, information that is relevant to the subject matter involved in a pending judicial or administrative proceeding.
d. To appropriate agencies, entities, and persons when (1) the FLRA suspects or has confirmed that there has been a breach of the system of records; (2) the FLRA has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, the FLRA (including its information systems, programs, and operations), the Federal Government, or national security; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the FLRA's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
e. To another Federal agency or Federal entity, when the FLRA determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (1) responding to a suspected or confirmed breach or (2) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
f. To contractors, grantees, experts, consultants, students, and others performing or working on a contract, service, grant, cooperative agreement, or other assignment for the federal government, when necessary to accomplish an agency function related to this system of records.
g. To such recipients and under such circumstances and procedures as are mandated by federal statute or treaty.
These records are maintained on electronic media.
These records are retrieved by the name of the individual on whom they are maintained.
These records are maintained as long as the individual is an employee of the FLRA, in accordance with item 20 of General Records Schedule 5.3, as approved by the Archivist of the United States. Expired records are destroyed by deletion of all electronic records.
Home addresses, emails, and contact information for employees are maintained in a password-protected system, with access limited to personnel whose duties require access.
FLRA employees wishing to request access to records about them should contact the System Manager. Individuals must supply their full name for their records to be located and identified.
Individuals requesting access must comply with the FLRA's Privacy Act regulations regarding access to records (5 CFR 2412.5).
FLRA employees may amend information in these records at any time by resubmitting updated information to the System Manager. Individuals wishing to request amendment of their records under the provisions of the Privacy Act should contact the System Manger. Individuals must supply their full name for their records to be located and identified.
Individuals requesting amendment must follow the FLRA's Privacy Act regulations regarding amendment of records (5 CFR 2412.10).
FLRA employees wishing to inquire whether this system contains information about them should contact the System Manager. Individuals must supply their full name for their records to be located and identified.
Individuals making inquiries must comply with the FLRA's Privacy Act regulations regarding the existence of records (5 CFR 2412.4).
None.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980)
Not applicable.
FLRA/Internal-15-Personnel and Payroll System Records is centrally managed by the Human Resources Division, Federal Labor Relations Authority (FLRA), 1400 K Street NW., Washington, DC 20424. The FLRA has entered into an agreement with the Department of the Interior (DOI) Interior Business Center (IBC), a Federal agency shared service provider, to provide payroll and personnel processing services through DOI's Federal Personnel and Payroll System (FPPS). Electronic payroll and personnel records processed through FPPS are located at the U.S. Department of the Interior, Interior Business Center, Human Resources and Payroll Services, 7301 W. Mansfield Ave., MS D-2000, Denver, CO 80235.
The FLRA's Director, Human Resources Division, Federal Labor Relations Authority, 1400 K Street, NW., Washington, DC 20424, manages the FLRA's FPPS account.
36 U.S.C. 2102; 5 U.S.C. Chapter 55; 5 CFR part 293; and Executive Order 9397 as amended by Executive Order 13478, relating to Federal agency use of Social Security numbers.
The purpose of the system is to allow the FLRA to collect and maintain records on current and former employees to ensure proper payment for salary and benefits, and to track time worked, leave, or other absences for reporting and compliance purposes.
The system maintains records concerning current and former FLRA employees, including volunteers and emergency employees, and limited information regarding employee spouses, dependents, emergency contacts, or in the case of an estate, a trustee who meets the definition of “individual” as that term is defined in the Privacy Act.
This system maintains records including:
• Employee biographical and employment information: Employee name, other names used, citizenship, gender, date of birth, group affiliation, marital status, Social Security number (SSN), truncated SSN, legal status, place of birth, records related to position, occupation, duty location, security clearance, financial information, medical information, disability information, education information, driver's license, race/ethnicity, personal telephone number, personal email address, military status/service, mailing/home address, Taxpayer Identification Number, bank account information, professional licensing and credentials, family relationships, age, involuntary debt (garnishments or child support payments), employee common identifier (ECI), user identification and any other employment information.
• Third-party information: Spouse information, emergency contact, beneficiary information, savings bond co-owner name(s) and information, family members and dependents information.
• Salary and benefits information: Salary data, retirement data, tax data, deductions, health benefits, allowances, union dues, insurance data, Flexible Spending Account, Thrift Savings Plan contributions, pay plan, payroll records, awards, court order information, back pay information, debts owed to the government as a result of overpayment, refunds owed, or a debt referred for collection on a transferred employee or emergency worker.
• Timekeeping information: Time and attendance records, leave records, the system may also maintain records including other information required to administer payroll, leave, and related functions.
Information is obtained from individuals on whom the records are maintained, official personnel records of individuals on whom the records are maintained, supervisors, timekeepers, previous employers, the Internal Revenue Service and state tax agencies, the Department of the Treasury, other Federal agencies, courts, state child support agencies, employing agency accounting offices, and third-party benefit providers.
In addition to those disclosures generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, all or a portion of the records or information maintained in this system may be disclosed to authorized entities outside FLRA for purposes determined to be relevant and necessary as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
a. To the Department of Justice (DOJ), including Offices of the U.S. Attorneys, or other Federal agencies conducting litigation or in proceedings before any court, adjudicative, or administrative body, when it is relevant or necessary to the litigation and one of the following is a party to the litigation or has an interest in such litigation:
(1) The FLRA;
(2) Any employee or former employee of FLRA in his or her official capacity;
(3) Any employee or former employee of FLRA in his or her individual capacity when DOJ or the FLRA has agreed to represent the employee; or
(4) The U.S. Government or any agency thereof.
b. To a congressional office in response to a written inquiry that an individual covered by the system, or the heir of such individual if the covered individual is deceased, has made to the office.
c. To the Office of Management and Budget (OMB) during the coordination and clearance process in connection with legislative affairs as mandated by OMB Circular A-19.
d. To other Federal agencies that provide payroll and personnel processing services under a cross-servicing agreement for purposes relating to FLRA employee payroll and personnel processing.
e. To another Federal agency as required for payroll purposes, including to the Department of the Treasury for preparation of payroll and to issue checks and electronic funds transfer.
f. To the Office of Personnel Management, the Merit Systems Protection Board, or the Equal Employment Opportunity Commission when requested in the performance of their authorized duties.
g. To appropriate Federal and state agencies to provide reports including data on unemployment insurance.
h. To State offices of unemployment compensation to assist in processing an individual's unemployment, survivor annuity, or health benefit claim, or for records reconciliation purposes.
i. To Federal employees' Group Life Insurance or Health Benefits carriers in connection with survivor annuity or health benefits claims or records reconciliations.
j. To the Internal Revenue Service and State and local tax authorities for which
k. To the Internal Revenue Service or to another Federal agency or its contractor to disclose debtor information solely to aggregate information for the Internal Revenue Service to collect debts owed to the Federal government through the offset of tax refunds.
l. To any creditor Federal agency seeking assistance for the purpose of that agency implementing administrative or salary offset procedures in the collection of unpaid financial obligations owed the United States Government from an individual.
m. To any Federal agency where the individual debtor is employed or receiving some form of remuneration for the purpose of enabling that agency to collect debts on the employee's behalf by administrative or salary offset procedures under the provisions of the Debt Collection Act of 1982.
n. To the Internal Revenue Service, and state and local authorities for the purposes of locating a debtor to collect a claim against the debtor.
o. To any source from which additional information is requested by the FLRA relevant to an FLRA determination concerning an individual's pay, leave, or travel expenses, to the extent necessary to identify the individual, inform the source of the purpose(s) of the request, and to identify the type of information requested.
p. To the Social Security Administration and the Department of the Treasury to disclose pay data on an annual basis.
q. To the Social Security Administration to credit the employee or emergency worker account for Old-Age, Survivors, and Disability Insurance (OASDI) and Medicare deductions.
r. To the Federal Retirement Thrift Investment Board's record keeper, which administers the Thrift Savings Plan, to report deductions, contributions, and loan payments.
s. To a Federal agency or in response to a congressional inquiry when additional or statistical information is requested relevant to the FLRA Transit Fare Subsidy Program.
t. To the Department of Health and Human Services for the purpose of providing information on new hires and quarterly wages as required under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.
u. To the Office of Child Support Enforcement, Administration for Children and Families, Department of Health and Human Services for the purposes of locating individuals to establish paternity; establishing and modifying orders of child support; identifying sources of income; and for other child support enforcement actions as required by the Personal Responsibility and Work Opportunity Reconciliation Act (Welfare Reform Law, Pub. L. 104-193).
v. To the Office of Personnel Management or its contractors in connection with programs administered by that office, including, but not limited to, the Federal Long Term Care Insurance Program, the Federal Dental and Vision Insurance Program, the Flexible Spending Accounts for Federal Employees Program, and the electronic Human Resources Information Program.
w. To charitable institutions, when an employee designates an institution to receive contributions through salary deduction.
x. To any criminal, civil, or regulatory law enforcement authority (whether Federal, state, territorial, local, tribal or foreign) when a record, either alone or in conjunction with other information, indicates a violation or potential violation of law—criminal, civil, or regulatory in nature.
y. To the National Archives and Records Administration (NARA) to conduct records management inspections under the authority of 44 U.S.C. 2904 and 2906.
z. To an expert, consultant, grantee, or contractor (including employees of the contractor) of the FLRA that performs services requiring access to these records on the FLRA's behalf to carry out the purposes of the system, including employment verifications, unemployment claims, and W-2 services.
aa. To the Department of Labor for processing claims for employees, emergency workers, or volunteers injured on the job or claiming occupational illness.
bb. To appropriate agencies, entities, and persons when:
(1) The FLRA suspects or has confirmed that there has been a breach of the system of records;
(2) The FLRA has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, the FLRA (including its information systems, programs, and operations), the Federal Government, or national security; and
(3) The disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the FLRA's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
cc. To another Federal agency or Federal entity, when the FLRA determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in:
(1) Responding to a suspected or confirmed breach; or
(2) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
dd. To another Federal agency to provide information needed in the performance of official duties related to reconciling or reconstructing data files or to enable that agency to respond to an inquiry by the individual to whom the record pertains.
ee. To Federal, state, territorial, local, tribal, or foreign agencies that have requested information relevant or necessary to the hiring, firing or retention of an employee or contractor, or to the issuance of a security clearance, license, contract, grant or other benefit.
ff. To an agency or organization for the purpose of performing audit or oversight operations as authorized by law, but only such information as is necessary and relevant to such audit or oversight function.
gg. In an appropriate proceeding before a court, grand jury, or administrative or adjudicative body, when the FLRA determines that the records are arguably relevant to the proceeding, or in an appropriate proceeding before an administrative or adjudicative body when the adjudicator determines the records to be relevant to the proceeding.
hh. To the news media and the public, with the approval of the Agency Privacy Officer in consultation with counsel, when there exists a legitimate public interest in the disclosure of the information or when disclosure is necessary to preserve confidence in the integrity of the FLRA or is necessary to demonstrate the accountability of the FLRA's officers, employees, or individuals covered by the system, except to the extent it is determined that release of the specific information in the context of a particular case would constitute an unwarranted invasion of personal privacy.
Paper records are maintained in file folders stored within locking filing cabinets or locked rooms in secured facilities with controlled access. Electronic records are stored in computers, removable drives, storage devices, electronic databases, and other electronic media under the control of the FLRA, and in other Federal agency systems pursuant to interagency sharing agreements.
Records may be retrieved by name, SSN, ECI, birth date, organizational code, or other assigned person.
Records are maintained in accordance with General Records Schedule (GRS) 1.0 “Finance”, and GRS 2.0 “Human Resources,” which are approved by the National Archives and Records Administration. The system generally maintains temporary records, and retention periods vary based on the type of record under each item and the needs of the agency. Paper records are disposed of by shredding, and records maintained on electronic media are degaussed or erased in accordance with the applicable records retention schedule and NARA guidelines.
The records maintained in this system are safeguarded in accordance with FLRA security and privacy rules and policies. During normal hours of operations, paper records are maintained in locked files cabinets under the control of authorized personnel. Information technology systems follow the National Institute of Standards and Technology privacy and security standards developed to comply with the Privacy Act of 1974 as amended, 5 U.S.C. 552a; the Paperwork Reduction Act of 1995, Public Law 104-13; the Federal Information Security Modernization Act of 2014, Public Law 113-283, as codified at 44 U.S.C. 3551
Individuals wishing access to records about them should contact the System Manager. Individuals must furnish the following information for their records to be located and identified:
a. Full name.
b. Date of birth.Individuals requesting access must comply with the FLRA's Privacy Act regulations regarding access to records (5 CFR 2412.5).
Individuals wishing to request amendment of records about them should contact the System Manager. Individuals must furnish the following information for their records to be located and identified:
a. Full name.
b. Date of birth.Individuals requesting amendment must follow the FLRA's Privacy Act regulations regarding amendment of records (5 CFR 2412.10).
Individuals wishing to determine whether this system of records contains information about them should contact the System Manager. Individuals must furnish the following for their records to be located and identified:
a. Full name.
b. Date of birth.Individuals making inquiries must comply with the FLRA's Privacy Act regulations regarding the existence of records (5 CFR 2412.4).
None.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980); 63 FR 1110 (Jan. 8, 1998).
Unclassified.
Office of Inspector General (OIG), Federal Labor Relations Authority, 1400 K Street, NW., Washington, DC 20424.
Inspector General, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
The Inspector General Act of 1978, as amended, 5 U.S.C. Appendix 3.
These records are maintained to fulfill the purposes of the Inspector General Act of 1978, as amended and to fulfill responsibilities assigned by that Act concerning investigative activities.
Subjects of OIG investigations relating to the programs and operations of the FLRA. Subject individuals include, but are not limited to, current and former employees; contractors, subcontractors, their agents or employees; and others whose actions affect the FLRA, its programs, and operations.
Correspondence relating to the investigation; internal staff memoranda; copies of subpoenas issued during the investigation, affidavits, statements from witnesses, transcripts of testimony taken in the investigation and accompanying exhibits; documents, records, or copies obtained during the investigation; interview notes, investigative notes, staff working papers, draft materials, and other documents and records relating to the investigation; opening reports, progress reports, and closing reports; and other investigatory information or data relating to alleged or suspected criminal, civil, or administrative violations or similar wrongdoing by subject individuals.
Employees or other individuals on whom the record is maintained, non-target witnesses, FLRA and non-FLRA records.
In addition to the disclosure generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, these records or information in these records may be used pursuant to 5 U.S.C. 552a(b)(3):
a. To other agencies, offices, establishments, and authorities, whether Federal, State, local, foreign, or self-regulatory (including, but not limited to, organizations such as professional associations or licensing boards), authorized or with the responsibility to investigate, litigate, prosecute, enforce, or implement a statute, rule, regulation, or order, where the record or information, by itself or in connection with other records or information,
(1) Indicates a violation or potential violation of law, whether criminal, civil, administrative, or regulatory in nature, and whether arising by general statute or particular program statute, or by regulation, rule or order issued pursuant thereto, or;
(2) Indicates a violation or potential violation of a professional, licensing, or similar regulation, rule or order, or otherwise reflects on the qualifications or fitness of an individual licensed or seeking to be licensed.
b. To any source, private or governmental, to the extent necessary to secure from such source information relevant to and sought in furtherance of a legitimate investigation or audit of the OIG.
c. To agencies, offices, or establishments of the executive, legislative, or judicial branches of Federal, State, Tribal, or local government where disclosure is requested in connection with the award of a contract or other determination relating to a government procurement, or the issuance of a license, grant, or other benefit by the requesting agency, to the extent that the record is relevant and necessary to the requesting agency's decisions on the matter, including, but not limited to, disclosure to any Federal agency responsible for considering suspension or debarment actions where such record would be germane to a determination of the propriety or necessity of such action, or any Federal contract board of appeals in cases relating to an agency procurement.
d. To the Office of Personnel Management, the Office of Government Ethics, the Merit Systems Protection Board, the Office of Special Counsel, or the Equal Employment Opportunity Commission, of records or portions thereof relevant and necessary to carrying out their authorized functions, such as, but not limited to, rendering advice requested by the OIG, investigations of alleged or prohibited personnel practices (including discriminatory practices), appeals before official agencies, offices, panels, boards, or courts, and authorized studies or reviews of civil service or merit systems or affirmative action programs.
e. To independent auditors or other private firms with which the OIG has contracted to carry out an independent audit or investigation, or to analyze, collate, aggregate or otherwise refine data collected in the system of records, subject to the requirement that such contractors shall maintain Privacy Act safeguards with respect to such records.
f. To the Department of Justice and for disclosure by the Department of Justice or the FLRA,
(1) To the extent relevant and necessary in connection with litigation in proceedings before a court or other adjudicative body, where the government is a party to or has an interest in the litigation, and the litigation is likely to affect the agency or any component thereof, including where the agency, or an agency component, or an agency official or employee in his or her official capacity, or an individual agency official or employee whom the Department of Justice has agreed to represent, is a defendant; or
(2) For purposes of obtaining advice concerning the accessibility of a record or information under the Privacy Act or the Freedom of Information Act.
g. To a congressional office from the record of a subject individual in response to an inquiry from the congressional office made at the request of that individual, but only to the extent that the record would be legally accessible to that individual.
h. To any direct recipient of Federal funds, such as a contractor, where such record reflects serious inadequacies with a recipient's personnel and disclosure of the record is for purposes of permitting a recipient to take corrective action beneficial to the government.
i. To debt-collection contractors for the purpose of collecting debts owed to the government as authorized by the Debt Collection Act of 1982, 31 U.S.C. 3718.
j. To appropriate agencies, entities, and persons when (1) the FLRA suspects or has confirmed that there has been a breach of the system of records; (2) the FLRA has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, the FLRA (including its information systems, programs, and operations), the Federal Government, or national security; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the FLRA's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
k. To another Federal agency or Federal entity, when the FLRA determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (1) responding to a suspected or confirmed breach or (2) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
l. To contractors, grantees, experts, consultants, students, and others performing or working on a contract, service, grant, cooperative agreement, or other assignment for the federal government, when necessary to accomplish an agency function related to this system of records.
m. To such recipients and under such circumstances and procedures as are mandated by federal statute or treaty.
These records may be in either paper or electronic form, consisting of files, audio or video recordings, disks, flash drives, or other electronic storage media.
The records are retrieved by the name of the subject of the investigation or by a unique control number assigned to each investigation.
Under approved FLRA records schedule N1-480-01-1:
OIG investigative files meeting one or more of the following criteria are kept indefinitely: (1) Cases involving senior agency personnel such as the Chairman; the Members; the Chief Counsels; the General Counsel; the Chief Administrative Law Judge; the Solicitor; the Executive Director; the Executive Director of the Federal Service Impasses Panel; or other senior officials who are either appointed officers or career employees; (2) cases resulting in extensive media coverage, either nationally or regionally; (3) cases resulting in further investigation by Congress; (4) cases involving substantial amounts of money (over $5,000); or (5) cases resulting in substantive changes in FLRA policies and procedures.
All other OIG investigative files are destroyed 10 years after the end of the fiscal year in which the case closes.
Records are maintained in lockable metal file cabinets in lockable rooms and in password-protected automated systems. Access is restricted to individuals whose duties require access to the records. File cabinets and rooms are locked during non-duty hours.
Individuals wishing to request access to records about them should contact the System Manager. Individuals must furnish their full name in order for their records to be located and identified. Individuals wishing to request access to records must comply with the FLRA's Privacy Act regulations regarding access to records (5 CFR 2412.5).
Individuals wishing to request an amendment to their records should contact the System Manager. Individuals must furnish their full name in order for their records to be located and identified. Individuals requesting amendment must also follow the FLRA's Privacy Act regulations regarding amendments to records (5 CFR 2412.10).
Individuals inquiring whether this system contains information about them should contact the System Manager. Individuals must furnish their full name in order for their records to be located and identified. Individuals making inquiries must comply with the FLRA's Privacy Act regulations regarding existence of records (5 CFR 2412.4).
Pursuant to 5 U.S.C. 552a(j)(2), records in this system are exempt from the provisions of 5 U.S.C. 552a, except subsections (b), (c)(1) and (2), (e)(4)(A) through (F), (e)(6), (7), (9), (10), and (11), and (i), to the extent the system of records relates in any way to the enforcement of criminal laws.
Pursuant to 5 U.S.C. 552a(k)(2), the system is exempt from 5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4) (G), (H), and (I), and (f), to the extent the system of records consists of investigatory material compiled for law enforcement purposes, other than material within the scope of the exemption at 5 U.S.C. 552a(j)(2).
These exemptions are set forth in the Authority's Privacy Act regulations, 5 CFR part 2412, as amended;
This system of records was last published at 56 FR 33291 (July 19, 1991).
Not applicable.
FLRA Headquarters and Regional Offices and the Environmental Protection Agency's National Computer Center located at 109 T.W. Alexander Drive, Durham, NC 27709.
Chief FOIA Officer, Office of the Solicitor, Federal Labor Relations Authority, 1400 K St. NW., Washington, DC 20424.
Freedom of Information Act, 5 U.S.C. 552.
To provide the public with a single location to submit and track FOIA requests and appeals filed with the FLRA, to manage internal FOIA administration activities, and to collect data for annual reporting requirements to the Department of Justice.
All persons requesting information or filing appeals under the Freedom of Information Act.
A copy of each Freedom of Information Act (FOIA) request received by the FLRA and a copy of all correspondence related to the request, including the requestors' names, mailing addresses, email addresses, phone numbers, Social Security Numbers, dates of birth, any aliases used by the requesters, alien numbers assigned to travelers crossing national borders, requesters' parents' names, user names and passwords for registered users, FOIA tracking numbers, dates requests are submitted and received, related appeals, and agency responses. Records also include communications with requesters, internal FOIA administrative documents (
Information in this system of records is provided by FLRA employees and FOIA requestors.
In addition to the disclosure generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, these records or information in these records may be used pursuant to 5 U.S.C. 552a(b)(3):
a. To disclose pertinent information to the appropriate Federal, State, or local agency responsible for investigating, prosecuting, enforcing, or implementing a statute, rule, regulation, or order, when the FLRA becomes aware of an indication of a violation or potential violation of civil or criminal law or regulation.
b. To provide information to a congressional office from the record of an individual in response to an inquiry from that congressional office made at the request of that individual.
c. In an appropriate proceeding before a court, grand jury, or administrative or adjudicative body, when the FLRA determines that the records are arguably relevant to the proceeding, or in an appropriate proceeding before an administrative or adjudicative body when the adjudicator determines the records to be relevant to the proceeding.
d. To a Federal, State, local, or foreign agency or entity for the purpose of consulting with that agency or entity to enable the FLRA to make a determination as to the propriety of access to or correction of information, or for the purpose of verifying the identity of an individual or the accuracy of information submitted by an individual who has requested access to or amendment of information.
e. To a Federal agency or entity that furnished the record or information for the purpose of permitting that agency or entity to make a decision as to access to or correction of the record or information, or to a federal agency or entity for purposes of providing guidance or advice regarding the handling of particular requests.
f. To a submitter or subject of a record or information in order to obtain assistance to the FLRA in making a determination as to access or amendment.
g. To a Member of Congress or staff acting upon the Member's behalf when the Member or staff requests the information on behalf of, and at the request of, the individual who is the subject of the record.
h. To disclose information to the National Archives and Records Administration, the Office of Government Information Services (OGIS), to the extent necessary to fulfill its responsibilities in 5 U.S.C. 552(h), to review administrative agency policies,
i. To appropriate agencies, entities, and persons when (1) the FLRA suspects or has confirmed that there has been a breach of the system of records; (2) the FLRA has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, the FLRA (including its information systems, programs, and operations), the Federal Government, or national security; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the FLRA's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
j. To another Federal agency or Federal entity, when the FLRA determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (1) responding to a suspected or confirmed breach or (2) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
k. To contractors, grantees, experts, consultants, students, and others performing or working on a contract, service, grant, cooperative agreement, or other assignment for the federal government, when necessary to accomplish an agency function related to this system of records.
l. To such recipients and under such circumstances and procedures as are mandated by federal statute or treaty.
Records are stored in a secure, password-protected electronic system maintained by the Environmental Protection Agency called FOIAOnline, which utilizes security hardware and software, including multiple firewalls, active intruder detection and role-based accessed controls. Any paper records are stored in secure FLRA offices and/or lockable file cabinets.
Requests are retrieved from the FOIAOnline system by numerous data elements and key word searches, including name, agency, dates, subject, FOIA tracking number, and other information retrievable with full-text searching capability.
FOIA records are maintained for three years or longer, in accordance with item 001 of General Records Schedule 4.2, as approved by the Archivist of the United States. Disposal is by shredding and/or by deletion of the electronic record.
Computer records are maintained in a secure, password-protected computer system. Paper records are maintained in secure offices or lockable file cabinets. All records are maintained in secure, access-controlled areas or buildings.
Individuals wishing access to records about them should contact the System Manager. Individuals must furnish the following information for their records to be located and identified:
a. Full name.
b. Approximate date of FOIA request or appeal.
Individuals requesting access must comply with the FLRA's Privacy Act regulations regarding access to records (5 CFR 2412.5).
Individuals wishing to request amendment of records about them should contact the System Manager. Individuals must furnish the following information for their records to be located and identified:
a. Full name.
b. Approximate date of FOIA request or appeal.
Individuals requesting amendment must follow the FLRA's Privacy Act regulations regarding amendment of records (5 CFR 2412.10).
Individuals wishing to determine whether this system of records contains information about them should contact the System Manager. Individuals must furnish the following for their records to be located and identified:
a. Full name.
b. Approximate date of FOIA request or appeal.
Individuals making inquiries must comply with the FLRA's Privacy Act regulations regarding the existence of records (5 CFR 2412.4).
None.
FLRA/INTERNAL-1-Employee Occupational Health Program Records.
Director, Human Resources Division, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980).
FLRA/INTERNAL-4-Applicants for Employment Records.
Director, Human Resources Division, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980).
FLRA/INTERNAL-5-Preemployment Inquiry Records.
Director, Human Resources Division, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980).
FLRA/INTERNAL-7-Employee Incentive Award and Recognition Files.
Director, Human Resources Division, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980).
FLRA/INTERNAL-8-Employee Assistance Program Records.
Director, Human Resources Division, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980).
FLRA/INTERNAL-9-Federal Executive Development Program Records.
Director, Human Resources Division, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980).
FLRA/INTERNAL-11-Training Records.
Director, Human Resources Division, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980).
FLRA/INTERNAL-12-Performance Evaluation/Rating Records.
Director, Human Resources Division, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980).
FLRA/INTERNAL-13-Intern Program and Upward Mobility Program Records.
Director, Human Resources Division, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980).
FLRA/INTERNAL-14-Motor Vehicle Accident Reports.
Director, Administrative Services Division, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
This system of records was originally published at 45 FR 85316 (Dec. 24, 1980) and was last published, as amended at 60 FR 50202 (Sep. 28, 1995).
FLRA/INTERNAL-16-Occupational Injury and Illness Records.
Director, Human Resources Division, Federal Labor Relations Authority, 1400 K Street NW., Washington, DC 20424.
This system of records was last published at 45 FR 85316 (Dec. 24, 1980).
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than November 24, 2017.
1.
1.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments
1.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than November 15, 2017.
1.
Centers for Medicare & Medicaid Services, HHS.
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (the PRA), federal agencies are required to publish notice in the
Comments must be received by December 26, 2017.
When commenting, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be submitted in any one of the following ways:
1.
2.
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' Web site address at
2. Email your request, including your address, phone number, OMB number, and CMS document identifier, to
3. Call the Reports Clearance Office at (410) 786-1326.
William Parham at (410) 786-4669.
This notice sets out a summary of the use and burden associated with the following information collections. More detailed information can be found in each collection's supporting statement and associated materials (see
Under the PRA (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA requires federal agencies to publish a 60-day notice in the
1.
On September 29, 2017, the “Disaster Tax Relief and Airport and Airway Extension Act of 2017” was enacted into law. Section 302 of this legislation extends the Medicare IVIG Demonstration through December 31, 2020. While existing beneficiaries enrolled in the demonstration as of September 30, 2017 will be automatically re-enrolled, in order to continue to enroll new beneficiaries into the demonstration, an application is required. The original enrollment and financial limits remain and CMS will continue to monitor both to assure that statutory limitations are not exceeded.
This collection of information is for the application to participate in the demonstration. Participation is voluntary and may be terminated by the beneficiary at any time. Beneficiaries who do not participate will continue to be eligible to receive all of the regular Medicare Part B benefits that they are would be eligible for in the absence of the demonstration.
2.
Centers for Medicare and Medicaid Services, HHS.
Final notice.
This final notice announces our decision to approve the Joint Commission (TJC) for continued recognition as a national accrediting organization for critical access hospitals (CAHs) that wish to participate in the Medicare or Medicaid programs.
This final notice is effective November 21, 2017 through November 21, 2023.
Monda Shaver, (410) 786-3410, Karena Meushaw, (410) 786-6609 or Patricia Chmielewski, (410) 786-6899.
Under the Medicare program eligible beneficiaries may receive covered services in a critical access hospital (CAH), provided certain requirements are met. Sections 1820(c)(2)(B) and 1861(mm) of the Social Security Act (the Act) establish distinct criteria for facilities seeking designation as a CAH. The minimum requirements that a CAH must meet to participate in the Medicare Program are at 42 CFR part 485, subpart F. Conditions for Medicare payment for CAHs are at 42 CFR 413.70. Applicable regulations concerning provider agreements are at 42 CFR part 489 and those pertaining to facility survey and certification are at 42 CFR part 488, subparts A and B.
For a CAH to enter into a provider agreement with the Medicare program, a CAH must first be certified by a State survey agency as complying with the conditions or requirements set forth in section 1820 of the Act and our regulations at part 485. Subsequently, the CAH is subject to ongoing review by a State survey agency to determine whether it continues to meet the Medicare requirements. However, there is an alternative to State compliance surveys. Certification by a nationally recognized accreditation program can substitute for ongoing State review.
Section 1865(a)(1) of the Act provides that if the Secretary of the Department
Part 488, subpart A implements the provisions of section 1865 of the Act and requires that a national accrediting organization applying for approval of its Medicare accreditation program must provide the Centers for Medicare & Medicaid Services (CMS) with reasonable assurance that the accrediting organization requires its accredited provider entities to meet requirements that are at least as stringent as the Medicare conditions. Our regulations concerning the approval of accrediting organizations are set forth at § 488.5. The regulations at § 488.5(e)(2)(i) require an accrediting organization to reapply for continued approval of its Medicare accreditation program every 6 years or sooner as determined by CMS. The Joint Commission's (TJC's) term of approval as a recognized Medicare accreditation program for CAHs expires November 21, 2017.
Section 1865(a)(3)(A) of the Act provides a statutory timetable to ensure that our review of applications for CMS-approval of an accreditation program is conducted in a timely manner. The Act provides us 210 days after the date of receipt of a complete application, with any documentation necessary to make the determination to complete our survey activities and application process. Within 60 days after receiving a complete application, we must publish a notice in the
On May 19, 2017, we published a proposed notice in the
• An onsite administrative review of TJC's: (1) corporate policies; (2) financial and human resources available to accomplish the proposed surveys; (3) procedures for training, monitoring and evaluation of its hospital surveyors; (4) ability to investigate and respond appropriately to complaints against accredited hospitals; and (5) survey review and decision-making process for accreditation.
• A comparison of TJC's Medicare accreditation program standards to our current Medicare CAH Conditions of Participation (CoPs).
• A documentation review of TJC's survey process to do the following:
++ Determine the composition of the survey team, surveyor qualifications, and TJC's ability to provide continuing surveyor training.
++ Compare TJC's processes to those we require of State survey agencies, including periodic resurvey and the ability to investigate and respond appropriately to complaints against accredited CAHs.
++ Evaluate TJC's procedures for monitoring CAHs found to be out of compliance with TJC's program requirements. (This pertains only to monitoring procedures when TJC identifies non-compliance. If non-compliance is identified by a State survey agency through a validation survey, the State survey agency monitors corrections as specified at § 488.9(c).)
++ Assess TJC's ability to report deficiencies to the surveyed hospitals and respond to the hospital's plan of correction in a timely manner.
++ Establish TJC's ability to provide CMS with electronic data and reports necessary for effective validation and assessment of the organization's survey process.
++ Determine the adequacy of TJC's staff and other resources.
++ Confirm TJC's ability to provide adequate funding for performing required surveys.
++ Confirm TJC's policies with respect to surveys being unannounced.
++ Obtain TJC's agreement to provide CMS with a copy of the most current accreditation survey together with any other information related to the survey as we may require, including corrective action plans.
In accordance with section 1865(a)(3)(A) of the Act, the May 19, 2017 proposed notice also solicited public comments regarding whether TJC's requirements met or exceeded the Medicare CoP for CAHs. There were two comments submitted, neither of which related to the content of the proposed notice.
We compared TJC's CAH accreditation requirements and survey process with the Medicare CoPs at part 485, and the survey and certification process requirements of parts 488 and 489. TJC's standards and crosswalk were also examined to ensure that the appropriate CMS regulations would be included in citations as appropriate. We reviewed and evaluated TJC's CAH application, which was conducted as described in section III of this final notice. As a result TJC has revised the following standards and certification processes:
• Section 482.21(d)(2): Updated its standards and crosswalk to include a comparable standard to allow facilities to develop and implement an information technology system explicitly designed to improve patient safety and quality of care as part of its quality improvement program.
• Section 482.21(d)(4): Updated its standards and crosswalk to include a comparable standard that requires facilities that do not participate in a cooperative project to implement projects that are of comparable effort.
• Sections 482. 22(b)(4)(iii) through (b)(4)(iv): Updated its standards and crosswalk to ensure that CAHs are not permitted to have a “unified and integrated medical staff.”
• Section 482.28(b)(2): Updated its standards and crosswalk to include a comparable standard to require that all patient diets, including therapeutic diets, must be ordered by a practitioner responsible for the care of the patient, or by a qualified dietitian or qualified nutrition professional as authorized by the medical staff and in accordance with State law governing dietitians and nutritional professionals.
• Section 482.53(b): Updated its standards and crosswalk to include the “preparation” of radioactive materials.
• Section 485.618(d)(4): Updated its standards and crosswalk to address the withdrawal of a request for using Registered Nurses on a temporary basis as part of their State Rural Healthcare Plan with the State Boards of Medicine and Nursing.
• Sections 485.627(b)(1) through (b)(3): Updated its standards and
• Section 485.645(a)(2): Updated its crosswalk to include the correct regulatory language to require that the facility limits inpatient beds to no more than 25 and is verified on all surveys.
• Section 488.5(a)(4)(vii): Updated its policies and review process to ensure that approved plans of correction fully address all non-compliant practices identified during the survey; that appropriate policy changes have been made to ensure compliance; and that plans of correction identify the responsible party for ensuring corrective actions are implemented within the CAH and contain a description of how the CAH will monitor and evaluate the effectiveness of the corrective actions, analyze the data, and report findings to the senior leadership and governing body to ensure continued regulatory compliance.
• Section 488.5(a)(12): Provided CMS with assurance that its procedures for responding to, and investigating complaints against accredited facilities are fully implemented and followed.
• Section 488.26(b): Revised surveyor documentation to include appropriately detailed deficiency statements that clearly support the determination of noncompliance and appropriate level of deficiency.
TJC revised its survey policy and procedure to clearly delineate that a survey will not occur until after the applicable Regional Office has made a determination of the CAH's compliance with location and distance requirements.
Based on our review and observations described in section III of this final notice, we have determined that TJC's CAH program requirements meet or exceed our requirements, and its survey processes are comparable to ours. Therefore, we approve TJC as a national accreditation organization for critical access hospitals that request participation in the Medicare program, effective November 21, 2017 through November 21, 2023.
This document does not impose information collection requirements, that is, reporting, recordkeeping or third-party disclosure requirements. Consequently, there is no need for review by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Centers for Medicare & Medicaid Services (CMS), HHS.
Notice.
This quarterly notice lists CMS manual instructions, substantive and interpretive regulations, and other
It is possible that an interested party may need specific information and not be able to determine from the listed information whether the issuance or regulation would fulfill that need. Consequently, we are providing contact persons to answer general questions concerning each of the addenda published in this notice.
The Centers for Medicare & Medicaid Services (CMS) is responsible for administering the Medicare and Medicaid programs and coordination and oversight of private health insurance. Administration and oversight of these programs involves the following: (1) Furnishing information to Medicare and Medicaid beneficiaries, health care providers, and the public; and (2) maintaining effective communications with CMS regional offices, state governments, state Medicaid agencies, state survey agencies, various providers of health care, all Medicare contractors that process claims and pay bills, National Association of Insurance Commissioners (NAIC), health insurers, and other
Section 1871(c) of the Act requires that we publish a list of all Medicare manual instructions, interpretive rules, statements of policy, and guidelines of general applicability not issued as regulations at least every 3 months in the
This quarterly notice provides only the specific updates that have occurred in the 3-month period along with a hyperlink to the full listing that is available on the CMS Web site or the appropriate data registries that are used as our resources. This is the most current up-to-date information and will be available earlier than we publish our quarterly notice. We believe the Web site list provides more timely access for beneficiaries, providers, and suppliers. We also believe the Web site offers a more convenient tool for the public to find the full list of qualified providers for these specific services and offers more flexibility and “real time” accessibility. In addition, many of the Web sites have listservs; that is, the public can subscribe and receive immediate notification of any updates to the Web site. These listservs avoid the need to check the Web site, as notification of updates is automatic and sent to the subscriber as they occur. If assessing a Web site proves to be difficult, the contact person listed can provide information.
This notice is organized into 15 addenda so that a reader may access the subjects published during the quarter covered by the notice to determine whether any are of particular interest. We expect this notice to be used in concert with previously published notices. Those unfamiliar with a description of our Medicare manuals should view the manuals at
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Submit either electronic or written comments on the collection of information by December 26, 2017.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before December 26, 2017. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
•
Domini Bean, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-5733,
Under the PRA (44 U.S.C. 3501-3520), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites
This information collection supports the guidance for industry on “Formal Dispute Resolution: Scientific and Technical Issues Related to Pharmaceutical Current Good Manufacturing Practice.” The guidance is available at:
When a scientific or technical issue arises during an FDA inspection, the manufacturer should initially attempt to reach agreement on the issue informally with the investigator. Certain scientific or technical issues may be too complex or time consuming to resolve during the inspection. If resolution of a scientific or technical issue is not accomplished through informal mechanisms before the issuance of Form FDA 483, the manufacturer can formally request DR and use the two-tiered DR process described in the guidance.
Tier one of the formal DR process involves a manufacturer raising scientific or technical issues to the ORA and center levels. If a manufacturer disagrees with the tier-one decision, tier two of the formal DR process would then be available for appealing that decision to the DR panel. The written request for formal DR to the appropriate ORA unit should be made within 30 days of the completion of an inspection and should include all supporting documentation and arguments for review, as described in this document. The written request for formal DR to the DR panel should be made within 60 days of receipt of the tier-one decision and should include all supporting documentation and arguments, as described in this document.
All requests for formal DR should be submitted in writing and include adequate information to explain the nature of the dispute and to allow FDA to act quickly and efficiently. Each request should be sent to the appropriate address listed in the guidance and include the following elements:
• Cover sheet that clearly identifies the submission as either a tier-one or tier-two DR request.
• Name and address of manufacturer inspected (as listed on Form FDA 483).
• Date of inspection (as listed on Form FDA 483).
• Date Form FDA 483 was issued (as listed on Form FDA 483).
• Facility Establishment Identifier number, if available (as listed on Form FDA 483).
• Names and titles of FDA employees who conducted inspection (as listed on Form FDA 483).
• Office responsible for the inspection (
• Application number if the inspection was a preapproval inspection.
• Comprehensive statement of each issue to be resolved:
○ Identify the observation in dispute.
○ Clearly present the manufacturer's scientific position or rationale concerning the issue under dispute with any supporting data.
○ State the steps that have been taken to resolve the dispute, including any informal DR that may have occurred before the issuance of Form FDA 483.
○ Identify possible solutions.
○ State expected outcome.
• Name, title, telephone and fax numbers, and email address (as available) of manufacturer contact.
The guidance responds to industry's request for a formal DR process to resolve differences related to scientific and technical issues that arise between investigators and pharmaceutical manufacturers during FDA inspections of foreign and domestic manufacturers. In addition to encouraging manufacturers to use currently available DR processes, the guidance describes the formal two-tiered DR process explained previously. The guidance also covers the following topics:
• Suitability of certain issues for the formal DR process, including examples, with a discussion of their appropriateness for the DR process.
• Instructions on how to submit requests for formal DR, and a list of the supporting information that should accompany these requests.
• Public availability of decisions reached during the DR process to promote consistent application and interpretation of regulations related to drug quality.
We estimate the burden for the information collection as follows:
As reflected in table 1, we estimate two manufacturers will submit two requests annually for tier-one DR, and that there will be one appeal of these requests to the DR panel (tier-two DR). We estimate also that it will take manufacturers approximately 30 hours to prepare and submit each request for a tier-one DR, and approximately 8 hours to prepare and submit each request for a tier-two DR. Based on our experience with this collection we have not changed our estimate since our last request for OMB approval.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by November 27, 2017.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, Fax: 202-395-7285, or emailed to
Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-8867,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
The 2009 Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act) (Pub. L. 111-31) amends the Federal Food, Drug, and Cosmetic Act (the FD&C Act) to grant FDA authority to regulate the manufacture, marketing, and distribution of tobacco products to protect public health and to reduce tobacco use by minors. Section 1003(d)(2)(D) of the FD&C Act (21 U.S.C. 393(d)(2)(D)) supports the development and implementation of FDA public education campaigns related to tobacco use. Accordingly, FDA is currently developing and implementing a tobacco education intervention at the point of sale to reduce the public health burden of tobacco use. The campaign features advertisements intended to encourage future quit attempts among current smokers in stores that sell tobacco products.
In support of the provisions of the Tobacco Control Act that require FDA to protect the public health, FDA requests OMB approval to collect information to evaluate the effectiveness of the point of sale tobacco education campaign. Data from this outcome evaluation study will be used to examine statistical associations between exposure to the campaign and specific outcomes of interest, which include awareness of the campaign and its messaging, tobacco-related attitudes, beliefs and risk perceptions, and motivation to quit smoking.
Evaluation is an essential organizational practice in public health and a systematic way to account for and improve public health actions. Comprehensive evaluation of FDA's public education campaigns will be used to document whether the intended audience is aware of and understands campaign messages, and whether campaign exposure influences tobacco-related attitudes, beliefs and risk perceptions, intentions to use tobacco, and motivation to quit smoking. Participation in the outcome evaluation study will be voluntary. All of the information collected is integral to that evaluation.
Information will be collected from adult cigarette smokers, ages 25 to 54, about awareness of and exposure to campaign advertisements, tobacco use, and knowledge, attitudes, and beliefs related to tobacco use. Information will be collected on demographic variables including age, sex, race/ethnicity, and primary language. Participants will also be offered the option to download a smartphone application that will track their exposure to the campaign, and that will ask them to respond to a brief survey about every 6 months over 18 months.
FDA's media contractor identified 37 potential counties for the campaign. From this list, FDA's evaluation contractor has selected 30 counties to be included in the evaluation. Of these, 15 counties will receive the intervention (treatment counties), and 15 counties will not receive it (control counties). The number of counties has changed since the 60-day notice because we changed the experimental design to have one treatment group instead of two, which resulted in needing fewer counties.
Data will be collected from a longitudinal cohort that will consist of an entirely new sample of adult cigarette smokers. Addresses will be randomly selected from postal carrier routes in the 30 selected U.S. counties to identify households that contain one or more adult smokers between the ages of 25 and 54. Pre-paid pre-addressed paper screening surveys will be mailed to approximately 104,541 households. We estimate that 27,651 (9,217 annualized respondents) households will return the 10-minute screener they received by mail, and 26,258 (8,753
Accounting for nonresponse, we estimate that the mail and field screenings will result in 4,282 (1,427 annualized) adults who meet criteria for participation and complete the full Wave 1 questionnaire. The Wave 1 questionnaire will be completed during an in-person visit to the home, immediately after the field screening is completed, assuming the selected participant is available to complete the questionnaire at that time. If the participant is not available at that time, the interviewer will schedule a time to return to the household and complete the evaluation questionnaire in person. We estimate that the Wave 1 questionnaire will take 40 minutes to complete, resulting in 2,869 (956 annualized) burden hours. Adjusting for loss to follow-up between waves, we anticipate that 3,426 (1,142 annualized) participants will complete the Wave 2 questionnaire, which will take 40 minutes and result in 2,295 (765 annualized) burden hours, that 2,912 (971 annualized) participants will complete the Wave 3 questionnaire, which will take 40 minutes and result in 1,951 (650 annualized) burden hours, and that 2,475 (825 annualized) participants will complete the Wave 4 questionnaire, which will take 40 minutes and result in 1,658 (553 annualized) burden hours. The Waves 2, 3, and 4 questionnaires will be completed online or in person by trained interviewers, depending on participant preference. The total burden hours for Waves 2 to 4 evaluation questionnaires will be 5,904 (1,968 annualized).
We anticipate that approximately 54 percent of the participants (2,308 people (769 annualized)) who complete the Wave 1 questionnaire will download a smartphone application that will deliver brief app-based questionnaires to them in between the four waves of evaluation data collection. These participants will complete three questionnaires lasting 5 minutes each (every 6 months over the course of 18 months), resulting in 554 (185 annualized) burden hours. The app will also use geolocation technology to record participants' visits to convenience stores as a measure of passive campaign exposure.
In addition, over the course of the study, telephone verification questionnaires will be conducted with a small portion of participants. The purpose of these questionnaires is to ensure that information obtained by field interviewers is correct, to evaluate the performance of field interviewers, to avoid fraud, and to ensure that all relevant incentives were delivered. Trained staff will administer a 5-minute verification questionnaire to a random sample of 10 percent of participants who completed the in-person screening but not the Wave 1 questionnaire (2,198 individuals (733 annualized)), and a random sample of 10 percent of participants who completed the Waves 1 to 4 questionnaires (1,308 individuals (436 annualized)). At 5 minutes per verification questionnaire, this results in 177 burden hours (59 annualized) for the field screener telephone verifications and 105 burden hours (35 annualized) for the four evaluation questionnaire telephone verifications. Some telephone verification questionnaires may be administered in person if it is not possible to reach the individual by phone. This verification process has been added to the information collection request since the 60-day notice to prevent fraudulent data entry by interviewers.
In addition to the telephone verification survey, we will also audio record (with participants' consent) interviews with a random sample of approximately 10 percent of respondents to the Wave 1 questionnaire and a random 10 percent of the Waves 2, 3, and 4 respondents who complete the questionnaire in person as an additional quality control measure. These recordings will be used to measure interviewer compliance with study procedures and will be destroyed after they are reviewed. This procedure does not affect participant burden.
The total burden hours for the mail and field screeners, four outcome evaluation questionnaires, three app-based questionnaires, and four telephone verification questionnaires is 18,773 (6,258 annualized).
In the
FDA estimates the burden of this collection of information as follows:
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Submit either electronic or written comments on the collection of information by December 26, 2017.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before December 26, 2017. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
•
Ila S. Mizrachi, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-7726,
Under the PRA (44 U.S.C. 3501-3520), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) Whether
CVM's Guidance for Industry (GIF) #79, “Dispute Resolution Procedures for Science-Based Decisions on Products Regulated by the Center for Veterinary Medicine” (
CVM encourages applicants to begin the resolution of science-based disputes with discussions with the review team/group, including the Team Leader or Division Director. The Center prefers that differences of opinion regarding science or science-based policy be resolved between the review team/group and the applicant. If the matter is not resolved by this preferred method then CVM recommends that the applicant follow the procedures in GFI #79.
FDA estimates the burden of this collection of information as follows:
In the next 3 years, CVM anticipates receiving one or fewer requests for review of a scientific dispute per year, on average. We base our estimate on CVM's experience over the past 6 years in handling formal appeals for scientific disputes. The burden of this collection has changed. The number of respondents decreased from two to one annually, the number of responses per respondent remained at four annually, the hours per response remained at 10 annually, and the total number of hours decreased from 80 to 40. This decrease in the total hours is the result of a natural fluctuation in the number of respondents taking advantage of this dispute resolution process.
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Pediatric Gastroesophageal Reflux Disease: Developing Drugs for Treatment.” The purpose of this draft guidance is to assist sponsors in the clinical development of drugs for the treatment of gastroesophageal reflux disease (GERD) in the pediatric patient population, including guidance on clinical presentation by age and disease, study populations, endpoints, and pharmacometric issues affecting dosing.
Submit either electronic or written comments on the draft guidance by December 26, 2017 to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
•
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Stacy Barley, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 75, Rm. 2642, Silver Spring, MD 20993-0002, 301-796-2137.
FDA is announcing the availability of a draft guidance for industry entitled “Pediatric Gastroesophageal Reflux Disease: Developing Drugs for Treatment.” The purpose of this draft guidance is to assist sponsors in the clinical development of drugs for the treatment of GERD in the pediatric patient population, including guidance on clinical presentation by age and disease, study populations, endpoints, and pharmacometric issues affecting dosing.
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on the development of drugs for the treatment of GERD in the pediatric patient population. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations. This guidance is not subject to Executive Order 12866.
This guidance refers to previously approved collections of information that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR parts 312 and 314 have been approved under OMB control numbers 0910-0014 and 0910-0001, respectively. The collections of information in 21 CFR 201.56 and 201.57 have been approved under OMB control number 0910-0572.
Persons with access to the internet may obtain the draft guidance at either
Food and Drug Administration, HHS.
Notice of public workshop; request for comments.
The Food and Drug Administration (FDA) is announcing a public workshop to convene a discussion on methodological approaches that a person seeking to collect patient experience data for submission to FDA to inform regulatory decision making may use. The methods and approaches would be considered relevant and objective, and ensure that collected data are accurate and representative of the intended population, including methods to collect meaningful patient input throughout the drug development process and methodological considerations for data collection, reporting, management, and analysis. This workshop will inform development of patient-focused drug development
The public workshop will be held on December 18, 2017, from 9 a.m. to 5 p.m. Submit either electronic or written comments on this public workshop by February 16, 2018. See the
The public workshop will be held at FDA's White Oak Campus, 10903 New Hampshire Ave., Bldg. 31 Conference Center, the Great Room (Rm. 1503), Silver Spring, MD 20993. Entrance for the public workshop participants (non-FDA employees) is through Building 1 where routine security check procedures will be performed. For parking and security information, please refer to
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before February 16, 2018. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
•
Meghana Chalasani, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 1146, Silver Spring, MD 20993-0002, 240-402-6525, Fax: 301-847-8443,
This public workshop is intended to support FDA implementation of requirements for guidance development under section 3002 of the Cures Act and to meet a performance goal included in the sixth reauthorization of PDUFA VI. This reauthorization, part of the FDA Reauthorization Act of 2017 (FDARA) signed by the President on August 18, 2017, includes a number of performance goals and procedures that are documented in the PDUFA VI Commitment Letter, which is available at
Section 3002 of Title III, Subtitle A of the Cures Act directs FDA to develop patient-focused drug development guidance to address a number of areas including under section 3002(c)(1): Methodological approaches, which are relevant and objective and ensure that such data are accurate and representative of the intended population, that a person seeking to
In addition, FDA committed to meet certain performance goals under PDUFA VI. These goal commitments were developed in consultation with patient and consumer advocates, health care professionals, and other public stakeholders, as part of negotiations with regulated industry. Section J.1 of the commitment letter, “Enhancing the Incorporation of the Patient's Voice in Drug Development and Decision-Making,” (
Prior to the issuance of each guidance, as part of the development, FDA will conduct a public workshop to gather input from the wider community of patients, patient advocates, academic researchers, expert practitioners, drug developers, and other stakeholders.
FDA is announcing a public workshop to convene a discussion on topics related to approaches to collecting comprehensive and representative patient and caregiver input on burden of disease and current therapy. The purpose of this public workshop is to obtain feedback from stakeholders on considerations for: (1) Standardized nomenclature and terminologies for patient-focused drug development, (2) methods to collect meaningful patient input throughout the drug development process, and (3) methodological considerations for data collection, reporting, management, and analysis of patient input. FDA is seeking information and comments from a broad range of stakeholders, including patients, patient advocates, academic and medical researchers, expert practitioners, drug developers, and other interested persons. FDA will publish a discussion document outlining the topic areas that will be addressed in the draft guidance. This document will be published approximately 1 month before the workshop date on the Web site at:
If you need special accommodations because of a disability, please contact Meghana Chalasani (see
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) has determined that CARDENE SR (nicardipine HCl) extended-release capsules, 30 milligrams (mg), 45 mg, and 60 mg, were not withdrawn from sale for reasons of safety or effectiveness. This determination will allow FDA to approve abbreviated new drug applications (ANDAs) for nicardipine HCl extended-release capsules, 30 mg, 45 mg, and 60 mg, if all other legal and regulatory requirements are met.
Daniel Gottlieb, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6208, Silver Spring, MD 20993-0002, 301-796-6650.
In 1984, Congress enacted the Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) (the 1984 amendments), which authorized the approval of duplicate versions of drug products under an ANDA procedure. ANDA applicants must, with certain exceptions, show that the drug for which they are seeking approval contains the same active ingredient in the same strength and dosage form as the listed drug, which is a version of the drug that was previously approved. ANDA applicants do not have to repeat the extensive clinical testing otherwise necessary to gain approval of a new drug application (NDA).
The 1984 amendments include what is now section 505(j)(7) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(7)), which requires FDA to publish a list of all approved drugs. FDA publishes this list as part of the “Approved Drug Products with Therapeutic Equivalence Evaluations,” which is known generally as the Orange Book. Under FDA regulations, drugs are removed from the list if the Agency
A person may petition the Agency to determine, or the Agency may determine on its own initiative, whether a listed drug was withdrawn from sale for reasons of safety or effectiveness. This determination may be made at any time after the drug has been withdrawn from sale, but must be made prior to approving an ANDA that refers to the listed drug (§ 314.161 (21 CFR 314.161)). FDA may not approve an ANDA that does not refer to a listed drug.
CARDENE SR (nicardipine HCl) extended-release capsules, 30 mg, 45 mg, and 60 mg, are the subject of NDA 020005, initially approved on February 21, 1992. CARDENE SR is indicated for the treatment of hypertension.
In a letter dated September 15, 2014, EKR Therapeutics, Inc., requested withdrawal of NDA 020005 for CARDENE SR (nicardipine HCl) extended-release capsules, 30 mg, 45 mg, and 60 mg. In the
Jubilant Generics submitted a citizen petition dated April 27, 2017 (Docket No. FDA-2017-P-2660), under 21 CFR 10.30, requesting that the Agency determine whether CARDENE SR (nicardipine HCl) extended-release capsules, 30 mg, 45 mg, and 60 mg, were withdrawn from sale for reasons of safety or effectiveness.
After considering the citizen petition and reviewing Agency records and based on the information we have at this time, FDA has determined under § 314.161 that CARDENE SR (nicardipine HCl) extended-release capsules, 30 mg, 45 mg, and 60 mg, were not withdrawn for reasons of safety or effectiveness. The petitioner has identified no data or other information suggesting that CARDENE SR (nicardipine HCl) extended-release capsules, 30 mg, 45 mg, and 60 mg, were withdrawn for reasons of safety or effectiveness. We have carefully reviewed our files for records concerning the withdrawal of CARDENE SR (nicardipine HCl) extended-release capsules, 30 mg, 45 mg, and 60 mg from sale. We have also independently evaluated relevant literature and data for possible postmarketing adverse events. We have found no information that would indicate that this drug product was withdrawn from sale for reasons of safety or effectiveness.
Accordingly, the Agency will continue to list CARDENE SR (nicardipine HCl) extended-release capsules, 30 mg, 45 mg, and 60 mg, in the “Discontinued Drug Product List” section of the Orange Book. The “Discontinued Drug Product List” delineates, among other items, drug products that have been discontinued from marketing for reasons other than safety or effectiveness. ANDAs that refer to CARDENE SR (nicardipine HCl) extended-release capsules, 30 mg, 45 mg, or 60 mg, may be approved by the Agency as long as they meet all other legal and regulatory requirements for the approval of ANDAs. If FDA determines that labeling for this drug product should be revised to meet current standards, the Agency will advise ANDA applicants to submit such labeling.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by November 27, 2017.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, Fax: 202-395-7285, or emailed to
Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-8867,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
The information collection activity will garner qualitative customer and stakeholder feedback in an efficient, timely manner in accordance with the Administration's commitment to improving service delivery. By qualitative feedback we mean information that provides useful insights on perceptions and opinions, but are not statistical surveys that yield quantitative results that can be generalized to the population of study. This voluntary feedback will provide insights into customer or stakeholder perceptions, experiences and expectations, provide an early warning of issues with service, or focus attention on areas where communication, training, or changes in operations might improve delivery of products or services. These collections will allow for ongoing, collaborative, and actionable communications between the Agency and its customers and stakeholders. It will also allow feedback to contribute directly to the improvement of program management.
Feedback collected under this generic clearance will provide useful information, but it will not yield data that can be generalized to the overall population. This type of generic clearance for qualitative information will not be used for quantitative information collections that are designed to yield reliably actionable results, such as monitoring trends over time or documenting program performance. Such data uses require more rigorous designs that address the following: The target population to which generalizations will be made, the sampling frame, the sample design (including stratification and clustering), the precision requirements or power calculations that justify the proposed sample size, the expected response rate,
In the
FDA estimates the burden of this collection of information as follows:
Pursuant to the Federal Advisory Committee Act, the Department of Health and Human Services (HHS) announces the following Subcommittee meetings of the National Committee on Vital and Health Statistics to be held virtually.
The NCVHS virtual meeting of the Privacy, Confidentiality and Security Subcommittee will convene to discuss a draft environmental scan report of the health information privacy and security landscape in the U.S. that extends beyond HIPAA. This will include formal presentations from invited experts to further inform the draft environmental scan research being conducted on the Committee's behalf. The agenda also will include discussion of privacy-related topics under consideration for the 2018 workplan.
The NCVHS virtual meeting of the Standards Subcommittee will convene to consider the Subcommittee's workplan and high level milestones for three possible projects in 2018: (1) A Chief Information Officer (CIO) Forum; (2) the challenge of patient identification and matching for healthcare providers and patients; and (3) potential guidance pertaining to the prior authorization transaction. In addition, CMS will provide a briefing to the Subcommittee on the New Medicare Card Project.
U.S. Coast Guard, Department of Homeland Security.
Notice of Federal Advisory Committee meeting.
The Towing Safety Advisory Committee and its Subcommittees will meet in New Orleans, Louisiana to review and discuss recommendations from its Subcommittees and to receive briefs on items listed in the agenda under
All meetings will be held at the Omni Riverfront Hotel, 701 Convention Center Boulevard, New Orleans, Louisiana 70130;
For information on facilities or services for individuals with disabilities, or to request special assistance at the meetings, contact the individuals listed in the
Written comments must be submitted using the Federal eRulemaking Portal at
Commander Jose Perez, Designated Federal Officer of the Towing Safety Advisory Committee, Commandant (CG-OES-2), U.S. Coast Guard, 2703 Martin Luther King Jr. Avenue SE., Stop 7509, Washington, DC 20593-7509; telephone 202-372-1410, fax 202-372-8382 or email
Notice of this meeting is in compliance with the
On December 5 and 6, 2017, from 8 a.m. to 5 p.m. the Towing Safety Advisory Committee and its subcommittees will meet to review, discuss, deliberate, and formulate recommendations, as appropriate, on the following:
A copy of all meeting documentation, including any draft final reports, will be available at
Public comments or questions will be taken throughout the meeting as the committee discusses the issues and prior to deliberations and voting. There will also be a public comment period at the end of the meeting. Speakers are requested to limit their comments to 3 minutes. Please note that the public comment period may end before the period allotted, following the last call for comments. Contact the individual listed in the
November 6, 2017, 1:30 p.m.-5:00 p.m.
Offices of Baker/McKenzie LLP, 815 Connecticut Avenue NW., Washington, DC 20006.
Meeting of the Board of Directors with the Advisory Council, Open to the public.
Paul Zimmerman, General Counsel, (202) 683-7118.
Fish and Wildlife Service, Interior.
Notice of receipt of permit applications; request for comment.
We, the U.S. Fish and Wildlife Service, invite the public to comment on the following applications to conduct certain activities with endangered species. With some exceptions, the Endangered Species Act (ESA) prohibits activities with listed species unless a Federal permit is issued that allows such activities. The ESA requires that we invite public comment before issuing these permits.
We must receive written data or comments on the applications at the address given in
•
•
Karen Marlowe, Permit Coordinator, 404-679-7097 (telephone) or 404-679-7081 (fax).
We invite review and comment from local, State, and Federal agencies and the public on applications we have received for permits to conduct certain activities with endangered and threatened species under section 10(a)(1)(A) of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
We provide this notice under section 10(c) of the Act.
Bureau of Land Management, Interior.
Notice of availability.
In accordance with the National Environmental Policy Act of 1969, as amended (NEPA), and the Federal Land Policy and Management Act of 1976, as amended (FLPMA), the Bureau of Land Management (BLM) has prepared a Draft Amendment to the California Desert Conservation Area (CDCA) Plan and a Draft Supplemental Environmental Impact Statement (EIS) for the Palen Solar Photovoltaic (PSP) Project and by this Notice is announcing the opening of the comment period. This document is also an Environmental Impact Report (EIR) prepared by Riverside County under the California Environmental Quality Act (CEQA).
To ensure that all comments will be considered, the BLM must receive written comments on the Draft Supplemental EIS/EIR within 45 days following the date the Environmental Protection Agency publishes its Notice of Availability in the
You may submit comments related to the PSP Project by any of the following methods:
Copies of the Draft Supplemental EIS/EIR are available in the BLM-Palm Springs South Coast Field Office, 1201 Bird Center Drive, Palm Springs, CA 92262, and at the BLM California Desert District Office, 22835 Calle San Juan De Los Lagos, Moreno Valley, CA 92553, and electronically on the project Web site. Compact Disc copies of the document are available through request on this project Web site address.
Mark DeMaio, BLM Project Manager, telephone: (760) 833-7124; address: BLM, Palm Springs-South Coast Field Office, 1201 Bird Center Drive, Palm Springs, CA 92262; email:
Persons who use telecommunication devices for the deaf may call the Federal Relay Service at 1-800-877-8339 to contact the above individual during normal business hours. The Service is available 24 hours a day, 7 days a week, to leave a message or questions with the above individual regarding the project. You will receive a reply during normal business hours.
EDF Renewable Energy has applied for a Right-of-Way (ROW) from the BLM to construct, operate, maintain, and decommission a 500 megawatt (MW) solar photovoltaic facility near Desert Center, Riverside County, California. The ROW application area comprises about 4,200 acres, with a proposed project footprint of about 3,400 acres. The proposed project also includes construction of a 6.7-mile single circuit 230 kilovolt generation interconnection (gen-tie) transmission line connecting the project to the Southern California Edison (SCE) Red Bluff Substation.
The BLM is also considering an amendment to the CDCA Plan that would be necessary to authorize the project. This is a joint EIS/EIR for compliance with NEPA and CEQA. Riverside County is the lead agency under CEQA.
This Project application was originally submitted in 2007 as the Palen Solar Power Project (PSPP) by Palen Solar I, LLC (PSI), a wholly owned subsidiary of Solar Millennium. The PSPP was proposed as a solar trough project, and was the subject of an EIS under NEPA. The BLM, pursuant to its obligations under FLPMA and NEPA, published a Draft EIS, followed by a Proposed Resource Management Plan Amendment (RMP) and Final EIS on May 13, 2011 (76 FR 28064).
Before the BLM issued a Record of Decision (ROD), PSI informed the BLM that it would not construct the Project due to bankruptcy. As a result, the BLM did not issue a ROD, did not amend the RMP, and did not issue a ROW grant for the PSPP.
On June 21, 2012, the bankruptcy court approved the transfer of the application from PSI to Palen Solar III, LLC (PSIII). BrightSource Energy Inc., (BSE) then acquired all rights to PSIII at auction. PSIII submitted a revised ROW application to the BLM for the Palen Solar Electricity Generating System Project (PSEGS), a 500 MW concentrating solar power tower technology facility and single-circuit 230 kV gen-tie line. On July 27, 2013, the BLM issued a Draft Supplemental EIS and Plan Amendment to evaluate the potential additional environmental impacts caused by PSEGS. As part of the State permitting process, the California Energy Commission evaluated the PSEGS under CEQA, and issued Preliminary and Final Staff Assessments for the amended project in June and November of 2013, respectively.
The BLM did not issue a Final Supplemental EIS for the PSEGS Project because BSE and its partner, Abengoa Solar Inc., abandoned the State authorization proceedings at the California Energy Commission. In December 2015, EDF Renewable Energy acquired the PSEGS project. EDF Renewable Energy has submitted a revised ROW application for the Proposed Project, which is analyzed in
For the PSP Project, the BLM held public meetings on the revised ROW application in June and August 2016 in Palm Springs, California. The Draft Supplemental EIS/EIR includes analysis of the revised ROW application as it relates to the following issues:
(1) Updated description of the Proposed Project, based on the revised ROW application;
(2) Impacts to cultural resources and tribal concerns;
(3) Impacts to the Sand Transport Corridor and Mojave fringe-toed lizard habitat and washes;
(4) Impacts to Joshua Tree National Park;
(5) Impacts to avian species;
(6) Impacts to visual resources; and
(7) Relationship between the project and the regional renewable energy planning in the Desert Renewable Energy Conservation Plan.
In addition to the Proposed Action, the Draft Supplemental EIS/EIR considers a No-Action Alternative and two additional action alternatives. Alternative 1, Reduced Footprint, would be a 500 MW Photovoltaic (PV) array on about 3,100 acres. It avoids the central and largest desert wash and incorporates a more efficient use of the land for the solar array. Alternative 2, Avoidance Alternative, would be an up to 230 MW solar PV array on about 1,620 acres. Like the Proposed Action, under each of these alternatives, the BLM would amend the CDCA Plan to allow the project. Under the No-Action Alternative, the BLM would deny the ROW application, and would not amend the CDCA Plan to allow the project.
The BLM has selected Alternative 1—Reduced Footprint Alternative—as the Agency-Preferred Alternative for the Draft Supplemental EIS. The BLM and other cooperating agencies involved are inviting Draft Supplemental EIS reviewers to offer comments on the comparison of alternatives, as presented in the document.
Your input is important and will be considered in the environmental and land-use planning analysis. Please note that public comments and information submitted, including names, street addresses, and email addresses of persons who submit comments will be available for public review and disclosure at the above address during regular business hours (8 a.m. to 4 p.m.), Monday through Friday, except holidays.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
40 CFR 1506.6, 40 CFR 1506.10, 43 CFR 1610.2.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has determined to find no violation of section 337 of the Tariff Act of 1930, in the above-identified investigation. The investigation is terminated in its entirety.
Cathy Chen, Esq., Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 205-2392. Copies of non-confidential documents filed in connection with this investigation are or will be available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 205-2000. General information concerning the Commission may also be obtained by accessing its Internet server at
The Commission instituted this investigation on January 11, 2016, based on a complaint filed by Neology, Inc. of Poway, California (“Neology”). 81 FR 1205-06 (Jan. 11, 2016). The complaint, as supplemented, alleges violations of section 337 in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain radio frequency identification (“RFID”) products and components thereof by reason of infringement of certain claims of U.S. Patent Nos. 8,325,044 (“the '044 patent”); 7,119,664 (“the '664 patent”); and 8,587,436 (“the '436 patent”). The complaint further alleges that an industry in the United States exists as required by 19 U.S.C. 1337(a)(2). The notice of investigation named numerous respondents. Respondents Kapsch TrafficCom IVHS, Inc. of McLean, Virginia; Kapsch TrafficCom Holding Corp. of McLean, Virginia; Kapsch TrafficCom Canada, Inc. of Mississauga, Ontario, Canada; Star Systems International, Ltd. of Kwai Chung, Hong Kong; and STAR RFID Co., Ltd. of Bangkok, Thailand (collectively, “Respondents”) remain in the investigation. The Office of Unfair Import Investigations is also a party in this investigation.
All asserted claims of the '664 patent and certain asserted claims of the '044 patent and the '436 patent have been terminated from the investigation.
On June 22, 2017, the ALJ issued her final ID finding no violation of section 337 by the Respondents in connection with the Asserted Claims. The final ID found that all of the Asserted Claims are invalid on multiple grounds. Had the Asserted Claims not been found invalid, the final ID also found that the accused products infringe the Asserted Claims; that Neology's domestic industry products practice claim 25 of the '044 patent and claims 1, 2, and 4 of the '436 patent; and that Neology has satisfied the economic prong of the domestic industry requirement as to the '044 and the '436 patents.
Neology filed a timely petition for review of the final ID, challenging the final ID's finding that the Asserted Claims are invalid. That same day, the Commission's Investigative Attorney (“IA”) filed a contingent petition for review of the final ID and Respondents filed a joint contingent petition for review of the final ID. Neology and the IA both challenge certain of the final ID's findings with respect to the economic prong of the domestic industry requirement as to the '436 patent. Respondents also challenge the final ID's finding that the Asserted
On August 16, 2017, the Commission determined to review-in-part the final ID. Specifically, the Commission determined to review the following findings in the final ID: (1) The Asserted Claims are not entitled to claim priority to an earlier filing date; (2) the Asserted Claims are invalid under 35 U.S.C. 102, 103, and/or 112; (3) the Asserted Claims are not invalid under 35 U.S.C. 101; and (4) Neology has satisfied the economic prong of the domestic industry requirement with respect to the '436 patent. The Commission requested briefing from the parties on certain issues under review. The Commission did not solicit briefing from the parties and from the public on the issues of remedy, bonding, and the public interest.
Having reviewed the parties' submissions and the record evidence, the Commission has determined to affirm, with modified reasoning, the ID's finding of no violation of section 337 by the Respondents in connection with the Asserted Claims because Respondents have shown that the Asserted Claims are invalid under 35 U.S.C. 102, 103 and/or 112. The Commission has also determined to affirm with modifications the ID's finding that the Asserted Claims are not entitled to claim priority to an earlier filing date. The Commission has further determined to take no position on the ID's findings that the Asserted Claims are directed at patent eligible subject matter under 35 U.S.C. 101 and that Neology has satisfied the economic prong of the domestic industry requirement with respect to the '436 patent. A Commission opinion will be issued shortly.
The authority for the Commission's determination is contained in section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, and in Part 210 of the Commission's Rules of Practice and Procedure, 19 CFR part 210.
By order of the Commission.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the scheduling of the final phase of antidumping and countervailing duty investigation Nos. 701-TA-567-569 and 731-TA-1343-1345 (Final) pursuant to the Tariff Act of 1930 (“the Act”) to determine whether an industry in the United States is materially injured or threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of imports of silicon metal, provided for in subheadings 2804.69.1000 and 2804.69.5000 of the Harmonized Tariff Schedule of the United States, from Australia, Brazil, and Norway preliminarily determined by the Department of Commerce to be sold at less than fair value, and imports of silicon metal preliminarily determined to be subsidized by the governments of Australia, Brazil, and Kazakhstan.
October 12, 2017.
Lawrence Jones ((202) 205-3358), Office of Investigations, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of this phase of the investigations, hearing procedures, and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A and C (19 CFR part 207).
Additional written submissions to the Commission, including requests pursuant to section 201.12 of the Commission's rules, shall not be accepted unless good cause is shown for accepting such submissions, or unless the submission is pursuant to a specific request by a Commissioner or Commission staff.
In accordance with sections 201.16(c) and 207.3 of the Commission's rules, each document filed by a party to the investigations must be served on all other parties to the investigations (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
These investigations are being conducted under authority of title VII of the Tariff Act of 1930; this notice is published pursuant to section 207.21 of the Commission's rules.
By order of the Commission.
International Trade Commission.
Notice.
October 20, 2017.
Celia Feldpausch ((202) 205-2387)), Office of Investigations, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its Internet server (
On August 4, 2017, the Commission established a schedule for the conduct of full reviews (82 FR 37465, August 10, 2017). In light of overlapping Commission commitments, the Commission is revising its schedule in this proceeding.
The Commission's new schedule for the full reviews is as follows: The prehearing staff report will be placed in the nonpublic record on December 12, 2017; the deadline for filing prehearing briefs is December 21, 2017; requests to appear at the hearing must be filed with the Secretary to the Commission not later than December 22, 2017; the prehearing conference will be held at the U.S. International Trade Commission Building on January 3, 2018, if deemed necessary; the hearing will be held at the U.S. International Trade Commission Building at 9:30 a.m. on January 4, 2018; the deadline for filing posthearing briefs is January 12, 2018; the Commission will make its final release of information on February 5, 2018; and final party comments are due on February 7, 2018.
For further information concerning the full reviews see the Commission's notice cited above and the Commission's Rules of Practice and Procedure, part 201, subparts A through
These reviews are being conducted under authority of title VII of the Tariff Act of 1930; this notice is published pursuant to section 207.21 of the Commission's rules.
By order of the Commission.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the scheduling of the final phase of antidumping and countervailing duty investigation Nos. 701-TA-578 and 731-TA-1368 (Final) pursuant to the Tariff Act of 1930 (“the Act”) to determine whether an industry in the United States is materially injured or threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of imports of 100- to 150-seat large civil aircraft from Canada, provided for in subheading 8802.40.00 of the Harmonized Tariff Schedule of the United States, preliminarily determined by the Department of Commerce to be subsidized and sold at less-than-fair-value.
October 13, 2017.
Carolyn Carlson (202-205-3002) and Andrew Dushkes (202-205-3229), Office of Investigations, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of this phase of the investigations, hearing procedures, and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A and C (19 CFR part 207).
Additional written submissions to the Commission, including requests pursuant to section 201.12 of the Commission's rules, shall not be accepted unless good cause is shown for accepting such submissions, or unless the submission is pursuant to a specific request by a Commissioner or Commission staff.
In accordance with sections 201.16(c) and 207.3 of the Commission's rules, each document filed by a party to the investigations must be served on all other parties to the investigations (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
These investigations are being conducted under authority of title VII of the Tariff Act of 1930; this notice is published pursuant to section 207.21 of the Commission's rules.
By order of the Commission.
Office on Violence Against Women, Department of Justice.
30-day notice.
The Department of Justice, Office on Violence Against Women (OVW) will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the
Comments are encouraged and will be accepted for 30 days until November 27, 2017.
Written comments and/or suggestion regarding the items contained in this notice, especially the estimated public burden and associated response time, should be directed to Cathy Poston, Office on Violence Against Women, at 202-514-5430 or
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(1)
(2)
(3)
(4)
OVW is proposing revisions to the progress reporting form to reflect statutory changes as a result of the reauthorization of VAWA grant programs in 2013 which added seven new purpose areas: Developing and promoting legislation and policies to enhance best practices for responding to domestic violence, dating violence, sexual assault, and stalking; developing Sexual Assault Response Teams and related coordinated community responses to sexual assault; improving investigation and prosecution of sexual assault cases and appropriate treatment of victims; responding to sexual assault against men, women, and youth in correctional settings; responding to backlogs of sexual assault evidence including developing protocols and policies for notifying and involving victims; improving responses to male and female victims whose ability to access traditional services and responses is affected by their sexual orientation or gender identity; and supporting prevention or educational programming (limited to five percent of the award amount). The reauthorization also ensured that domestic violence, dating violence, sexual assault, and stalking are included in all the statutory purpose areas and added legal assistance in purpose area for “victim assistance”.
(5)
(6)
Office on Violence Against Women, Department of Justice.
30-day notice.
The Department of Justice, Office on Violence Against Women (OVW) will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the
Comments are encouraged and will be accepted for 30 days until November 27, 2017.
Written comments and/or suggestion regarding the items contained in this notice, especially the estimated public burden and associated response time, should be directed to Cathy Poston, Office on Violence Against Women, at 202-514-5430 or
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(1)
(2)
(3)
(4)
(5)
(6)
Office on Violence Against Women, Department of Justice.
30-day notice.
The Department of Justice, Office on Violence Against Women (OVW) will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the
Comments are encouraged and will be accepted for 30 days until November 27, 2017.
Written comments and/or suggestion regarding the items contained in this notice, especially the estimated public burden and associated response time, should be directed to Cathy Poston, Office on Violence Against Women, at 202-514-5430 or
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(1)
(2)
(3)
(4)
OVW is proposing revisions to the progress reporting form to reflect statutory changes as a result of the reauthorization of grant programs in 2013 which included permitting grant funds to support the provision of legal services and the addition of new strategies to address sexual assault and special needs of victims in remote areas including providing training for Community Health aides involved in Indian Health Services programs.
(5)
(6)
Office on Violence Against Women, Department of Justice.
30-day notice.
The Department of Justice, Office on Violence Against Women (OVW) will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the
Comments are encouraged and will be accepted for 30 days until November 27, 2017.
Written comments and/or suggestion regarding the items contained in this notice, especially the estimated public burden and associated response time, should be directed to Cathy Poston, Office on Violence Against Women, at 202-514-5430 or
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(1)
(2)
(3)
(4)
(5)
(6) An estimate of the total public burden (in hours) associated with the collection: The total annual hour burden to complete the annual progress report is 56 hours.
Office on Violence Against Women, Department of Justice.
30-day notice.
The Department of Justice, Office on Violence Against Women (OVW) will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the
Comments are encouraged and will be accepted for 30 days until November 27, 2017.
Written comments and/or suggestion regarding the items contained in this
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(1)
(2)
(3)
(4)
OVW is proposing revisions to the progress reporting form to reflect statutory changes as a result of the reauthorization of VAWA grant programs in 2013 which added nine new purpose areas: Training prosecutors; improving the response of the criminal justice system to immigrant victims; developing and promoting legislation and policies to enhance best practices for responding to domestic violence, dating violence, sexual assault, and stalking; developing Sexual Assault Forensic Examiner programs; developing Sexual Assault Response Teams or similar CCRs to sexual assault; improving investigation and prosecution of sexual assault and treatment of victims; providing HIV testing, counseling, and prophylaxis for victims; addressing sexual assault evidence backlogs including notifying and involving victims; and developing multi-disciplinary high-risk teams for reducing domestic violence and dating violence homicides.
(5)
(6)
The Bureau of International Labor Affairs, United States Department of Labor.
Notice; Request for information and invitation to comment.
This notice is a request for information and/or comment on three reports issued by the Bureau of International Labor Affairs (ILAB) regarding child labor and forced labor in certain foreign countries. Relevant information submitted by the public will be used by the Department of Labor (DOL) in preparation of its ongoing reporting under Congressional mandates and Presidential directive. The 2016 Findings on the Worst Forms of Child Labor report (TDA report), published on September 20, 2017, assesses efforts by 138 countries to reduce the worst forms of child labor over the course of 2016 and reports whether countries made significant, moderate, minimal, or no advancement during that year. It also suggests actions foreign countries can take to eliminate the worst forms of child labor through legislation, enforcement, coordination, policies, and social programs. The 2016 edition of the List of Goods Produced by Child Labor or Forced Labor (TVPRA List), published on September 30, 2016, makes available to the public a list of goods from countries that ILAB has reason to believe are produced by child labor or forced labor in violation of international standards. Finally, the List of Products Produced by Forced or Indentured Child Labor (EO List), most recently published on December 1, 2014, provides a list of products, identified by country of origin, that DOL, in consultation and cooperation with the Departments of State (DOS) and Homeland Security (DHS), have a reasonable basis to believe might have been mined, produced or manufactured
Submitters of information are requested to provide their submission to the Office of Child Labor, Forced Labor, and Human Trafficking (OCFT) at the email or physical address below by 5 p.m. January 12, 2018.
The portal includes instructions for submitting comments. Parties submitting responses electronically are encouraged not to submit paper copies.
Alexa Gunter, (202) 693-4829. Please see contact information above.
I. The Trade and Development Act of 2000 (TDA), Public Law 106-200 (2000), established eligibility criterion for receipt of trade benefits under the Generalized System of Preferences (GSP). The TDA amended the GSP reporting requirements of Section 504 of the Trade Act of 1974, 19 U.S.C. 2464, to require that the President's annual report on the status of internationally recognized worker rights include “findings by the Secretary of Labor with respect to the beneficiary country's implementation of its international commitments to eliminate the worst forms of child labor.”
The TDA Conference Report clarifies this mandate, indicating that the President consider the following when considering whether a country is complying with its obligations to eliminate the worst forms of child labor: (1) Whether the country has adequate laws and regulations proscribing the worst forms of child labor; (2) whether the country has adequate laws and regulations for the implementation and enforcement of such measures; (3) whether the country has established formal institutional mechanisms to investigate and address complaints relating to allegations of the worst forms of child labor; (4) whether social programs exist in the country to prevent the engagement of children in the worst forms of child labor, and to assist with the removal of children engaged in the worst forms of child labor; (5) whether the country has a comprehensive policy for the elimination of the worst forms of child labor; and (6) whether the country is making
DOL fulfills this reporting mandate through annual publication of the U.S. Department of Labor's Findings on the Worst Forms of Child Labor with respect to countries eligible for GSP. To access the 2016 TDA report and Frequently Asked Questions, please visit
II. Section 105(b) of the Trafficking Victims Protection Reauthorization Act of 2005 (“TVPRA of 2005”), Public Law 109-164 (2006), 22 U.S.C. 7112(b), directed the Secretary of Labor, acting through ILAB, to “develop and make available to the public a list of goods from countries that ILAB has reason to believe are produced by forced labor or child labor in violation of international standards” (TVPRA List).
Pursuant to this mandate, on December 27, 2007, DOL published in the
ILAB published its first TVPRA List on September 30, 2009, and issued updates in 2010, 2011, 2012, 2013, 2014, and 2016. (In 2014, ILAB began publishing the TVPRA List every other year, pursuant to changes in the law. See 22 U.S.C. 7112(b).) The next TVPRA List will be published in 2018. For a copy of previous editions of the TVPRA List, Frequently Asked Questions, and other materials relating to the TVPRA List, see ILAB's TVPRA Web page at
III. Executive Order No. 13126 (E.O. 13126) declared that it was “the policy of the United States Government . . . that the executive agencies shall take appropriate actions to enforce the laws prohibiting the manufacture or importation of goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part by forced or indentured child labor.” Pursuant to E.O. 13126, and following public notice and comment, the Department of Labor published in the January 18, 2001,
Pursuant to Sections D through G of the Procedural Guidelines, the EO List may be updated through consideration of submissions by individuals or through OCFT's own initiative.
DOL has officially revised the EO List four times, most recently on December 1, 2014, each time after public notice and comment as well as consultation with DOS and DHS.
The current EO List, Procedural Guidelines, and related information can be accessed on the Internet at
Information Requested and Invitation to Comment: Interested parties are invited to comment and provide information regarding these reports. DOL requests comments on or information relevant to maintaining and updating the TVPRA and EO Lists, updating the findings and suggested government actions for countries reviewed in the TDA report, and assessing each country's individual advancement toward eliminating the worst forms of child labor during the current reporting period compared to previous years. For more information on the types of issues covered in the TDA report, please see Appendix III of the report. Materials submitted should be confined to the specific topics of the TVPRA List, EO List, and TDA report. DOL will generally consider sources with dates up to five years old (
This notice is a general solicitation of comments from the public.
National Archives and Records Administration (NARA).
Notice of proposed extension request.
NARA proposes to request an extension from the Office of Management and Budget (OMB) of approval to collect information from individuals requesting a research card. People must have a research card to use original archival records in a NARA facility. We invite you to comment on certain aspects of this proposed information collection.
We must receive written comments on or before December 26, 2017.
Send comments to Paperwork Reduction Act Comments (MP), Room 4100, National Archives and Records Administration, 8601 Adelphi Road, College Park, MD 20740-6001, or email them to
Contact Tamee Fechhelm by telephone at 301-837-1694, or by email at
We invite the public and other Federal agencies to comment on information collections we propose to renew. We submit proposals to renew information collections first through a public comment period and then to OMB for review and approval pursuant to the Paperwork Reduction Act of 1995 (PRA; 44 U.S.C. 3501
National Endowment for the Humanities.
Notice of meeting.
Pursuant to the Federal Advisory Committee Act, notice is hereby given that the National Council on the Humanities will meet to advise the Chairman of the National Endowment for the Humanities (NEH) with respect to policies, programs and procedures for carrying out his functions; to review applications for financial assistance under the National Foundation on the Arts and Humanities Act of 1965 and make recommendations thereon to the Chairman; and to consider gifts offered to NEH and make recommendations thereon to the Chairman.
The meeting will be held on Thursday, November 16, 2017, from 10:30 a.m. until 12:30 p.m., and Friday, November 17, 2017, from 9:00 a.m. until adjourned.
The meeting will be held at Constitution Center, 400 7th Street SW., Washington, DC 20506.
Elizabeth Voyatzis, Committee Management Officer, 400 7th Street SW., 4th Floor, Washington, DC 20506; (202) 606-8322;
The National Council on the Humanities is meeting pursuant to the National Foundation on the Arts and Humanities Act of 1965 (20 U.S.C. 951-960, as amended). The Committee meetings of the National Council on the Humanities will be held on November 16, 2017, as follows: The policy discussion session (open to the public) will convene at 10:30 a.m. until approximately 11:00 a.m., followed by the discussion of specific grant applications and programs before the Council (closed to the public) from 11:00 a.m. until 12:30 p.m. The following Committees will meet in the NEH offices:
Digital Humanities.
Education Programs.
Federal/State Partnership.
Preservation and Access/Challenge Grants.
Public Programs.
Research Programs.
The plenary session of the National Council on the Humanities will convene on November 17, 2017, at 9:00 a.m. in the Conference Center at Constitution Center. The agenda for the morning session (open to the public) will be as follows:
The remainder of the plenary session will be for consideration of specific applications and therefore will be closed to the public.
As identified above, portions of the meeting of the National Council on the Humanities will be closed to the public pursuant to sections 552b(c)(4), 552b(c)(6) and 552b(c)(9)(b) of Title 5 U.S.C., as amended. The closed sessions will include review of personal and/or proprietary financial and commercial information given in confidence to the agency by grant applicants, and discussion of certain information, the premature disclosure of which could significantly frustrate implementation of proposed agency action. I have made this determination pursuant to the authority granted me by the Chairman's Delegation of Authority to Close Advisory Committee Meetings dated April 15, 2016.
Please note that individuals planning to attend the public sessions of the meeting are subject to security screening procedures. If you wish to attend any of the public sessions, please inform NEH as soon as possible by contacting Ms. Katherine Griffin at (202) 606-8322 or
National Science Foundation.
Notice of permit applications received.
The National Science Foundation (NSF) is required to publish a notice of permit applications received to conduct activities regulated under the Antarctic Conservation Act of 1978. NSF has published regulations under the Antarctic Conservation Act in the Code of Federal Regulations. This is the required notice of permit applications received.
Interested parties are invited to submit written data, comments, or views with respect to this permit application by November 27, 2017. This application may be inspected by interested parties at the Permit Office, address below.
Comments should be addressed to Permit Office, Office of Polar Programs, National Science Foundation, 2415 Eisenhower Avenue, Alexandria, Virginia 22314.
Nature McGinn, ACA Permit Officer, at the above address, 703-292-8030, or
The National Science Foundation, as directed by the Antarctic Conservation Act of 1978 (Pub. L. 95-541, 45 CFR 670), as amended by the Antarctic Science, Tourism and Conservation Act of 1996, has developed regulations for the establishment of a permit system for various activities in Antarctica and designation of certain animals and certain geographic areas a requiring special protection. The regulations establish such a permit system to designate Antarctic Specially Protected Areas.
Enter Antarctic Specially Protected Areas. The application proposes to enter four Antarctic Specially Protected Areas (ASPAs) on King George Island, South Shetland Islands, Antarctica for the purposes of collecting small sediment samples from freshwater lakes and ephemeral ponds. The applicant would enter ASPA 125, Fildes Peninsula; ASPA 132, Potter Peninsula; ASPA 150, Ardley Island, Maxwell Bay; and ASPA 171 Narebski Point, Barton Peninsula. The applicant plans to access the ASPAs by boat and on foot. Up to six sediment samples will be collected near the shoreline or from an inflatable boat from each of up to eight lakes and eight ephemeral ponds in total. Sediment core samples may be taken through holes drilled in the ice cover, as applicable. The applicant and agents will adhere to the management plans for each of the ASPAs that they propose to enter.
King George Island, South Shetland Islands, Antarctica; ASPA 125, Fildes Peninsula; ASPA 132, Potter Peninsula; ASPA 150, Ardley Island, Maxwell Bay; and ASPA 171 Narebski Point, Barton Peninsula.
January 23, 2018-March 1, 2019.
National Science Foundation.
Notice of permit applications received.
The National Science Foundation (NSF) is required to publish a notice of permit applications received to conduct activities regulated under the Antarctic Conservation Act of 1978. NSF has published regulations under the Antarctic Conservation Act in the Code of Federal Regulations. This is the required notice of permit applications received.
Interested parties are invited to submit written data, comments, or views with respect to this permit application by November 27, 2017. This application may be inspected by interested parties at the Permit Office, address below.
Comments should be addressed to Permit Office, Office of Polar Programs, National Science Foundation, 2415 Eisenhower Avenue, Alexandria, Virginia 22314.
Nature McGinn, ACA Permit Officer, at
The National Science Foundation, as directed by the Antarctic Conservation Act of 1978 (Pub. L. 95-541, 45 CFR 671), as amended by the Antarctic Science, Tourism and Conservation Act of 1996, has developed regulations for the establishment of a permit system for various activities in Antarctica and designation of certain animals and certain geographic areas requiring special protection. The regulations establish such a permit system to designate Antarctic Specially Protected Areas.
Waste Management. The applicant is seeking a permit for waste management activities associated with an atmospheric research study over the Southern Ocean. The applicant proposes to release up to 30 expendable weather reconnaissance devices, dropsondes, from a Gulfstream V research aircraft while flying between 60 and 65 degrees south. Each dropsonde consists of a 12-inch long, 2-inch diameter resin tube containing a lead-free circuit board, plastic components, and small lithium batteries with a small parachute attached.
Southern Ocean, south of Hobart, Tasmania.
January 15-February 26, 2018.
The ACRS Subcommittee on Planning and Procedures will hold a meeting on November 1, 2017, 11545 Rockville Pike, Room T-2B3, Rockville, Maryland 20852.
The meeting will be open to public attendance.
The agenda for the subject meeting shall be as follows:
The Subcommittee will discuss proposed ACRS activities and related matters. The Subcommittee will gather information, analyze relevant issues and facts, and formulate proposed positions and actions, as appropriate, for deliberation by the Full Committee.
Members of the public desiring to provide oral statements and/or written comments should notify the Designated Federal Official (DFO), Quynh Nguyen (Telephone 301-415-5844 or Email:
Information regarding changes to the agenda, whether the meeting has been canceled or rescheduled, and the time allotted to present oral statements can be obtained by contacting the identified DFO. Moreover, in view of the possibility that the schedule for ACRS meetings may be adjusted by the Chairman as necessary to facilitate the conduct of the meeting, persons planning to attend should check with the DFO if such rescheduling would result in a major inconvenience.
If attending this meeting, please enter through the One White Flint North building, 11555 Rockville Pike, Rockville, Maryland 20852. After registering with Security, please contact Mr. Theron Brown at 240-888-9835 to be escorted to the meeting room.
Nuclear Regulatory Commission.
Exemption; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is issuing an exemption in response to an October 28, 2016, request from Dominion Nuclear Connecticut, Inc. (the licensee, Dominion) for Millstone Power Station, Unit No. 2 (Millstone 2), Docket No. 50-336, for the use of operator manual actions (OMAs) in lieu of meeting the circuit separation and protection requirements for four plant fire areas.
The exemption was issued on October 24, 2017.
Please refer to Docket ID NRC-2017-0197 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:
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Richard Guzman, Office of Nuclear
Dominion is the holder of Renewed Facility Operating License No. DPR-65, which authorizes operation of Millstone 2. The license provides, among other things, that the facility is subject to all rules, regulations, and orders of the NRC, now or hereafter in effect.
Millstone 2 shares the site with Millstone Power Station, Unit No. 1, a permanently defueled boiling-water reactor nuclear unit, and Millstone Power Station, Unit No. 3, a pressurized-water reactor. The facility is located in Waterford, Connecticut, approximately 3.2 miles southwest of New London, Connecticut. This exemption applies to Millstone 2 only. The other units, Millstone 1 and 3, are not part of this exemption.
Section 50.48 of title 10 of the
By letter dated October 28, 2016 (ADAMS Accession No. ML16305A330), the licensee requested an exemption for Millstone 2 from certain technical requirements of 10 CFR part 50, appendix R, section III.G.2 (III.G.2), for the use of OMAs in lieu of meeting the circuit separation and protection requirements contained in section III.G.2 for fire areas R-9, R-10, R-13, and R-14.
Pursuant to § 50.12, the Commission may, upon application by any interested person or upon its own initiative, grant exemptions from the requirements of 10 CFR part 50 when the exemptions are authorized by law, will not present an undue risk to public health or safety, and are consistent with the common defense and security. However, § 50.12(a)(2) states that the Commission will not consider granting an exemption unless special circumstances are present as set forth in § 50.12(a)(2). Under § 50.12(a)(2)(ii), special circumstances are present when application of the regulation in the particular circumstances would not serve, or is not necessary to achieve, the underlying purpose of the rule.
The licensee stated that special circumstances are present in that the application of the regulation in this particular circumstance is not necessary to achieve the underlying purpose of the rule, which is consistent with the language included in § 50.12(a)(2)(ii). The licensee further stated that the OMAs included in the exemption request provide assurance that one train of systems necessary to achieve and maintain hot shutdown will remain available in the event of a fire.
In accordance with § 50.48(b), nuclear power plants licensed before January 1, 1979, are required to meet section III.G. The underlying purpose of section III.G is to ensure that the ability to achieve and maintain safe shutdown is preserved following a fire event. The regulation intends for licensees to accomplish this by extending the concept of defense-in-depth (DID) to:
a. Prevent fires from starting;
b. Rapidly detect, control, and extinguish promptly those fires that do occur;
c. Provide protection for structures, systems, and components (SSCs) important to safety so that a fire that is not promptly extinguished by the fire suppression activities will not prevent the safe shutdown of the plant.
The stated purpose of section III.G.2 is to ensure that in the event of a fire, one of the redundant trains necessary to achieve and maintain hot shutdown conditions remains free of fire damage. Section III.G.2 requires one of the following means to ensure that a redundant train of safe shutdown cables and equipment is free of fire damage where redundant trains are located in the same fire area outside of primary containment:
a. Separation of cables and equipment by a fire barrier having a 3-hour rating;
b. Separation of cables and equipment by a horizontal distance of more than 20 feet with no intervening combustibles or fire hazards and with fire detectors and an automatic fire suppression system installed in the fire area; or
c. Enclosure of cables and equipment of one redundant train in a fire barrier having a 1-hour rating and with fire detectors and an automatic fire suppression system installed in the fire area.
The licensee stated that the OMAs addressed in the exemption request are those contained in the Millstone 2 10 CFR part 50, appendix R compliance report (report). The licensee also stated that the Millstone 2 appendix R report was submitted to the NRC for review on May 29, 1987 (ADAMS Legacy Accession No. 8706120088), and found acceptable by an NRC safety evaluation report (SER) dated July 17, 1990 (ADAMS Accession No. ML012880391). However, the SER did not specifically evaluate the OMAs (
By letter dated June 30, 2011 (ADAMS Accession No. ML11188A213), as revised by letter dated October 29, 2012 (ADAMS Accession No. ML12318A128), the licensee submitted an exemption request for the OMAs contained in the Millstone 2 appendix R report. However, four OMAs related to loss of instrument air for four specific fire areas were removed by letter dated February 29, 2012 (ADAMS Accession No. ML12069A016) because the loss of instrument air was not considered a postulated event. The NRC approved the revised exemption by NRC letter dated December 18, 2012 (ADAMS Accession No. ML12312A373).
During the 2016 triennial fire inspection (ADAMS Accession No. ML16258A175), it was identified that a loss of offsite power will result in a loss of instrument air prior to the emergency diesel generators starting. Since instrument air does not automatically restart, nor can it be manually started from the control room, the licensee has submitted this exemption request for those four OMAs related to loss of instrument air for the four specific fire areas.
Each OMA included in this review consists of a sequence of tasks to be performed in various fire areas upon confirmation of a fire in a particular fire area. Table 1 lists the OMAs included in this review (OMAs are listed in the order they are conducted for a fire originating in a particular area). Some OMAs are listed more than once if they are needed for fires that originate in different areas.
The designations Z1 and Z2 are used throughout this exemption. The licensee stated that the 4.16 kilovolt (kV) subsystems are divided into two specific “facilities.” Facility Z1 powers one train of engineered safety features (ESFs) and is provided with an emergency power supply by the “A” emergency diesel generator (EDG). Facility Z2 powers a redundant second train of ESF and is provided with an emergency power supply by the “B” EDG. The licensee also stated that vital power and control cables fall mainly into two redundancy classifications: Channel Z1 and Channel Z2, and that in a few cases, there is also a Channel Z5, which is a system that can be transferred from one source to another. The licensee further stated that Facility Z1 would be synonymous with “A” train, while Facility Z2 would be synonymous with “B” train.
The licensee stated that its exemption request is provided in accordance with the information contained in NRC Regulatory Issue Summary 2006-10, “Regulatory Expectations with Appendix R Paragraph III.G.2 Operator Manual Actions,” dated June 30, 2006, which states that an approved § 50.12 exemption is required for all OMAs, even those accepted in a previously issued NRC SER.
As indicated above, the licensee has requested an exemption from the requirements of section III.G.2 for Millstone 2 to the extent that one of the redundant trains of systems necessary to achieve and maintain hot shutdown is not maintained free of fire damage in accordance with one of the required means for a fire occurring in the following fire areas:
• R-9 Facility Z1 DC switchgear room and battery room,
• R-10 Facility Z2 DC switchgear room and battery room;
• R-13 west 480 VAC switchgear room;
• R-14 Facility Z1 lower 4.16kV switchgear room and cable vault.
The licensee stated that the OMAs are credited for the section III.G.2 deficiencies, such as having only a single safe shutdown train, lack of separation between redundant trains, lack of detection and automatic suppression in the fire area, or a combination of those deficiencies. The NRC staff notes that having only a single safe shutdown train is not uncommon to this plant design. Single train systems at Millstone 2 include IA, “A” and “B” boric acid storage tank (BAST) control room (CR) level indication, condensate storage tank (CST) CR level indication, suction-side flow to the charging pumps from the refueling water storage tank (RWST), auxiliary spray to the pressurizer, and charging pump discharge to the reactor coolant system (RCS).
The licensee also stated that it has evaluated and modified all motor-operated valves (MOVs) relied upon by OMAs consistent with NRC Information Notice 92-18, “Potential for Loss of Remote Shutdown Capability During a Control Room Fire,” dated February 28, 1992, which details the potential for fires to damage MOVs that are required for safe shutdown so that they can no longer be remotely or manually operated, and that as a result of this evaluation and modifications, the possibility that the desired result was not obtained is minimized. The licensee further stated that all the equipment operated to perform these OMAs is not fire affected and, therefore, is reasonably expected to operate as designed.
In its submittals, the licensee described elements of its FPP that provide its justification that the concept of DID in place in the above fire areas is consistent with that intended by the regulation. To accomplish this, the licensee utilizes various protective measures to accomplish the concept of DID. Specifically, the licensee stated that the purpose of its request was to credit the use of OMAs, in conjunction with other DID features, in lieu of the separation and protective measures required by 10 CFR part 50, appendix R, section III.G.2.
The licensee indicated that its FPP uses the concept of DID, both procedurally and physically, to meet the following objectives:
1. Prevent fires from starting;
2. Rapidly detect, control, and extinguish promptly those fires that do occur; and
3. Provide protection for SSCs important to safety so that a fire that is not promptly extinguished by the fire suppression activities will not prevent the safe shutdown of the plant.
The licensee provided an analysis that described how fire prevention is addressed for each of the fire areas for which the OMAs may be required. Unless noted otherwise below, all of the fire areas included in this exemption have a combustible fuel load that is considered to be low, with fuel sources consisting primarily of fire-retardant cable insulation and limited floor-based combustibles. There are no high energy ignition sources located in the areas except as noted in fire area R-14. The fire areas included in the exemption request are not shop areas, so hot work activities are infrequent with administrative control (
The licensee stated that the storage of combustibles is administratively controlled by the site's FPP procedures to limit the effects of transient fire exposures on the plant and in addition, hot work (
The licensee also stated that the integration of the program, personnel, and procedures, which are then collectively applied to the facility, reinforce the DID aspect of the FPP and that strict enforcement of ignition source and transient combustible control activities (through permitting) and monthly fire prevention inspections by the site fire marshal ensure that this work is actively monitored to prevent fires.
The licensee stated that the Millstone fire brigade consists of a minimum of a Shift Leader and four fire brigade personnel. The affected unit (Millstone 2 or Millstone 3) supplies an advisor, who is a qualified Plant Equipment Operator (PEO). The advisor provides direction and support concerning plant operations and priorities. Members of the fire brigade are trained in accordance with Millstone procedures. Fire brigade personnel are responsible for responding to all fires, fire alarms, and fire drills. To ensure availability, a minimum of a Shift Leader and four fire brigade personnel remain in the owner-controlled area and do not engage in any activity that would require a relief in order to respond to a fire. The licensee further stated that the responding fire brigade lead may request the Shift Manager augment the on-shift five-member fire brigade with outside resources from the Town of Waterford Fire Department, which has a letter of agreement with Millstone, to respond to the site (when requested) in the event of a fire emergency or rescue and will attempt to control the situation with available resources.
Millstone 2 has been divided into fire areas, as described in the Millstone FPP. Three-hour fire barriers are normally used to provide fire resistive separation between adjacent fire areas. In some cases, barriers with a fire resistance rating of less than 3 hours are credited, but exemptions have been approved, or engineering evaluations performed, in accordance with Generic Letter (GL) 86-10, “Implementation of Fire Protection Requirements,” to demonstrate that the barriers are sufficient for the hazard. Walls separating rooms within fire areas are typically constructed of concrete. The licensee stated that in general, fire-rated assemblies separating appendix R fire areas meet Underwriters Laboratories/Factory Mutual (UL/FM) design criteria and the requirements of American Society of Testing Materials (ASTM) E-119, “Fire Tests of Building Construction and Materials,” for 3-hour rated fire assemblies. The licensee also stated that openings created in fire-rated assemblies are sealed utilizing penetration seal details that have been tested in accordance with ASTM E-119 and are qualified for a 3-hour fire rating. In addition, fireproof coating of structural steel conforms to UL-listed recognized details and is qualified for a 3-hour fire rating. The licensee further stated that fire dampers are UL-listed and have been installed in accordance with the requirements of National Fire Protection Association (NFPA) 90A, “Standard for the Installation of Air-Conditioning and Ventilation Systems,” and that the code of record for fire dampers is either the version in effect at the time of original plant construction (late 1960s) or the 1985 edition. The licensee further stated that fire doors are UL-listed and have been installed in accordance with NFPA 80, “Standard for Fire Doors and Windows,” in effect in the late 1960s, at the time of plant construction.
The licensee provided a discussion of the impacts of any GL 86-10 evaluations and/or exemptions on the fire areas included in this exemption request. For all the areas with GL 86-10 evaluations and/or other exemptions, the licensee stated that none of the issues addressed by the evaluations would adversely impact, through the spread of fire or products of combustion, plant areas where OMAs are performed or the respective travel paths necessary to reach these areas. The licensee also stated that there are no adverse impacts on the ability to perform OMAs and that the conclusions of the GL 86-10 evaluations and the exemption requests would remain valid with the OMAs in place. In addition to these boundaries, the licensee provided a hazard analysis that described how detection, control, and extinguishment of fires are addressed for each of the fire areas for which the OMAs may be needed.
Unless noted otherwise below, fire areas are provided with ionization smoke detectors. The licensee stated that the smoke and heat detection systems were designed and installed using the guidance of the requirements set forth in several NFPA standards, including the 1967, 1979, and 1986 Editions of NFPA 72D, “Standard for the Installation, Maintenance and Use of Proprietary Protective Signaling Systems for Watchman, Fire Alarm and Supervisory Service,” and the 1978 and 1984 Editions of NFPA 72E, “Standard on Automatic Fire Detectors.” Upon detecting smoke or fire, the detectors initiate an alarm in the CR enabling fire brigade response. The licensee stated that in most cases, no automatic fire suppression systems are provided in the areas included in this exemption request except for plant areas with significant quantities of combustibles, such as lube oil. Automatic fire suppression systems have also been installed in areas with 1-hour barrier walls and 1-hour rated electrical raceway encapsulation.
The licensee stated that fire suppression systems were designed in general compliance with, and to meet the intent of, the requirements of several NFPA standards, depending on the type of system, including the 1985 Edition of NFPA 13, “Standard for the Installation of Sprinkler Systems”; the 1985 Edition of NFPA 15, “Standard for Water Spray Fixed Systems For Fire Protection”; and the 1987 Edition of NFPA 12A, “Standard on Halon 1301 Fire Extinguishing Systems.”
The licensee stated that, in general, fire extinguishers and hose stations have been installed in accordance with the requirements of the 1968 Edition of NPFA 10, “Standard for the Installation of Portable Fire Extinguishers,” and the 1978 Edition of NFPA 14, “Standard for the Installation of Standpipe and Hose Systems,” respectively. The licensee stated that Equipment Operators are trained fire brigade members and would likely identify and manually suppress or extinguish a fire using the portable fire extinguishers and manual hose stations located either in or adjacent to, or both, these fire areas.
Each of the fire areas included in this exemption is analyzed below with regard to how the concept of DID is achieved for each area and the role of
The licensee stated that the area has low combustible loading that predominantly consists of cable insulation, and that potential ignition sources include electrical faults.
The licensee stated that the area is provided with a cross-zoned ionization and photoelectric smoke detection system that activates a total flooding Halon 1301 fire suppression system and that the Halon 1301 suppression system has manual release stations at each doorway and an abort switch located at the doorway to the east CR/cable vault stairway. The licensee also stated that this system alarms locally at the Halon control panel and at the main fire alarm panel in the CR. The licensee further stated that duct smoke detection is provided between this area, the “B” (west) DC equipment room (fire hazard analysis (FHA) Zone A-21), and the auxiliary building cable vault (FHA Zone A-24) and that this system alarms at a local panel and at the main fire alarm panel in the CR. The licensee further stated that a fire in the area that could potentially impact any cables of concern would likely involve cable insulation resulting from an electrical fault or failure of a bus or electrical panel located in the room and that combustibles in this area consist predominantly of Institute of Electrical and Electronics Engineers (IEEE) 383 qualified cable insulation or cable that has been tested and found to have similar fire resistive characteristics. The licensee further stated that since there is a minimal amount of Class A combustibles in this area, there is little chance of a fire occurring outside of a bus/electrical panel failure, which could act as a pilot ignition source for the cable insulation and that a bus/electrical panel failure normally results in a high intensity fire that lasts for a short duration, which makes it unlikely that it will cause sustained combustion of IEEE 383 qualified cables. The licensee further stated that in the unlikely event of a fire in this area, it would be rapidly detected by the cross-zoned ionization and photoelectric smoke detection smoke detection system, subsequently extinguished by the total flooding Halon 1301 suppression system, and the smoke detection system would also aid in providing prompt fire brigade response.
The licensee stated that the OMAs associated with a fire in the area are related to a loss of IA or a loss of power to the “A” DC buses (such as DV10) and that cables for valves 2-CH-192, 2-CH-508, and 2-CH-509 do not pass through this room.
The licensee stated that a fire in the area will affect all Facility Z1 shutdown components that Facility Z2 is used to achieve and maintain Hot Standby, and that plant shutdown to Hot Standby can be accomplished using an abnormal operating procedure (AOP).
The licensee stated that OMAs 1 and 11 are credited for a fire originating in Fire Area R-9 in order to provide decay heat removal and restore charging system flow to RCS in the event of cable damage or loss of IA.
The licensee stated that establishing AFW flow to the credited steam generator (SG) is required to be accomplished within 45 minutes and that the required flow path utilizes the turbine driven auxiliary feedwater (TDAFW) pump. The licensee also stated that prior to AFW initiation, the plant is placed in the Hot Standby condition by steaming through the main steam safety valves (MSSVs) and that after AFW is established from the CR, operation of the atmospheric dump valve (ADV) (2-MS-190B) (OMA 11) is the required method of removing decay heat to maintain Hot Standby and transition to Cold Shutdown. The licensee further stated that there is no cable damage from fire to the required ADV (2-MS-190B); however, the fire may cause a loss of IA, which is required to operate the ADVs to support decay heat removal. The licensee stated that upon a loss of air, the ADV will fail closed and that this design prevents excessive RCS cooldown prior to AFW start; therefore, in the event of a loss of IA, Operators will establish local manual control of 2-MS-190B after AFW flow is established. The licensee further stated that PEO-2 will remain with the ADV to modulate steam flow per direction from the CR and that after restoration of the charging system, the BASTs are credited for maintaining RCS inventory and that the BASTs have a minimum level specified in the technical requirements manual (TRM), which ensures 72 minutes of flow. The licensee further stated that once the BASTs are depleted, Operators switch over to the RWST. The licensee further stated that due to fire damage, the 2-CH-192 valve may spuriously close and in order to establish the RWST as the suction path for the charging system, an OMA is required to open valve 2-CH-192 (OMA 1) prior to BAST depletion. OMA 1 establishes the RWST as the suction supply for the charging system and is not conducted until after AFW is established.
AFW flow is established from the CR within the required 45-minute time period. Should IA be lost, the OMA to continue decay heat removal can be conducted beginning 17 minutes after AFW flow is established? The OMA to establish charging system flow from the RWST prior to BAST depletion can be completed in 32 minutes, which provides a 40-minute margin, since the required completion time is 72 minutes.
Given the limited amount of combustible materials and ignition sources and installed detection and suppression, it is unlikely that a fire would occur and go undetected or unsuppressed by the personnel and damage the safe shutdown equipment. The low likelihood of damage to safe shutdown equipment due to a fire in this area, combined with the ability of the OMAs to manipulate the plant in the event of a fire that damages safe shutdown equipment and to be completed with more than 30 minutes of margin, provides adequate assurance that safe shutdown capability is maintained.
The licensee stated that the area has low combustible loading that predominantly consists of cable insulation, and that potential ignition sources include electrical faults.
The licensee stated that the area is provided with a cross-zoned ionization and photoelectric smoke detection system that activates a total flooding Halon 1301 fire suppression system and that the Halon 1301 suppression system has manual release stations at each
The licensee stated that the OMAs associated with a fire in the area are related to loss of power to the “B” AC vital power panels (such as VA20) and that cables for level transmitters LT-206, LT-208, and LT-5282 do not pass through this room.
The licensee stated that a fire in the area will affect all Facility Z2 shutdown components that Facility Z1 is used to achieve and maintain Hot Standby, and that plant shutdown to Hot Standby can be accomplished using an AOP.
The licensee stated that OMAs 1 and 10 are credited for a fire originating in R-10 to provide decay heat removal and restore charging system flow to RCS in the event of cable damage or loss of IA.
The licensee stated that establishing AFW flow to the credited SG is required to be accomplished within 45 minutes and that the required flow path utilizes the TDAFW pump. The licensee also stated that prior to AFW initiation, the plant is placed in the Hot Standby condition by steaming through the MSSVs and that after AFW is established from the CR, operation of the ADV (2-MS-190A) (OMA 10) is the required method of removing decay heat to maintain Hot Standby and transition to Cold Shutdown. The licensee further stated that there is no cable damage from fire to the required ADV (2-MS-190A); however, the fire may cause a loss of IA which is required to operate the ADVs to support decay heat removal. The licensee stated that upon a loss of air, the ADV will fail closed and that this design prevents excessive RCS cooldown prior to AFW start and, therefore, in the event of a loss of IA, Operators will establish local manual control of 2-MS-190A after AFW flow is established. The licensee further stated that PEO-1 will remain with the ADV to modulate steam flow per direction from the CR and that after restoration of the charging system, the BASTs are credited for maintaining RCS inventory and that the BASTs have a minimum level specified in the TRM which ensures 72 minutes of flow. The licensee further stated that once the BASTs are depleted, Operators switch over to the RWST. The licensee further stated that due to fire damage, the 2-CH-192 valve may spuriously close and that in order to establish the RWST as the suction path for the charging system, an OMA is required to open valve 2-CH-192 (OMA 1) prior to BAST depletion. OMA 1 establishes the RWST as the suction supply for the charging system and is not conducted until after AFW is established.
AFW flow is established from the CR within the required 45-minute time period and should IA be lost, the OMA to continue decay heat removal can be conducted beginning 17 minutes after AFW flow is established. The OMA to establish charging system flow from the RWST prior to BAST depletion can be completed in 24 minutes, which provides a 48-minute margin, since the required completion time is 72 minutes.
Given the limited amount of combustible materials and ignition sources and installed detection and suppression, it is unlikely that a fire would occur and go undetected or unsuppressed by the personnel and damage the safe shutdown equipment. The low likelihood of damage to safe shutdown equipment due to a fire in this area, combined with the ability of the OMAs to manipulate the plant in the event of a fire that damages safe shutdown equipment and to be completed with more than 30 minutes of margin, provides adequate assurance that safe shutdown capability is maintained.
The licensee stated that the area has low combustible loading that predominantly consists of cable insulation and that potential ignition sources include electrical faults.
The licensee stated that the area is provided with ionization smoke detection that alarms at the main fire alarm panel in the CR. The licensee also stated that a fire in the area that could potentially impact any cables of concern would likely involve cable insulation resulting from an electrical fault or a bus failure and that combustibles in the area consist predominantly of IEEE 383 qualified cable insulation or cable that has been tested and found to have similar fire resistive characteristics. The licensee further stated that since there is a minimal amount of Class A combustibles in this area, there is little chance of a fire occurring outside of a bus failure, which could act as a pilot ignition source for the cable insulation, and that a bus failure normally results in a high intensity fire that lasts for a short duration, which makes it unlikely that it will cause sustained combustion of IEEE 383 qualified cables. The licensee further stated that in the unlikely event of a fire, it would be rapidly detected by the ionization smoke detection system installed in the area and that the smoke detection system will aid in providing prompt fire brigade response.
The licensee stated that the components of concern for the area are
The licensee stated that a fire in the area will affect Facility Z1 safe shutdown equipment, the “A” EDG will be unavailable due to a loss of the Facility Z1 power supply for the diesel room ventilation fan F38A, Facility Z2 is used to achieve and maintain Hot Standby, and plant shutdown to Hot Standby can be accomplished using an AOP.
The licensee stated that OMAs 1, 9, and 11 are credited for a fire originating in Fire Area R-13 in order to provide decay heat removal and restore charging system flow to RCS in the event of cable damage or loss of IA.
The licensee stated that establishing AFW flow to the credited SG is required to be accomplished within 45 minutes and that the required flow path utilizes the TDAFW pump. The licensee also stated that prior to AFW initiation, the plant is placed in the Hot Standby condition by steaming through the MSSVs and that after AFW is established from the CR, operation of the ADV (2-MS-190B) (OMA 11) is the required method of removing decay heat to maintain Hot Standby and transition to Cold Shutdown. The licensee further stated that there is no cable damage from fire to the required ADV (2-MS-190B); however, the fire may cause a loss of IA, which is required to operate the ADVs to support decay heat removal. The licensee stated that upon a loss of air, the ADV will fail closed and that this design prevents excessive RCS cooldown prior to AFW start and, therefore, in the event of a loss of IA, Operators will establish local manual control of 2-MS-190B after AFW flow is established. The licensee further stated that PEO-2 will remain with the ADV to modulate steam flow per direction from the CR and that after restoration of the charging system, the BASTs are credited for maintaining RCS inventory and that the BASTs have a minimum level specified in the TRM, which ensures 72 minutes of flow.
The licensee stated that a loss of IA or power causes AFW flow control valve 2-FW-43B to fail open. However, the licensee also stated that the circuit can be isolated and controlled from Fire Shutdown Panel C-10. Therefore, OMA 9 is required to isolate the damaged cables and operate the TDAFW turbine speed control to maintain level in the SG with AFW flow control valve 2-FW-43B failed open. After AFW flow is established, the licensee stated that the steam release path from the SG may be switched from the MSSVs to ADV 2-MS-190B using OMA 11, which will require local manual operation of the valve. The license further stated that in the event that IA is not lost, ADV 2-MS-190B and AFW flow control valve 2-FW-43B can be operated from Fire Shutdown Panel C-10.
The licensee further stated that once the BASTs are depleted, Operators switch over to the RWST. The licensee further stated that due to fire damage, the 2-CH-192 valve may spuriously close and that in order to establish the RWST as the suction path for the charging system, an OMA is required to open valve 2-CH-192 (OMA 1) prior to BAST depletion. OMA 1 establishes the RWST as the suction supply for the charging system and is not conducted until after AFW is established which takes 17 minutes.
The licensee stated that the OMA for restoring charging (OMA 1) requires 32 minutes to complete and that the available time is 72 minutes, which results in 40 minutes of margin. The licensee also stated that the OMA for establishing AFW from Fire Shutdown Panel C-10 (OMA 9) requires 10 minutes to complete and that the time available is 45 minutes, leaving a margin of 35 minutes. AFW flow is established from the CR within the required 45-minute time period and should IA be lost, the OMA to continue decay heat removal can be conducted beginning 17 minutes after AFW flow is established (OMA 11).
Given the limited amount of combustible materials and ignition sources and installed detection, it is unlikely that a fire would occur and go undetected or unsuppressed by the personnel and damage the safe shutdown equipment. The low likelihood of damage to safe shutdown equipment due to a fire in this area, combined with the ability of the OMAs to manipulate the plant in the event of a fire that damages safe shutdown equipment and to be completed with more than 30 minutes of margin, provides adequate assurance that safe shutdown capability is maintained.
The licensee stated that the areas have low combustible loading that predominantly consists of cable insulation and Thermo-Lag fire resistant wrap, and that potential ignition sources include electrical faults.
The licensee stated that the lower 6.9 and 4.16kV switchgear room contain ionization smoke detectors located directly over each switchgear cabinet that alarm at the main fire alarm panel in the CR. The licensee also stated that a fire in the lower 6.9 and 4.16 kV switchgear room that could potentially impact cables of concern would likely involve cable insulation resulting from an electrical fault in one of the cable trays routed over bus 24E or failure of bus 24E itself, and that combustibles in this area consist predominantly of IEEE 383 qualified cable insulation or cable that has been tested and found to have similar fire resistive characteristics. The licensee further stated that since there is a minimal amount of Class A combustibles in this area, there is little chance of a fire occurring outside of a switchgear failure, which could act as a pilot ignition source for the cable insulation, and that a switchgear failure normally results in a high intensity fire that lasts for a short duration, which makes it unlikely that it will cause sustained combustion of IEEE 383 qualified cables. The licensee further stated that in the unlikely event of a fire, it would be rapidly detected by the ionization smoke detection system installed in the area and that the smoke detection system, which consists of an ionization smoke detector located directly over each switchgear cabinet in the area, will aid in providing prompt fire brigade response.
The licensee stated that the east cable vault is provided with an automatic wet-pipe sprinkler system designed to protect structural steel and an ionization smoke detection system that alarms at the main fire alarm panel in the CR. The licensee also stated that the vertical cable chase that leads down the AB cable vault is protected by an automatic deluge spray system, which is actuated by cross-zoned smoke detection system that alarms at a local panel and at the
The licensee stated that a fire in the Facility Z1 lower 4.16kV switchgear room and cable vault will affect all Facility Z1 shutdown components, that Facility Z2 is used to achieve and maintain Hot Standby, that plant shutdown to Hot Standby can be accomplished using an AOP, and that OMAs are required to provide decay heat removal and restore charging system flow to the RCS.
The licensee stated that the cables of concern in the east cable vault are the control and indication cabling for valve 2-FW-43B. The licensee also stated that cables for valves 2-CH-192, 2-CH-508, and 2-CH-509 are not located in this room; however, valves 2-CH-508 and 2-CH-509 are impacted due to the potential loss of the feed cables for bus 22E or the “A” EDG's control and power cables, which results in the loss of power to the valves.
The licensee stated that OMAs 1, 9, and 11 are credited for a fire originating in Fire Area R-13 in order to provide decay heat removal and restore charging system flow to RCS in the event of cable damage or loss of IA.
The licensee stated that establishing AFW flow to the credited SG is required to be accomplished within 45 minutes and that the required flow path utilizes the TDAFW pump. The licensee also stated that prior to AFW initiation, the plant is placed in the Hot Standby condition by steaming through the MSSVs and that after AFW is established from the CR, operation of the ADV (2-MS-190B) (OMA 11) is the required method of removing decay heat to maintain Hot Standby and transition to Cold Shutdown. The licensee further stated that there is no cable damage from fire to the required ADV (2-MS-190B); however, the fire may cause a loss of IA, which is required to operate the ADVs to support decay heat removal. The licensee stated that upon a loss of air, the ADV will fail closed and that this design prevents excessive RCS cooldown prior to AFW start and, therefore, in the event of a loss of IA, Operators will establish local manual control of 2-MS-190B after AFW flow is established. The licensee further stated that PEO-2 will remain with the ADV to modulate steam flow per direction from the CR and that after restoration of the charging system, the BASTs are credited for maintaining RCS inventory and that the BASTs have a minimum level specified in the TRM, which ensures 72 minutes of flow.
The licensee stated that a loss of IA or power causes AFW flow control valve 2-FW-43B to fail open. However, the licensee also stated that the circuit can be isolated and controlled from Fire Shutdown Panel C-10. Therefore, OMA 9 is required to isolate the damaged cables and operate the TDAFW turbine speed control to maintain level in the SG with AFW flow control valve 2-FW-43B failed open. After AFW flow is established, the licensee stated that the steam release path from the SG may be switched from the MSSVs to ADV 2-MS-190B using OMA 11, which will require local manual operation of the valve. In the event that IA is not lost, ADV 2-MS-190B and AFW flow control valve 2-FW-43B can be operated from Fire Shutdown Panel C-10.
The licensee further stated that once the BASTs are depleted, Operators switch over to the RWST. The licensee further stated that due to fire damage, the 2-CH-192 valve may spuriously close and that in order to establish the RWST as the suction path for the charging system, an OMA is required to open valve 2-CH-192 (OMA 1) prior to BAST depletion. OMA 1 establishes the RWST as the suction supply for the charging system and is not conducted until after AFW is established, which takes 17 minutes.
The licensee stated that the OMA for restoring charging (OMA 1) requires 32 minutes to complete and that the available time is 72 minutes, which results in 40 minutes of margin. The licensee also stated that the OMA for establishing AFW from Fire Shutdown Panel C-10 (OMA 9) requires 4 minutes to complete and that the time available is 45 minutes, which results in 41 minutes of margin. AFW flow is established from the CR within the required 45-minute time period and should IA be lost, the OMA to continue decay heat removal can be conducted beginning 17 minutes after AFW flow is established (OMA 11).
Given the limited amount of combustible materials and ignition sources and installed detection (lower 6.9 and 4.16 kV switchgear room) and installed detection and suppression (east cable vault), it is unlikely that a fire would occur and go undetected or unsuppressed by the personnel and damage the safe shutdown equipment. The low likelihood of damage to safe shutdown equipment due to a fire in this area, combined with the ability of the OMAs to manipulate the plant in the event of a fire that damages safe shutdown equipment and to be completed with more than 30 minutes of margin, provides adequate assurance that safe shutdown capability is maintained.
The licensee stated that the means to safely shut down Millstone 2 in the event of a fire that does occur and is not rapidly extinguished, as expected, has been documented in the 10 CFR part 50, appendix R report. The entire appendix R report was not reviewed by the NRC as part of this exemption; the relevant information was submitted on the docket in the letters identified above. The sections below outline the
The NUREG-1852, “Demonstrating the Feasibility and Reliability of Operator Manual Actions in Response to Fire” (ADAMS Accession No. ML073020676), provides criteria and associated technical bases for evaluating the feasibility and reliability of post-fire OMAs in nuclear power plants. The following provides the Millstone 2 analysis of these criteria for justifying the OMAs specified in this exemption.
The licensee stated that in establishing the assumed times for Operators to perform various tasks, a significant margin (
The licensee stated that a review of ventilation systems for the fire areas addressed by the exemption request concluded that no credible paths exist that could allow the spread of products of combustion from the area of fire origin to an area that either serves as a travel path for OMAs or is an action location for an OMA. The licensee also stated that the installed ventilation systems are not used to perform smoke removal activity for the fire areas discussed in the exemption request and that smoke evacuation for these areas would be accomplished by the site fire brigade utilizing portable mechanical ventilation.
The licensee stated that the performance of all the OMAs for each of the fire areas has specific safe pathways for access and egress and that in all cases, emergency lighting units have been provided to ensure adequate lighting. The licensee also stated that during a fire event, implementation of CR actions ensure the radiation levels along these pathways, and at the location of the OMAs, are within the normal and expected levels.
The licensee stated that area temperatures may be slightly elevated due to a loss of normal ventilation; however, in no case would the temperatures prevent access along the defined routes or prevent the performance of an OMA. The licensee further stated that the most limiting time estimate is 72 minutes of charging system operation injecting the contents of the BASTs based on the tanks being at the TRM minimum level at the start of the event, and that during the event, charging may be lost or secured, and RCS inventory can meet the 10 CFR part 50, appendix R performance goal for 180 minutes. The licensee further stated that analysis indicates that valve 2-CH-192 may not need to be opened until 252 minutes into the event.
The licensee stated that fire barrier deviations that could allow the spread of products of combustion of a fire to an adjacent area that either serves as a travel path for OMAs or is an action location for an OMA have been found to not adversely impact OMA travel paths or action areas.
The licensee stated that as part of the OMA validation process, lighting, component labeling, accessibility of equipment, tools, keys, flashlights, and other devices or supplies needed are verified to ensure successful completion of the OMA.
The licensee stated that for each OMA, the current Millstone 2 10 CFR part 50, appendix R report indicates that Operator access is assured by an alternate path, or access is not required until after the fire has been suppressed. Where applicable, the licensee stated that OMAs have sufficient emergency lighting units to provide for access to the particular component and to perform the task.
Indicators and indication cables have been evaluated by the licensee as part of the exemption request process. Where impacts to indication have been identified, the licensee provided an alternate method to obtain the needed indication(s).
The licensee stated that Operators are provided with dedicated radio communication equipment and that the 10 CFR part 50, appendix R communication system utilizes a portion of the Millstone 800 megahertz (MHz) trunked radio system, which consists of 800 MHz portable radio units, a CR base station transmitter, antennas, a main communication console located inside the CR, and redundant repeaters. The licensee also stated that the CR base station transmitter is provided to ensure two-way voice communications with the CR, without affecting plant safety systems that may have sensitive electronic equipment located in the area, and the resulting design configuration ensures communications capability for all 10 CFR part 50, appendix R fire scenarios.
The licensee stated that all equipment required to complete a required action is included in a preventative maintenance program and is also listed in the TRM, which identifies surveillances for the equipment utilized in each OMA.
The licensee stated that there are no OMAs required in fire areas identified in the exemption request that necessitate the use of self-contained breathing apparatus. No fire areas necessitate reentry to the area of fire origin.
The licensee stated that entry into its AOP for “FIRE” is at the first indication of a fire from a panel alarm or report from the field and if the fire is in a 10 CFR part 50, appendix R area, the shift is directed to determine if a fire should be considered a fire subject to 10 CFR part 50, appendix R (
1. Identifying actual or imminent damage to safe shutdown components, switchgear, motor control centers, cable trays, or conduit runs;
2. Observation of spurious operation of plant components needed for safe shutdown;
3. Observation of loss of indication, control, or function of safe shutdown plant systems or components;
4. Observation of conflicting instrument indication for safe shutdown systems or components; or
5. Observation of parameters associated with safe shutdown systems or components not being within expected limits for the existing plant configuration.
The licensee stated that its AOP for “FIRE” has various attachments that have 10 CFR part 50, appendix R egress/access routes that provide a safe pathway to reach the required equipment necessary to complete the
The licensee also stated that there is a 10 CFR part 50, appendix R AOP corresponding to each appendix R fire area, which is entered when an appendix R fire is declared, and that Operations personnel train to those AOPs, which identify the steps to perform each OMA. The licensee further stated that time-critical OMAs are also identified within operating procedures, which require that Operations personnel train to perform these time-critical activities and that the OMAs presented in this exemption request are encompassed in the time-critical procedure.
The licensee further stated that Operations personnel train to these procedures and the AOPs identify the steps to perform each OMA. The licensee further stated that the times allotted to perform these tasks are easily achieved by experienced and inexperienced Operators during training sessions, evaluated requalification training, and supervised walkdowns, and that for each case, there is sufficient margin to account for the uncertainties associated with stress, environmental factors, and unexpected delays.
The licensee stated that the Operations shift staffing requirements include one additional licensed or non-licensed Operator over the minimum technical specification requirement to be on duty each shift during Modes 1, 2, 3, or 4, and that this Operator is designated as the 10 CFR part 50, appendix R Operator and is specified in the TRM. The licensee also stated that the number of individuals available to respond to the OMAs is one RO, two PEOs, and one additional licensed or non-licensed individual (10 CFR part 50, appendix R Operator). The licensee stated that the exemption request allocated tasks to PEO-1, PEO-2, PEO-3, and RO-1, and that one of the three PEOs would be the TRM required 10 CFR part 50, appendix R Operator, and with the exception of the panel C10 activities, the assignments are interchangeable between the four Operators, and since these individuals are specified by the technical specification and TRM, they are not members of the fire brigade and have no other collateral duties.
The licensee stated that Millstone 2 has a station emergency response organization (SERO) and appropriate emergency response facilities, and that declaration of an ALERT (events that are in progress or have occurred and involving an actual or potential substantial degradation of the level of safety of the plant, with releases expected to be limited to small fractions of the Environmental Protection Agency Protective Action Guideline exposure levels) activates the SERO organization, which is immediately staffed by on-site personnel and is fully established with on-call personnel within 60 minutes of the ALERT being declared. The licensee also stated that after this time, off-shift Operations staff (
The licensee stated that Operators are required and assumed to be within the protected area and that the time lines account for the initial response by the field Operator. The licensee also stated that upon the announcement of a fire, the field Operators are directed to report to the CR and await further directions and that initially, upon a report of a fire, the CR Operators enter their AOP for “FIRE.” The licensee further stated that the flow path to get into a 10 CFR part 50, appendix R fire scenario is that upon indication of a fire the fire brigade is dispatched and, based on the report or indications in the CR, an appendix R fire may be declared, and in the development of the time lines, the Operators are allowed 5 minutes to respond and report to the CR.
The licensee provided its validation process for the OMAs included in the exemption request. The validation process included the following: (1) Validation objectives, (2) validation frequency, (3) validation methods, (4) validation attributes, and (5) validation performance.
The licensee stated that all OMAs are encompassed in its operating procedures and that an enhancement to the tracking and training on time-critical activities has been developed and is currently being implemented.
The licensee stated that all of the OMAs identified are contained in the AOPs to respond to a 10 CFR part 50, appendix R fire and that during initial validation of these procedures, the OMAs were performed, and all of the time performance objectives were met as a result of the validation.
The licensee's analysis demonstrates that, for the expected scenarios, the OMAs can be diagnosed and executed within the amount of time available to complete them. The licensee's analysis also demonstrates that various factors, including the factor of two times margin, the use of the minimum BAST inventory, and the use of the CST inventory, have been considered to address uncertainties in estimating the time available. Therefore, the OMAs included in this review are feasible because there is adequate time available for the Operator to perform the required OMAs to achieve and maintain hot shutdown following a postulated fire event. Where a diagnosis time has been identified, it is included as part of the required time for a particular action. Where an action has multiple times or contingencies associated with the “allowable” completion time, the lesser time is used. This approach is considered to represent a conservative approach to analyzing the timelines associated with each of the OMAs with regard to the feasibility and reliability of the actions included in this exemption. All OMAs have at least 30 minutes of margin. Margin is based on using the most limiting information from the licensee; for example, if the licensee postulated a range of time for diagnosis, the required time includes the largest number in the range.
The completion times indicate reasonable assurance that the OMAs can reliably be performed under a wide range of conceivable conditions by different plant crews because it, in conjunction with the time margins associated with each action and other installed fire protection features, accounts for sources of uncertainty such as variations in fire and plant conditions, factors unable to be recreated in demonstrations and human-centered factors.
Finally, these numbers should not be considered without the understanding that the manual actions are a fallback, in the unlikely event that the fire protection DID features are insufficient. In most cases, there is no credible fire scenario that would necessitate the performance of these OMAs. The licensee provided a discussion of the activity completion times and associate margins related to the OMAs.
A reliable action is a feasible action that is analyzed and demonstrated as being dependably repeatable within an available time. The above criteria, Sections 3.5.1 through 3.5.10, provide
In summary, the DID concept for a fire in the fire areas discussed above provides a level of safety that results in the unlikely occurrence of fires, rapid detection, control, and extinguishment of fires that do occur and the protection of SSCs important to safety. As discussed above, the licensee has provided preventative and protective measures in addition to feasible and reliable OMAs that, together, demonstrate the licensee's ability to preserve or maintain safe shutdown capability in the event of a fire in the analyzed fire areas.
This exemption would allow Millstone 2 to rely on OMAs, in conjunction with the other installed fire protection features, to ensure that at least one means of achieving and maintaining hot shutdown remains available during and following a postulated fire event as part of its fire protection program, in lieu of meeting the requirements specified in 10 CFR part 50, appendix R, section III.G.2, for a fire in the analyzed fire areas. As stated above, § 50.12 allows the NRC to grant exemptions from the requirements of 10 CFR part 50. The NRC staff has determined that granting of this exemption will not result in a violation of the Atomic Energy Act of 1954, as amended, or the Commission's regulations. Therefore, the exemption is authorized by law.
The underlying purpose of 10 CFR part 50, appendix R, section III.G, is to ensure that at least one means of achieving and maintaining hot shutdown remains available during and following a postulated fire event. Based on the above, no new accident precursors are created by the use of the specific OMAs, in conjunction with the other installed fire protection features, in response to a fire in the analyzed fire areas. Therefore, the probability of postulated accidents is not increased. Also, based on the above, the consequences of postulated accidents are not increased. Therefore, there is no undue risk to public health and safety.
This exemption would allow Millstone 2 to credit the use of the specific OMAs, in conjunction with the other installed fire protection features, in response to a fire in the analyzed fire areas discussed above, in lieu of meeting the requirements specified in 10 CFR part 50, appendix R, section III.G.2. This change, to the operation of the plant, has no relation to security issues. Therefore, the common defense and security is not diminished by this exemption.
One of the special circumstances described in § 50.12(a)(2)(ii) is that the application of the regulation is not necessary to achieve the underlying purpose of the rule. The underlying purpose of 10 CFR part 50, appendix R, section III.G, is to ensure that at least one means of achieving and maintaining hot shutdown remains available during and following a postulated fire event. While the licensee does not comply with the explicit requirements of 10 CFR part 50, appendix R, section III.G.2, specifically, it does meet the underlying purpose of section III.G as a whole by ensuring that safe shutdown capability remains available through the combination of DID and OMAs. Therefore, special circumstances exist that warrant the issuance of this exemption as required by § 50.12(a)(2)(ii).
Based on the all of the features of the DID concept discussed above, the NRC staff concludes that the use of the requested OMAs, in these particular instances and in conjunction with the other installed fire protection features, in lieu of strict compliance with the requirements of 10 CFR part 50, appendix R, section III.G.2, is consistent with the underlying purpose of the rule. As such, the level of safety present at Millstone 2 is commensurate with the established safety standards for nuclear power plants.
Accordingly, the Commission has determined that, pursuant to § 50.12(a), the exemption is authorized by law, will not present an undue risk to the public health and safety, is consistent with the common defense and security and that special circumstances are present to warrant issuance of the exemption. Therefore, the Commission hereby grants Dominion an exemption from the requirements of 10 CFR part 50, appendix R, section III.G.2, to utilize the OMAs discussed above at Millstone 2.
Pursuant to § 51.32, an environmental assessment and finding of no significant impact related to this exemption was published in the
This exemption is effective upon issuance of this
For the Nuclear Regulatory Commission.
U.S. Office of Personnel Management (OPM).
Notice.
This notice identifies Schedule A, B, and C appointing authorities applicable to a single agency that were established or revoked from February 1, 2017 to February 28, 2017.
Senior Executive Resources Services, Senior Executive Service and Performance Management, Employee Services, (202) 606-2246.
In accordance with 5 CFR 213.103, Schedule A, B, and C appointing authorities available for use by all agencies are codified in the Code of Federal Regulations (CFR). Schedule A,
No schedule A authorities to report during February 2017.
No schedule B authorities to report during February 2017.
The following Schedule C appointing authorities were approved during February 2017.
The following Schedule C appointing authorities were revoked during February 2017.
5 U.S.C. 3301 and 3302; E.O. 10577, 3 CFR, 1954-1958 Comp., p. 218.
U.S. Office of Personnel Management.
U.S. Office of Personnel Management (OPM).
Notice.
This notice identifies Schedule A, B, and C appointing authorities applicable to a single agency that were established or revoked from April 1, 2017 to April 30, 2017.
Senior Executive Resources Services, Senior Executive Service and Performance Management, Employee Services, (202) 606-2246.
In accordance with 5 CFR 213.103, Schedule A, B, and C appointing authorities available for use by all agencies are codified in the Code of Federal Regulations (CFR). Schedule A, B, and C appointing authorities applicable to a single agency are not codified in the CFR, but the Office of Personnel Management (OPM) publishes a notice of agency-specific authorities established or revoked each month in the
No schedule A authorities to report during April 2017.
No schedule B authorities to report during April 2017.
The following Schedule C appointing authorities were approved during April 2017.
The following Schedule C appointing authorities were revoked during April 2017.
5 U.S.C. 3301 and 3302; E.O. 10577, 3 CFR, 1954-1958 Comp., p. 218.
U.S. Office of Personnel Management (OPM).
Notice.
This notice identifies Schedule A, B, and C appointing authorities applicable to a single agency that were established or revoked from March 1, 2017 to March 31, 2017.
Senior Executive Resources Services, Senior Executive Service and Performance Management, Employee Services, (202) 606-2246.
In accordance with 5 CFR 213.103, Schedule A, B, and C appointing authorities available for use by all agencies are codified in the Code of Federal Regulations (CFR). Schedule A, B, and C appointing authorities applicable to a single agency are not codified in the CFR, but the Office of Personnel Management (OPM) publishes a notice of agency-specific authorities established or revoked each month in the
(1) Not to exceed 1,000 positions to perform cyber risk and strategic analysis, incident handling and malware/vulnerability analysis, program management, distributed control systems security, cyber incident response, cyber exercise facilitation and management, cyber vulnerability detection and assessment, network and systems engineering, enterprise architecture, intelligence analysis, investigation, investigative analysis and cyber-related infrastructure interdependency analysis requiring unique qualifications currently not established by OPM. Positions will be at the General Schedule (GS) grade levels 09-15. No new appointments may be made under this authority after the completion of regulations implementing the Border Patrol Agency Pay Reform Act of 2014 or January 15, 2019.
No schedule B authorities to report during March 2017.
The following Schedule C appointing authorities were approved during March 2017.
The following Schedule C appointing authorities were revoked during March 2017.
5 U.S.C. 3301 and 3302; E.O. 10577, 3 CFR, 1954-1958 Comp., p. 218.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning a negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the market dominant or the competitive product list, or the modification of an existing product currently appearing on the market dominant or the competitive product list.
Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request.
The public portions of the Postal Service's request(s) can be accessed via the Commission's Web site (
The Commission invites comments on whether the Postal Service's request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern market dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3010, and 39 CFR part 3020, subpart B. For request(s) that the Postal Service states concern competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comment deadline(s) for each request appear in section II.
1.
This notice will be published in the
Railroad Retirement Board.
Notice announcing updated penalty inflation adjustments for civil monetary penalties for 2017.
As required by Section 701 of the Bipartisan Budget Act of 2015, entitled the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, the Railroad Retirement Board (Board) hereby publishes its 2017 annual adjustment of civil penalties for inflation.
Marguerite P. Dadabo, Assistant General Counsel, Railroad Retirement Board, 844 North Rush Street, Chicago, IL 60611-2092, (312) 751-4945, TTD (312) 751-4701.
Section 701 of the Bipartisan Budget Act of 2015, Public Law 114-74 (Nov. 2, 2015), entitled the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act), amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note) (Inflation Adjustment Act) to require agencies to publish regulations adjusting the amount of civil monetary penalties provided by law within the jurisdiction of the agency not later than July 1, 2016, and annual adjustments thereafter. The Board published an interim final rule in the
For the 2017 annual adjustment for inflation of the maximum civil penalty under the Program Fraud Civil Remedies Act of 1986, the Board applies the formula provided by the 2015 Act and the Board's interim final rule of May 2, 2016. In accordance with the 2015 Act, the amount of the adjustment is based on the percent increase between the CPI-U for the month of October preceding the date of the adjustment and the CPI-U for the October one year prior to the October immediately preceding the date of the adjustment. If there is no increase, there is no adjustment of civil penalties. The percent increase between the CPI-U for October 2016 and October 2015, as provided by Office of Management and Budget Memorandum M-17-11 (December 16, 2016) is 1.01636 percent. Therefore, the new maximum penalty under the Program Fraud Civil Remedies Act is $10,957 (the 2016 maximum penalty of $10,781 multiplied by 1.01636, rounded to the nearest dollar). The new minimum penalty under the False Claims Act is $10,957 (the 2016 minimum penalty of $10,781 multiplied by 1.01636, rounded to the nearest dollar), and the new maximum penalty is $21,916 (the 2016 maximum penalty of $21,563 multiplied by 1.01636, rounded to the nearest dollar). The adjustments in penalties will be effective October 27, 2017.
By Authority of the Board.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange seeks to amend its Amended and Restated Certificate of Incorporation. The text of the proposed rule change is provided below.
The name of the corporation is Bats BZX Exchange, Inc. The corporation filed its original Certificate of Incorporation with the Secretary of State of the State of Delaware on November 1, 2007
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
BZX recently amended its Certificate of Incorporation in connection with a corporate transaction (the “Transaction”) involving, among other things, the recent acquisition of BZX, along with Bats BZY Exchange, Inc. (“Bats BYX”), Bats EDGX Exchange, Inc. (“Bats EDGX”), and Bats EDGA Exchange, Inc. (“Bats EDGA” and, together with Bats BYX, Bats EDGX, and Bats BZX, the “Bats Exchanges”) by CBOE Holdings, Inc. (“CBOE Holdings”). CBOE Holdings is also the parent of Chicago Board Options Exchange, Incorporated (“CBOE”) and C2 Options Exchange, Incorporated (“C2”). Particularly, the filing proposed, among other things, to amend and restate the certificate of incorporation of the Exchange based on certificates of
Particularly, Section 245(c) of the Delaware General Corporation Law (DGCL) requires that a restated certificate of incorporation “shall state, either in its heading or in an introductory paragraph, the corporation's present name, and, if it has been changed, the name under which it was originally incorporated, and the date of filing of its original certificate of incorporation with the secretary of state.” The Exchange notes that the conformed Certificate did not reference the name under which the corporation was originally incorporated (
The Exchange also notes that the last sentence of the introductory paragraph which provides that the current certificate is “amended, integrated and restated to read in its entirety as follows:” mistakenly references the new title of the amended Certificate (
The Exchange notes that the proposed changes are concerned solely with the administration of the Exchange and do not affect the meaning, administration, or enforcement of any rules of the Exchange or the rights, obligations, or privileges of Exchange members or their associated persons is [sic] any way.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the Exchange believes correcting inadvertent non-substantive, technical errors in its Certificate in order to comply with Delaware law and reflect the correct and accurate version of the Certificate that was amended will avoid potential confusion, thereby removing impediments to, and perfecting the mechanism for a free and open market and a national market system, and, in general, protecting investors and the public interest of market participants. As noted above, the proposed changes do not affect the meaning, administration, or enforcement of any rules of the Exchange or the rights, obligations, or privileges of Exchange members or their associated persons is any way.
The Exchange does not believe the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Rather, the proposed rule change is merely attempting to correct inadvertent technical errors in the Exchange's introductory paragraph of its Certificate. The proposed rule change has no impact on competition.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend its rules as well as certain corporate documents of the Exchange to reflect legal name changes.
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The purpose of this filing is to reflect in the Exchange's governing documents (and the governing documents of its parent company)
• In addition to the preceding changes, all references to “OMX” will be removed from the Rulebook.
• In all instances where the word “the” should have been capitalized, (
No other changes are being proposed in this filing. The Exchange represents that these changes are concerned solely with the administration of the Exchange and do not affect the meaning, administration, or enforcement of any rules of the Exchange or the rights, obligations, or privileges of Exchange members or their associated persons in any way. Accordingly, this filing is being submitted under Rule 19b-4(f)(3). In lieu of providing a copy of the marked changes, the Exchange represents that it will make the necessary non-substantive revisions to the Certificate of Formation, Second Amended Limited Liability Company Agreement, By-Laws, the Rulebook and post updated versions of each on the Exchange's Web site pursuant to Rule 19b-4(m)(2).
The Exchange notes that the following references are not being amended in the Exchange's governing documents and the Exchange's Rulebook:
• Any name with a trademark (TM) or service mark (SM) attached to the name.
• Any references in the Certificate of Formation or Second Amended Limited Liability Company Agreement which references [sic] a prior name of the Exchange and reflects [sic] a historical date wherein that name was in effect.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The name change will align with the parent company, Nasdaq, Inc.
No written comments were either solicited or received.
Pursuant to Section 19(b)(3)(A) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Securities and Exchange Commission (“Commission”).
Notice.
Notice of application for an order under sections 6(c) and 23(c)(3) of the Investment Company Act of 1940 (the “Act”) for an exemption from rule 23c-3 under the Act.
Applicants request an order under sections 6(c) and 23(c)(3) of the Act for an exemption from certain provisions of rule 23c-3 to permit certain registered closed-end investment companies to make repurchase offers on a monthly basis.
Blackstone/GSO Floating Rate Enhanced Income Fund (“BGFREI”), GSO/Blackstone Debt Funds Management LLC (the “Adviser”), and Blackstone Advisory Partners L.P. (the “Distributor”).
The application was filed on July 3, 2017 and amended on October 17, 2017.
An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on November 17, 2017, and should be accompanied by proof of service on the applicants, in the form of an affidavit, or, for lawyers, a certificate of service. Pursuant to rule 0-5 under the Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090; Applicants: 345 Park Avenue, 31st Floor, New York, NY 10154.
Asen Parachkevov, Senior Counsel, or David Marcinkus, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or for an applicant using the Company name box, at
1. BGFREI is a Delaware statutory trust that is registered under the Act as a continuously offered, non-diversified, closed-end management investment company that will be operated as an
2. Applicants request that any relief granted also apply to any registered closed-end management investment company that operates as an interval fund pursuant to rule 23c-3 for which the Adviser or any entity controlling, controlled by, or under common control with the Adviser, or any successor in interest to any such entity,
3. BGFREI's investment objective is to provide attractive income with low sensitivity to rising interest rates. BGFREI has applied for exemptive relief from the Commission to permit BGFREI to issue multiple classes of shares and to impose asset-based distribution fees and an early withdrawal charge.
4. Applicants request an order to permit each Fund to offer to repurchase a portion of its common shares at one-month intervals, rather than the three, six, or twelve-month intervals specified by rule 23c-3.
5. Each Fund will disclose in its prospectus and annual reports its fundamental policy to make monthly offers to repurchase a portion of its common shares at net asset value, less deduction of a repurchase fee, if any, as permitted by rule 23c-3(b)(1), and the imposition of early withdrawal charges to the extent permitted pursuant to exemptive relief granted by the Commission. The fundamental policy will be changeable only by a majority vote of the holders of such Fund's outstanding voting securities. Under the fundamental policy, the repurchase offer amount will be determined by the board of trustees of the applicable Fund (“Board”) prior to each repurchase offer. Each Fund will comply with rule 23c-3(b)(8)'s requirements with respect to its trustees who are not interested persons of such Fund, within the meaning of section 2(a)(19) of the Act (“Disinterested Trustees”) and their legal counsel. Under its fundamental policy, each Fund will make monthly offers to repurchase not less than 5% of its outstanding shares at the time of the repurchase request deadline. The repurchase offer amounts for the then-current monthly period, plus the repurchase offer amounts for the two monthly periods immediately preceding the then-current monthly period, will not exceed 25% of the outstanding common shares of the applicable Fund.
6. The prospectus of each Fund will state the means to determine the repurchase request deadline and the maximum number of days between each repurchase request deadline and the repurchase pricing date. Each Fund's repurchase pricing date normally will be the same date as the repurchase request deadline and pricing will be determined after close of business on that date.
7. Pursuant to rule 23c-3(b)(1), each Fund will repurchase shares for cash on or before the repurchase payment deadline, which will be no later than seven calendar days after the repurchase pricing date. BGFREI (and any Future Fund) currently intends to make payment on the next business day following the repurchase pricing date. Each Fund will make payment for shares repurchased in the previous month's repurchase offer at least five business days before sending notification of the next repurchase offer. BGFREI will, and a Future Fund may, deduct a repurchase fee in an amount not to exceed 2% from the repurchase proceeds payable to tendering shareholders, in compliance with rule 23c-3(b)(1).
8. Each Fund will provide common shareholders with notification of each repurchase offer no less than seven days and no more than fourteen days prior to the repurchase request deadline. The notification will include all information required by rule 23c-3(b)(4)(i). Each Fund will file the notification and the Form N-23c-3 with the Commission within three business days after sending the notification to its respective common shareholders.
9. The Funds will not suspend or postpone a repurchase offer except pursuant to the vote of a majority of its Disinterested Trustees, and only under the limited circumstances specified in rule 23c-3(b)(3)(i). The Funds will not condition a repurchase offer upon tender of any minimum amount of shares. In addition, each Fund will comply with the pro ration and other allocation requirements of rule 23c-3(b)(5) if common shareholders tender more than the repurchase offer amount. Further, each Fund will permit tenders to be withdrawn or modified at any time until the repurchase request deadline, but will not permit tenders to be withdrawn or modified thereafter.
10. From the time a Fund sends its notification to shareholders of the repurchase offer until the repurchase pricing date, a percentage of such Fund's assets equal to at least 100% of the repurchase offer amount will consist of: (a) Assets that can be sold or disposed of in the ordinary course of business at approximately the price at which such Fund has valued such investment within a period equal to the period between the repurchase request deadline and the repurchase payment deadline; or (b) assets that mature by the next repurchase payment deadline. In the event the assets of a Fund fail to comply with this requirement, the Board will cause such Fund to take such action as it deems appropriate to ensure compliance.
11. In compliance with the asset coverage requirements of section 18 of the Act, any senior security issued by, or other indebtedness of, a Fund will either mature by the next repurchase pricing date or provide for such Fund's ability to call, repay or redeem such senior security or other indebtedness by the next repurchase pricing date, either in whole or in part, without penalty or premium, as necessary to permit that Fund to complete the repurchase offer in such amounts determined by its Board.
12. The Board of each Fund will adopt written procedures to ensure that such Fund's portfolio assets are sufficiently liquid so that it can comply with its fundamental policy on repurchases and the liquidity requirements of rule 23c-3(b)(10)(i). The Board of each Fund will review the overall composition of the portfolio and make and approve such changes to the procedures as it deems necessary.
1. Section 6(c) of the Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions, from any provision of the Act or rule thereunder, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act.
2. Section 23(c) of the Act provides in relevant part that no registered closed-end investment company shall purchase any securities of any class of which it is the issuer except: (a) On a securities exchange or other open market; (b) pursuant to tenders, after reasonable opportunity to submit tenders given to all holders of securities of the class to be purchased; or (c) under such other circumstances as the Commission may permit by rules and regulations or orders for the protection of investors.
3. Rule 23c-3 under the Act permits a registered closed-end investment company to make repurchase offers for its common stock at net asset value at periodic intervals pursuant to a fundamental policy of the investment company. “Periodic interval” is defined in rule 23c-3(a)(1) as an interval of three, six, or twelve months. Rule 23c-3(b)(4) requires that notification of each repurchase offer be sent to shareholders no less than 21 calendar days and no more than 42 calendar days before the repurchase request deadline.
4. Applicants request an order pursuant to sections 6(c) and 23(c) of the Act exempting them from rule 23c-3(a)(1) to the extent necessary to permit the Funds to make monthly repurchase offers. Applicants also request an exemption from the notice provisions of rule 23c-3(b)(4) to the extent necessary to permit each Fund to send notification of an upcoming repurchase offer to shareholders at least seven days but no more than fourteen calendar days in advance of the repurchase request deadline.
5. Applicants contend that monthly repurchase offers are in the shareholders' best interests and consistent with the policies underlying rule 23c-3. Applicants assert that monthly repurchase offers will provide investors with more liquidity than quarterly repurchase offers. Applicants assert that shareholders will be better able to manage their investments and plan transactions, because if they decide to forego a repurchase offer, they will only need to wait one month for the next offer. Applicants also contend that the portfolio of each Fund will be managed to provide ample liquidity for monthly repurchase offers. Applicants do not believe that a change to monthly repurchases would necessitate any change in portfolio management practices of any of the Funds in order to satisfy rule 23c-3. In fact, applicants expect limited or no impact on overall portfolio management or performance of such Funds upon converting to monthly offers and believe that it may be easier to manage the cash of the portfolio for the smaller monthly offers compared to the larger quarterly ones.
6. Applicants propose to send notification to shareholders at least seven days, but no more than fourteen calendar days, in advance of a repurchase request deadline. Applicants assert that, because BGFREI (and any Future Fund) currently intends to make payment on the next business day following the pricing date, the entire procedure can be completed before the next notification is sent out to shareholders; thus avoiding any overlap. Applicants believe that these procedures will eliminate any possibility of investor confusion. Applicants also state that monthly repurchase offers will be a fundamental feature of the Funds, and their prospectuses will provide a clear explanation of the repurchase program.
7. Applicants submit that for the reasons given above the requested relief is appropriate in the public interest and is consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act.
Applicants agree that any order granting the requested relief shall be subject to the following conditions:
1. BGFREI (and any Future Fund relying on this relief) will make a repurchase offer pursuant to rule 23c-3(b) for a repurchase offer amount of not less than 5% in any one-month period. In addition, the repurchase offer amount for the then-current monthly period, plus the repurchase offer amounts for the two monthly periods immediately preceding the then-current monthly period, will not exceed 25% of BGFREI's (or Future Fund's, as applicable) outstanding common shares. BGFREI (and any Future Fund relying on this relief) may repurchase additional tendered shares pursuant to rule 23c-3(b)(5) only to the extent the percentage of additional shares so repurchased does not exceed 2% in any three-month period.
2. Payment for repurchased shares will occur at least five business days before notification of the next repurchase offer is sent to shareholders of BGFREI (or Future Fund relying on this relief).
For the Commission, by the Division of Investment Management, under delegated authority.
Securities and Exchange Commission (“Commission”).
Notice.
Notice of an application for an order pursuant to: (a) Section 6(c) of the Investment Company Act of 1940 (“Act”) granting an exemption from sections 18(f) and 21(b) of the Act; (b) section 12(d)(1)(J) of the Act granting an exemption from section 12(d)(1) of the Act; (c) sections 6(c) and 17(b) of the Act granting an exemption from sections 17(a)(1), 17(a)(2) and 17(a)(3) of the Act; and (d) section 17(d) of the Act and rule 17d-1 under the Act to permit certain joint arrangements and transactions. Applicants request an order that would permit certain registered open-end management investment companies to participate in a joint lending and borrowing facility.
PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, each an investment company organized as a Delaware statutory trust or a Massachusetts business trust and registered under the Act as an open-end management investment company, on behalf of all existing series,
The application was filed on March 17, 2017 and amended on June 28, 2017 and October 16, 2017.
An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on November 17, 2017 and should be accompanied by proof of service on the applicants, in the form of an affidavit, or, for lawyers, a certificate of service. Pursuant to Rule 0-5 under the Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090; Applicants: Joshua Ratner, Pacific Investment Management Company LLC, 1633 Broadway, New York, New York 10019 and Robert W. Helm, Brendan C. Fox, Dechert LLP, 1900 K Street NW., Washington, DC 20006.
Deepak T. Pai, Senior Counsel, at (202) 551-6876 or Robert H. Shapiro, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or an applicant using the Company name box, at
1. Applicants request an order that would permit the applicants to participate in an interfund lending facility where each Fund could lend money directly to and borrow money directly from other Funds to cover unanticipated cash shortfalls, such as unanticipated redemptions or trade fails.
2. Applicants anticipate that the proposed facility would provide a borrowing Fund with a source of liquidity at a rate lower than the bank borrowing rate at times when the cash position of the Fund is insufficient to meet temporary cash requirements. In addition, Funds making short-term cash loans directly to other Funds would earn interest at a rate higher than they otherwise could obtain from investing their cash in repurchase agreements or certain other short term money market instruments. Thus, applicants assert that the facility would benefit both borrowing and lending Funds.
3. Applicants agree that any order granting the requested relief will be subject to the terms and conditions stated in the application. Among others, the Adviser, through a designated committee, would administer the facility as a disinterested fiduciary as part of its duties under the investment management and administrative agreements with the Funds and would receive no additional fee as compensation for its services in connection with the administration of the facility.
4. Applicants assert that the facility does not raise the concerns underlying section 12(d)(1) of the Act given that the Funds are part of the same group of investment companies and there will be no duplicative costs or fees to the Funds.
5. Applicants also believe that the limited relief from section 18(f)(1) of the Act that is necessary to implement the facility (because the lending Funds are not banks) is appropriate in light of the conditions and safeguards described in the application and because the open-end Funds would remain subject to the requirement of section 18(f)(1) that all borrowings of the open-end Fund, including combined interfund loans and bank borrowings, have at least 300% asset coverage.
6. Section 6(c) of the Act permits the Commission to exempt any persons or transactions from any provision of the Act if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Section 12(d)(1)(J) of the Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions, from any provision of section 12(d)(1) if the exemption is consistent with the public interest and the protection of investors. Section 17(b) of the Act authorizes the Commission to grant an order permitting a transaction otherwise prohibited by section 17(a) if it finds that (a) the terms of the proposed transaction are fair and reasonable and do not involve overreaching on the part
For the Commission, by the Division of Investment Management, under delegated authority.
On August 30, 2017, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to list and trade shares (“Shares”) of The Gold Trust (“Trust”), a series of the World Currency Gold Trust (“WCGT”),
The investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion, less the expenses of the Trust's operations. The Trust will not trade in gold futures, options, or swap contracts on any futures exchange or over the counter. The Trust will not hold or trade in commodity futures contracts, commodity interests, or any other instruments regulated by the Commodity Exchange Act. The Trust will take delivery of physical gold that complies with the London Bullion Market Association (“LBMA”) gold delivery rules. According to the Exchange, the Shares, which are Commodity Based Trust Shares, will represent investors' discrete identifiable and undivided beneficial ownership interest in the commodities deposited into the Trust.
The sponsor of the Trust is WGC USA Asset Management Company, LLC (“Sponsor”). The sole trustee of WCGT is Delaware Trust Company. BNY Mellon Asset Servicing, a division of The Bank of New York Mellon (“BNYM”), will be the Trust's administrator and transfer agent. BNYM will serve as the custodian of the Trust's cash, if any. A bank will serve as the custodian of the Trust's gold.
After careful review, the Commission finds that the Exchange's proposed rule change, as modified by Amendment No. 1, to list and trade the Shares is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange.
Additionally, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with Section 6(b)(5) of the Exchange Act,
The Commission believes that the proposed rule change, as modified by Amendment No. 1, is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares appropriately. NYSE Arca Rule 8.201-E(e)(2)(v) requires that an IIV (which is referred to in the rule as the “Indicative Trust Value”) be calculated and disseminated at least every 15 seconds. The IIV will be calculated based on the amount of gold held by the Trust and a price of gold derived from updated bids and offers indicative of the spot price of gold. The Exchange states that the IIV relating to the Shares will be widely disseminated by one or more major market data vendors at least every 15 seconds during the Core Trading Session.
The Commission also believes that the proposal, as modified by Amendment No. 1, is reasonably designed to prevent trading when a reasonable degree of transparency cannot be assured. With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares. Trading on the Exchange in the Shares may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (1) The extent to which conditions in the underlying gold market have caused disruptions and/or lack of trading, or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. In addition, trading in Shares will be subject to trading halts caused by extraordinary market volatility pursuant to the Exchange's “circuit breaker” rule.
Additionally, the Commission notes that market makers in the Shares would be subject to the requirements of NYSE Arca Rule 8.201-E(g), which allow the Exchange to ensure that they do not use their positions to violate the requirements of Exchange rules or applicable federal securities laws.
In support of this proposal, the Exchange has made the following additional representations:
(1) The Shares will be listed and traded on the Exchange pursuant to the initial and continued listing criteria in NYSE Arca Rule 8.201-E.
(2) The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions.
(3) The Exchange deems the Shares to be equity securities.
(4) The Exchange has a general policy prohibiting the distribution of material, non-public information by its employees.
(5) Trading in the Shares will be subject to the existing trading surveillances administered by the Exchange, as well as cross-market surveillances administered by the Financial Industry Regulatory Authority (“FINRA”) on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws, and these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules and federal securities laws applicable to trading on the Exchange.
(6) The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Shares with other markets and other entities that are members of the ISG, and the Exchange or FINRA, on behalf of the Exchange, or both, may obtain trading information regarding trading in the Shares from such markets and other entities. In addition, the Exchange may obtain information regarding trading in the Shares from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement.
(7) Prior to the commencement of trading, the Exchange will inform its ETP Holders in an Information Bulletin of the special characteristics and risks associated with trading the Shares. Specifically, the Information Bulletin will discuss the following: (1) The procedures for purchases and redemptions of Shares in creation units (including noting that Shares are not individually redeemable); (2) NYSE Arca Rule 9.2-E(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Shares; (3) how information regarding the IIV is disseminated; (4) the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; (5) the possibility that trading spreads and the resulting premium or discount on the Shares may widen as a result of reduced liquidity of gold trading during the Core and Late Trading Sessions after the close of the major world gold markets; and (6) trading information.
(8) All statements and representations made in this filing regarding (a) the description of the portfolio or reference assets, (b) limitations on portfolio holdings or reference assets, or (c) the applicability of Exchange listing rules specified in this rule filing shall constitute continued listing requirements for listing the Shares of the Trust on the Exchange.
(9) The issuer has represented to the Exchange that it will advise the Exchange of any failure by the Trust to comply with the continued listing requirements and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will monitor for compliance with the continued listing requirements. If the Trust is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under NYSE Arca Rule 5.5(m).
This approval order is based on all of the Exchange's representations—including those set forth above and in Amendment No. 1—and the Exchange's description of the Trust.
For the foregoing reasons, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with Section 6(b)(5) of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On July 19, 2017, the Public Company Accounting Oversight Board (the “Board” or the “PCAOB”) filed with the Securities and Exchange Commission (the “Commission”), pursuant to Section 107(b)
On June 1, 2017, the Board adopted AS 3101,
The Proposed Rules retain the pass/fail opinion of the existing auditor's report but make significant changes to the existing auditor's report, including the following:
• Critical audit matters (“CAMs”). The Proposed Rules require the auditor to communicate in the auditor's report any CAMs arising from the current period's audit or state that the auditor determined that there are no CAMs.
• A CAM is defined as any matter arising from the audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
(1) Relates to accounts or disclosures that are material to the financial statements; and
(2) involved especially challenging, subjective, or complex auditor judgment.
• In determining whether a matter involved especially challenging, subjective, or complex auditor judgment, the auditor should take into account, alone or in combination, the following factors, as well as other factors specific to the audit:
• The auditor's assessment of the risks of material misstatement, including significant risks;
• The degree of auditor judgment related to areas in the financial statements that involved the application of significant judgment or estimation by management, including estimates with significant measurement uncertainty;
• The nature and timing of significant unusual transactions and the extent of audit effort and judgment related to these transactions;
• The degree of auditor subjectivity in applying audit procedures to address the matter or in evaluating the results of those procedures;
• The nature and extent of audit effort required to address the matter, including the extent of specialized skill or knowledge needed or the nature of consultations outside the engagement team regarding the matter; and
• The nature of audit evidence obtained regarding the matter.
• The communication of each CAM within the auditor's report includes:
• Identifying the CAM;
• Describing the principal considerations that led the auditor to determine that the matter is a CAM;
• Describing how the CAM was addressed in the audit; and
• Referring to the relevant financial statement accounts or disclosures.
• For each matter arising from the audit of the financial statements that (a) was communicated or required to be communicated to the audit committee, and (b) relates to accounts or disclosures that are material to the financial statements, the auditor must document whether or not the matter was determined to be a CAM (
• Additional Changes to the Auditor's Report. The Proposed Rules also include a number of other changes to the auditor's report that are primarily intended to clarify the auditor's role and responsibilities related to the audit of the financial statements, provide additional information about the auditor, and make the auditor's report easier to read. These include:
• Auditor tenure—a statement disclosing the year in which the auditor began serving consecutively as the company's auditor;
• Independence—a statement regarding the requirement for the auditor to be independent;
• Addressee—the auditor's report will be addressed to the company's shareholders and board of directors or equivalents (additional addressees are also permitted);
• Amendments to basic elements—certain standardized language in the auditor's report has been changed, including adding the phrase “whether due to error or fraud,” when describing the auditor's responsibility under PCAOB standards to obtain reasonable assurance about whether the financial statements are free of material misstatement; and
• Standardized form of the auditor's report—the opinion will appear in the first section of the auditor's report, and section titles have been added to guide the reader.
The amendments to other PCAOB standards include:
• AS 3105,
• AS 1220,
• AS 1301,
• AS 2201,
• AS 2820,
• AS 4105,
Under the Proposed Rules, communication of CAMs in the auditor's report is not required for audits of emerging growth companies (“EGCs”);
The additional changes to the auditor's report contained in the Proposed Rules apply for all audits performed under PCAOB standards, including audits of EGCs, as discussed in Section IV below.
The Proposed Rules would be effective as follows:
a. All paragraphs of the Proposed Rules, except the paragraphs related to CAMs in AS 3101 of the Proposed Rules (paragraphs .11 through .17) and amendments related to those paragraphs: All audits of fiscal years ending on or after December 15, 2017; and
b. All paragraphs related to CAMs in AS 3101 of the Proposed Rules
• For audits of large accelerated filers: Fiscal years ending on or after June 30, 2019; and
• For audits of all other companies to which the requirements apply: Fiscal years ending on or after December 15, 2020.
The Commission's comment period on the Proposed Rules ended on August 18, 2017. The Commission received approximately 50 comment letters from investors and investor associations, accounting firms, issuers and issuer organizations, and others.
As background, for several years, the Board has been considering changes to the auditor's report, throughout which the Board has, in various settings and formats, considered commenters' concerns on such changes. In June 2011, the Board issued the PCAOB Concept Release to solicit comment on a number of potential changes to the auditor's report. The Board also held a public roundtable in September 2011 to obtain additional insight on the alternatives presented in the PCAOB Concept Release.
After considering the results of its outreach and comments on the PCAOB Concept Release, in August 2013, the Board issued the PCAOB Proposal that included, among other things, new requirements for auditors to communicate CAMs, as well as additional changes to the auditor's report. In April 2014, the Board held a public meeting to obtain further input on the PCAOB Proposal from a diverse group of investors and other financial statement users, preparers, audit committee members, auditors, and others.
In May 2016, the Board issued the PCAOB Re-proposal that modified the PCAOB Proposal in several respects in response to feedback received. In particular, the PCAOB Re-proposal modified the source, definition, and communication requirements for CAMs.
Throughout the rulemaking process, the Board received comments from investors and investor associations that consistently stressed the importance and value to them of additional communication from the auditor. In particular, commenters indicated that tailored, audit-specific information from the auditor's point of view would reduce information asymmetries and make the auditor's report more relevant and useful, a view which also was shared by at least one of the larger accounting firms. Based on these comments and its own analysis, the Board concluded that requiring auditors to provide more information about the audit through the communication of CAMs will benefit investors and other market participants.
As further explained below, the Board also made changes in the Proposed Rules to address the significant comments received on the PCAOB Proposal and the PCAOB Re-proposal. In particular, the Board sought to balance the potential benefits of CAM communications with the concerns expressed by some commenters about potential consequences, including: The auditor's role as the potential source of original information about the company; the potential impact of CAMs on the role of the audit committee and communication among the audit committee, management, and the auditor; and the potential liability impact of CAMs. To balance among these competing factors, the Board, among other things, limited the source of CAMs to matters communicated or required to be communicated to the audit committee, added a materiality component to the definition of a CAM, and narrowed the definition of a CAM to only those matters that involved especially challenging, subjective, or complex auditor judgment. In its release accompanying the Proposed Rules, the Board acknowledged that a variety of claims can be raised related to the statements in the auditor's report and that litigation is inherently uncertain. The Board also stated that it will monitor the Proposed Rules after implementation for any unintended consequences.
The Sarbanes-Oxley Act requires us to determine whether the Proposed Rules are consistent with the requirements of the Sarbanes-Oxley Act and the securities laws or are necessary or appropriate in the public interest or for the protection of investors.
A number of commenters provided feedback related to the potential usefulness of CAMs. Comments from investors and investor associations consistently indicated they would find CAM communications to be beneficial in understanding the audit.
In commenting on the Proposed Rules, one large accounting firm acknowledged that many financial statement users have expressed dissatisfaction with the current reporting by auditors.
We agree with these commenters and the Board that communicating CAMs to investors will reduce information asymmetries. In particular, we are persuaded that the communication of CAMs, as structured in the Proposed Rules, will add to the total mix of information available to investors by eliciting more information about the audit itself—information that is uniquely within the perspective of the auditor and, thus, not otherwise available to investors and other financial statement users. In so doing, we believe the communication of CAMs could enhance the value and relevance of audits to the capital markets and be useful to investors and other financial statement users in assessing a company's financial reporting and making capital allocation and voting decisions. We are, therefore, of the view that the requirement to communicate CAMs, as structured in the Proposed Rules, is consistent with the Sarbanes-Oxley Act and the securities laws and is necessary or appropriate in the public interest or for the protection of investors.
We recognize that some commenters questioned the usefulness of CAMs, including asserting that the communications will not provide meaningful information, likely will duplicate management disclosures, or will use standardized language (some commenters referred to this as “boilerplate”).
Similar concerns were raised in the PCAOB's rulemaking process. In response to these concerns, the Board stated in the release accompanying the Proposed Rules that the requirements in the Proposed Rules “aim to provide investors with the auditor's unique perspective on the areas of the audit that involved the auditor's especially challenging, subjective, or complex judgments. Limiting critical audit matters to these areas should mitigate the extent to which expanded auditor reporting could become standardized. Focusing on auditor judgment should limit the extent to which expanded auditor reporting could become duplicative of management's reporting.”
We acknowledge the risks identified by commenters that CAMs will not provide meaningful incremental information, either because the information is duplicative of what is already provided by the issuer, or because auditors will communicate numerous or boilerplate CAMs. With respect to the duplication risk, the requirement for CAM communications focuses on the auditor's perspective, not the issuer's. Specifically, as discussed above in Section II.A, “Changes to PCAOB Standards,” the auditor must identify the CAM, describe the principal considerations that led the auditor to determine that the matter is a CAM, describe how the CAM was addressed in the audit, and refer to the relevant financial statement accounts or disclosures. With the exception of the reference to the relevant portions of the financial statements, those required communications are not expected to overlap with the Commission's required issuer disclosures, which generally do not focus on the audit. Also, the required reference to the relevant financial statement accounts or disclosures provides context for the CAM-related communications but does not necessarily duplicate those disclosures.
With respect to the risk that auditors would communicate unnecessary CAMs or boilerplate CAMs, we acknowledge that our own experience with the disclosure by companies of risk factors under Item 503(c) of Regulation S-K
We believe that some of these concerns are lessened by the way that the Board has defined CAMs. Specifically, as it relates to the concern of auditors reporting an overabundance of CAMs, we note that, under the Proposed Rules, a matter must meet each element of the definition of a CAM. In our view, the inclusion of a materiality component in the definition; narrowing the source of potential CAMs to matters communicated or required to be communicated to the audit committee; limiting CAMs to those areas that involved especially challenging, subjective, or complex auditor judgment; and refining the factors to take into account in determining whether a matter involved especially challenging, subjective, or complex auditor judgment should all act to mitigate the risk of auditors reporting too many CAMs.
Similarly, we believe that the focus on auditor judgment in the definition of CAMs, along with the requirement to disclose
Having considered the public comments, we are persuaded that the reporting of CAMs, as structured in the Proposed Rules will be beneficial. The communication of CAMs should not be numerous and boilerplate and will provide additional information about the audit—and from the auditor's own unique perspective—that will be useful to investors and other financial statement users in assessing a company's financial reporting and making capital allocation and voting decisions.
A number of commenters expressed concern with the auditor potentially disclosing original information, including potentially immaterial or confidential information.
Similar concerns regarding the auditor being the source of original information about the company were raised in response to the PCAOB Concept Release, PCAOB Proposal, and PCAOB Re-proposal. The Board acknowledged these concerns and made certain modifications in the Proposed Rules in an effort to balance investor interests in expanded auditor reporting and the concerns of other stakeholders, primarily issuers and issuer organizations and audit committees, related to the costs, benefits, and potential unintended consequences associated with communicating CAMs. For example, the Board added a materiality component in the definition of a CAM “to respond to investor requests for informative and relevant auditor's reports while, at the same time, addressing other commenters' concerns regarding auditor communication of immaterial information that management is not required to disclose under the applicable financial reporting framework and SEC reporting requirements.” Further, in an effort to clarify the requirements, the Board stated in the release accompanying the Proposed Rules, among other things, that “while auditor reporting of original information is not prohibited, it is limited to areas uniquely within the perspective of the auditor: describing the principal considerations that led the auditor to determine that the matter is a critical audit matter and how the matter was addressed in the audit.” AS 3101 of the Proposed Rules includes the following note to the same effect, “When describing critical audit matters in the auditor's report, the auditor is not expected to provide information about the company that has not been made publicly available by the company unless such information is necessary to describe the principal considerations that led the auditor to determine that a matter is a critical audit matter or how the matter was addressed in the audit.”
With respect to whether mandating such disclosure would run counter to the U.S. regulatory framework or exceed the Board's authority, the Board observed in the release accompanying the Proposed Rules that there is no PCAOB standard, SEC rule, or other financial reporting requirement prohibiting auditor reporting of information that management has not previously disclosed.
We agree with commenters that, in general, the preparation and disclosure of information about an issuer should be the primary responsibility of the issuer, and that the auditor's role, by contrast, is to audit the issuer's financial statements and to provide a report thereon. That said, we disagree with those commenters who expressed an
Nor do we believe that CAMs, particularly as currently proposed, will displace the financial reporting responsibilities of management. Instead, we believe the communication of CAMs should add to the total mix of information available to investors by eliciting more information about the audit itself, which is uniquely within the perspective of the auditor, irrespective of the financial reporting responsibilities of management. Requiring communication of information about the audit, from the auditor's perspective, as the Proposed Rules require, should limit the extent to which original information would be provided by the auditor. Moreover, to the extent original information would need to be communicated in a CAM, we anticipate that the auditor, management, and the audit committee will engage in a dialogue about that communication.
While we acknowledge the important concerns raised by several commenters in this area and intend to closely monitor the implementation of the Proposed Rules, as discussed further below, we believe that the requirements for communicating CAMs in the auditor's report are reasonably designed to ameliorate these concerns and are within the Board's authority. As a result, we believe that the Proposed Rules are consistent with the Sarbanes-Oxley Act and the securities laws and are necessary or appropriate in the public interest or for the protection of investors. We address more specific concerns on this matter in the following paragraphs.
As discussed in Section II.A, “Changes to PCAOB Standards” above, under the Proposed Rules, a CAM is defined as any matter arising from the audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) Relates to accounts or disclosures that are material to the financial statements, and (2) involved especially challenging, subjective, or complex auditor judgment.
Some commenters questioned the scope of the definition of CAMs, which states that a CAM “relates to” accounts or disclosures that are material to the financial statements, rather than specifying that a CAM itself has to be material to the financial statements.
The commenters that raised questions about the scope of the CAM definition principally explained their concerns by discussing specific examples that might result in the auditor disclosing original information about the company as it relates to the identification of a CAM or immaterial information that is not otherwise required to be disclosed by the financial reporting framework or SEC regulations. Specifically, commenters questioned whether significant deficiencies, illegal acts, and remote loss contingencies should be identified as CAMs. The same questions were posed to the Board in response to the PCAOB Re-proposal. In the release accompanying the Proposed Rules, the Board directly addressed each of the examples by providing guidance that: (1) The determination that there is a significant deficiency in internal control over financial reporting, in and of itself, cannot be a CAM; (2) a potential illegal act, if an appropriate determination had been made that no disclosure of it was required in the financial statements, would not meet the definition of a CAM; and (3) a potential loss contingency that was communicated to the audit committee, but that was determined to be remote and was not recorded in the financial statements or otherwise disclosed under the applicable financial reporting framework, would not meet the definition of a CAM.
Other than the specific examples described above, no other examples raising concerns with the definition of a CAM have been brought to the attention of the PCAOB or the Commission. We recognize that some commenters suggested an alternative approach to materiality, but we agree with the balance struck by the PCAOB between the benefits of communicating CAMs and the possibility of the auditor providing information that has not previously been disclosed by the company. Under the Proposed Rules, communication of original information should be limited to rare circumstances, as we further discuss in section III.B.2 below, and relate only to the discussion of the principal considerations as to why a matter was a CAM or how the auditor addressed the CAM. Moreover, we believe this approach is consistent with the Board's statutory mandate under Section 101(a) of the Sarbanes-Oxley Act to further the public interest in the preparation of informative, accurate, and independent audit reports. Requiring the communication of CAMs will provide additional information about the audit from the auditor's own unique perspective that investors have indicated, and which we have found, could reduce information asymmetries and be useful to investors, in assessing a company's financial reporting and making capital allocation and voting decisions.
Commenters also suggested that their alternative approach to materiality would be easier to apply in determining which matters to communicate as CAMs. However, given the clarifications provided by the Board, we believe commenters' concerns regarding the scope of the CAM definition have been adequately addressed and that the Proposed Rules' materiality component, which specifies that a CAM “relates to” accounts or disclosures that are material to the financial statements, will be both workable and effective in assisting an auditor in determining which matters to communicate as a CAM. Indeed, we note that the accounting firms that would be responsible for implementing the Proposed Rules, while calling for active PCAOB and SEC monitoring both pre- and post-implementation, did not raise additional concerns in their comment letters to the Commission regarding any lack of clarity within the definition of a CAM under the Proposed Rules.
As discussed in section II.A, “Changes to PCAOB Standards,” above, under the Proposed Rules, the communication of each CAM includes: (1) Identifying the CAM; (2) describing the principal considerations that led the auditor to determine that the matter is a CAM; (3) describing how the CAM was addressed in the audit; and (4) referring to the relevant financial statement accounts or disclosures that relate to a CAM.
Some commenters, while acknowledging that much of the discussion in CAMs will focus on the audit itself, expressed concerns that the description as to
By contrast, comments from investors and investor associations indicated a desire for information directly from the auditor's point of view.
Regarding the requirement to describe the principal considerations that led to the identification of a CAM (
Further, should the auditor deem it necessary to discuss control-related matters that do not rise to the level of a material weakness within the communication of a CAM (
Regarding the requirement to describe
We agree with the Board and certain commenters that the “why” and the “how” elements of the CAM will provide investors with relevant information from the auditor's perspective that could assist them in understanding the audit, thereby reducing information asymmetries. We believe that, by providing insight into the audit, the “why” and the “how” elements will provide additional transparency to investors, which in turn will enhance investor confidence in the audit. We therefore believe this requirement is consistent with the Board's statutory mandate to “protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports.” In our view, the importance of this information to investors justifies the possibility that the auditor would provide information about a company that is not otherwise required to be disclosed by the company.
Further, we are not persuaded that the description of principal considerations will frequently lead to communication of original information, as commenters suggested. We believe that situations where auditors would be required to provide information about the company that management has not already made public would be exceptions, arising only in limited circumstances, and not a pervasive occurrence. With respect to providing original information about control deficiencies in particular, we similarly believe these situations would be rare. The especially challenging, subjective, or complex auditor judgment in these cases is typically limited to the determination as to whether a control deficiency is a significant deficiency or material weakness. The other judgment to consider when a control deficiency exists is whether and how the auditor might need to adjust the original audit plan (
At least one commenter stated that auditors may have a requirement to maintain client confidentiality under certain states' laws or professional obligations that could conflict with the Proposed Rules, if the Proposed Rules required the auditor to communicate original information about the
We agree that the communications called for by the Proposed Rules should not be precluded by existing state legal or professional obligations as to client confidentiality in light of, among other things, existing exceptions for disclosure where required by applicable law. For example, the AICPA Code of Professional Conduct articulates the professional duties of a member CPA in public practice regarding confidential client information and stipulates that “[a] member in public practice shall not disclose any confidential client information without the specific consent of the client.”
Commenters provided mixed views on the potential impact of CAM reporting on the role of the audit committee and the communication among the audit committee, management, and the auditor. Some commenters indicated they believe the public reporting of CAMs will likely result in improved communications between auditors and audit committees.
Conversely, some commenters indicated they believe there is a risk that the requirement for auditors to communicate CAMs will result in “chilled” conversation among audit committees, management, and auditors.
Similar comments were received by the PCAOB in its rulemaking process. In the release accompanying the Proposed Rules, the Board explained that it believes there should not be a chilling effect or reduced communications to the audit committee because of the requirements included in AS 1301,
We acknowledge that there exists a risk that communications between the auditor and the audit committee could be chilled, if the auditor were to avoid raising certain issues to the audit committee's attention so as to not trigger the requirement to determine whether such issues are CAMs. However, we agree with the Board's conclusion that the existing requirements to communicate matters to the audit committee—an auditing standard that would be violated if matters were not communicated—limits the risk of chilling to matters not falling within the scope of AS 1301, but falling within the scope of a CAM. In this regard, we believe it would be highly unusual for a matter to meet the definition of a CAM and not be required to be communicated to the audit committee. To illustrate this point, the following are examples of matters that are required to be communicated to the audit committee based on the requirements in AS 1301:
• Significant risks identified during the auditor risk assessment procedures;
• The nature and extent of specialized skill or knowledge needed to perform the planned audit procedures or evaluate the audit results related to a significant risk;
• Critical accounting policies and practices;
• Critical accounting estimates;
• Significant unusual transactions;
• Difficult or contentious matters for which the auditor consulted (outside of the engagement team);
• Other matters arising from the audit that are significant to the oversight of the company's financial reporting process.
The Proposed Rules provide the following nonexclusive list of factors that auditors should take into account, alone or in combination, in determining whether a matter involved especially challenging, subjective, or complex auditor judgment for purposes of evaluating whether a matter falls within the definition of a CAM:
• The auditor's assessment of the risks of material misstatement, including significant risks;
• The degree of auditor judgment related to areas in the financial statements that involved the application of significant judgment or estimation by management, including estimates with significant measurement uncertainty;
• The nature and timing of significant unusual transactions and the extent of audit effort and judgment related to these transactions;
• The degree of auditor subjectivity in applying audit procedures to address the matter or in evaluating the results of those procedures;
• The nature and extent of audit effort required to address the matter, including the extent of specialized skill or knowledge needed or the nature of consultations outside the engagement team regarding the matter; and
• The nature of audit evidence obtained regarding the matter.
Given the similarity of the two lists, we believe it would be difficult to identify an example of a matter that would meet the definition of a CAM that would not otherwise need to be communicated to the audit committee based on the requirements in AS 1301. Further, it is important to bear in mind that the mere communication of information from the auditor to the audit committee is not sufficient to meet the definition of CAM. The information communicated also would have to meet all other criteria in the definition of CAM, including that the matter involved especially challenging, subjective, or complex auditor judgment. Given auditors' existing responsibilities to discuss the matters described above with audit committees, we do not believe that the Proposed Rules are likely to chill these conversations.
As it relates to the risk that the role of the audit committee will be undermined, we emphasize that the Commission has a long history of promoting effective and independent audit committees.
Commenters provided mixed views related to potential liability impacts of the introduction of CAMs.
These concerns were also raised by commenters during the PCAOB rulemaking process. As the Board acknowledged in the release accompanying the Proposed Rules, CAMs themselves would be new statements that could be the basis for asserted claims against auditors. The Board also noted in its release that information provided regarding CAMs could be used to impact other aspects of securities fraud claims, such as providing evidence to support pleadings against an issuer, an auditor, or both.
In response to these concerns, the Board limited and clarified the process for determining CAMs, including by narrowing the source of CAMs to matters communicated or required to be communicated to the audit committee, adding a materiality component to the CAM definition, and refining the factors used to determine CAMs. We believe these modifications, as well as the CAM definition's focus on the auditor's judgment, should help mitigate potential liability concerns. For example, one of the concerns expressed by commenters regarding liability is the potential omission of CAMs within the auditor's report. By narrowing the potential matters that could be CAMs, clarifying the process for determining CAMs, and revising the definition of a CAM as discussed above, the Board has provided a framework for the auditor to evaluate and demonstrate whether a matter meets the definition of a CAM in accordance with the Proposed Rules.
We recognize, as the Board did, that mandating communication of CAMs will, by design, entail new statements in the auditor's report, thereby increasing the potential for litigation regarding such statements. However, the actual litigation impacts of these communications are difficult to predict. As the Board notes, in order to succeed, any claim based on these new statements would have to establish all of the elements of the relevant cause of action (
Nevertheless, we recognize reporting of CAMs likely will create an incremental risk of litigation and potential liability. To some degree, increased litigation risk is the by-product of any new reporting requirement and must be balanced against the perceived benefits of the required reporting. As discussed above, we are persuaded that the communication of CAMs, which can be provided only by auditors, will benefit investors and other financial statement users by providing insights into the audit—and from the auditor's own unique perspective—that can reduce information asymmetries and be used to assess a company's financial reporting and make capital allocation and voting decisions. In our view, these benefits justify any such potential incremental liability risk arising from the communication, especially in light of the steps taken by the Board to mitigate such risk, as discussed above. However, because of these risks and other concerns expressed by commenters, we expect the Board to monitor the Proposed Rules after implementation for any unintended consequences.
Several commenters expressed concerns that the costs of the Proposed
The Board's evaluation of the potential costs and benefits of the Proposed Rules was informed by information sought and obtained from stakeholders. In the course of that analysis, the Board stated that “the potential benefits and costs of the [Proposed Rules] are inherently difficult to quantify, therefore the Board's economic discussion is primarily qualitative in nature.” The Board also observed that commenters that raised concerns about the Proposed Rules' costs generally did not quantify those costs and that “[e]ven those [commenters] that, at an earlier stage of the rulemaking, conducted limited implementation testing of the proposal were unable to provide a quantified cost estimate.” Moreover, as stated in the release accompanying the Proposed Rules, as related to comments provided to the Board, “[c]ommenters provided views on a wide range of issues pertinent to economic considerations, including potential benefits and costs, but did not provide empirical data or quantified estimates of the costs or other potential impacts of the standard.” As a result, in lieu of providing a quantitative analysis, the Board engaged in a detailed qualitative assessment of the Proposed Rules' potential economic impacts, including consideration of direct and indirect benefits, costs, and potential unintended consequences.
We disagree with commenters' assertions that the Board's analysis is defective for failing to adequately quantify the costs and benefits of the Proposed Rules. Analyzing the potential economic impacts, including the costs and benefits, of a proposed rule is a key way to develop regulatory changes that are well-reasoned, with potential costs that are warranted in light of the expected benefits. We believe that a high-quality qualitative analysis can allow for this type of evaluation, particularly in those cases where quantification is not feasible.
We also agree with the Board that it would not have been feasible to quantify the potential costs and benefits of the Proposed Rules. While certain components of the total potential costs related to the Proposed Rules might be easier to estimate (
In addition, there are potential costs that might be incurred by the company as a consequence of the implementation of the Proposed Rules. For example, besides the audit committee, other executives and legal counsel may be required to expend more time and effort in discussing and reviewing the auditor's report as a consequence of the Proposed Rules. Again, estimating these costs is difficult because these costs likely will vary among audit engagements depending on the circumstances.
Potential benefits from new auditor reporting requirements are also inherently difficult to quantify. For example, to quantify the direct benefit to investors of a more useful and informative auditor's report, one would require an estimate of how their investment or voting decisions would be affected by CAMs and an estimate of the amount of profit from such decisions. Such estimates are either impossible or very difficult to calculate with reasonable reliability. In addition to the direct benefits, there may be indirect benefits from the new reporting requirements. For example, the communication of CAMs can provide some auditors, management, and audit committees with additional incentives to enhance audit quality. Enhanced audit quality ultimately can lead to a reduced cost of capital. However, at this time, it is impossible to predict the amount of reduction in cost of capital that would arise from the Proposed Rules.
Moreover, we agree with the Board's qualitative analysis of the possible economic consequences of the Proposed Rules. As they did before the Board, investors and investor associations have expressed strong support to the Commission for the Proposed Rules and stated that they expect the potential benefits to justify the potential costs.
We believe these are important benefits. The Proposed Rules are consistent with the broader economic theory regarding the benefits from enhanced disclosures. More specifically, we believe that the Proposed Rules are likely to improve the information currently available to investors and facilitate their efforts to understand the financial statements. Importantly, the Proposed Rules will assist investors in identifying those matters that relate to the relevant financial statement accounts or disclosures that involved especially challenging, subjective, or complex auditor judgment. This will, in turn, provide investors with audit-specific information directly from the auditor's point of view and add to the
Moreover, the Proposed Rules may stimulate discussions between the auditor and the company regarding CAMs, and potentially increase professional skepticism by the auditor. The public nature of CAMs may also act to further enhance auditors' professional skepticism. An increase in skepticism may lead to an increase in audit quality and, as a consequence, result in lower cost of capital for companies.
Like the Board, we recognize that there are costs associated with complying with the Proposed Rules. The Board indicated that costs to auditors are most likely to arise from additional time to prepare and review auditor's reports, including discussions with management and audit committees, as well as potential legal costs for review of the information provided in the CAMs. In addition, auditors may choose to perform more audit procedures related to areas reported as CAMs (even though auditor performance requirements have not changed in those areas), with cost implications for both auditors and companies. For auditors, costs might represent both one-time costs and recurring costs. One-time costs could be incurred as a result of: (1) Updating accounting firm audit and quality control methodologies; and (2) developing and conducting training. Recurring costs could include: (1) Drafting descriptions of CAMs and related documentation; (2) additional reviews by senior members of engagement teams, engagement quality reviewers, and national office personnel; and (3) additional time as a result of discussions with management or the audit committee regarding CAMs.
Companies, including audit committees, will likely also incur both one-time and recurring costs. One-time costs could be incurred, for example, in educating audit committee members about the requirements of the new standard and in developing management and audit committee processes for the review of draft descriptions of CAMs and the related interaction with auditors. Recurring costs could include the costs associated with carrying out those processes, potential legal costs,
We recognize that there is some level of uncertainty as to the costs that will be incurred to comply with the Proposed Rules. However, as discussed above, the Board has taken steps to mitigate those costs, including by, as an example, limiting the source of CAMs to matters communicated or required to be communicated to the audit committee and by adding a materiality component to the definition of a CAM. At the same time, for the reasons explained above, we believe that the Proposed Rules will provide significant new benefits to investors and other financial statement users. Based on the economic analysis in the release accompanying the Proposed Rules and our own evaluation of comments received by both the Board and the Commission regarding the potential economic effects of the Proposed Rules, we are persuaded that there is a sufficient basis to conclude that the potential benefits of the Proposed Rules will justify the potential related costs, and therefore, that the Proposed Rules are necessary and appropriate in the public interest and for the protection of investors.
Several commenters raised certain practical concerns with the Proposed Rules. We discuss each of these concerns in detail below.
Some commenters expressed concerns that the requirement to communicate CAMs will impose additional burdens on auditors, audit committees, and preparers during an already time-constrained period as management finalizes its annual financial statements.
We also acknowledge these concerns, but we expect most matters that will ultimately need to be communicated as CAMs will be identified throughout the audit and not just at the end of the audit. As a result, we believe much of the work can be completed prior to the time-constrained period at the end of the financial reporting process. In those cases, we encourage auditors, audit committees, and preparers to coordinate and work together before the critical year-end financial reporting period so that, if other CAMs arise later in the audit, the burden can be lessened during the finalization of the audit.
Some commenters also expressed concerns that the principles-based nature of the Proposed Rules as it pertains to both the identification and communication of CAMs could lead to inconsistent application by auditors.
We recognize commenters' concerns that the subjective requirements related to CAMs could lead to diversity in communications, but we agree with the Board that it is important for the CAM requirements, particularly the communication requirements, to be principles-based in order to meet the Board's objective of having CAM communications provide tailored, audit-specific information by the auditor within the auditor's report. We also believe the guidance provided by the Board in the release accompanying the Proposed Rules will assist auditors in implementing the Proposed Rules consistently.
Some commenters noted that the PCAOB did not include the illustrative example CAMs from the PCAOB Re-proposal in the release accompanying the Proposed Rules, and they expressed concern that the removal of these examples will add to uncertainties and confusion for auditors in reporting CAMs.
We agree with the Board's objective of providing tailored, audit-specific information and believe it is important for auditors to develop CAM descriptions that comply with the Proposed Rules without conforming to an example provided by the Board. As a result, inclusion of examples may lead to more boilerplate descriptions of CAMs. In addition, the PCAOB does present certain examples in the release accompanying the Proposed Rules to provide guidance on how to identify and communicate CAMs. The release includes examples such as, whether the auditor's evaluation of the company's ability to continue as a going concern could also represent a CAM and whether a potential illegal act, if an appropriate determination had been made that no disclosure of it was required in the financial statements, would be a CAM. The Proposed Rules also include a note incorporating four examples of potential approaches to addressing the requirement to describe how the CAM was addressed in the audit.
Commenters provided mixed perspectives related to the disclosure of auditor tenure in the auditor's report. Some commenters did not support disclosure of auditor tenure in the auditor's report. These commenters indicated such disclosure may give undue prominence to the information, thereby giving an impression that a correlation exists between auditor tenure and independence or audit quality.
As described in the release accompanying the Proposed Rules, issuers are not currently required to disclose auditor tenure, although some voluntarily choose to do so. Based on recent surveys,
As it relates to the location of the disclosure, the PCAOB does not have the statutory authority to require disclosure in the proxy statement. While the Commission does have authority to amend the proxy rules, as discussed in the release accompanying the Proposed Rules, not all companies required to be audited under PCAOB standards are subject to the proxy rules (
We believe it is important to acknowledge that the disclosure of auditor tenure does not have the same potential liability or other consequences as disclosure of the name of the engagement partner or other accounting firms. We therefore agree with the Board that such an approach is unnecessary in the Proposed Rules. Overall, we believe it is appropriate for this disclosure to appear in the auditor's report because it will provide for a consistent location and decrease search costs with respect to information about auditor tenure.
Some commenters suggested postponement or further consideration of the effective dates included in the Proposed Rules.
We believe the Board took a balanced approach to effective dates by adopting a reasonable phase-in schedule. For certain entities listed internationally, audit firms are already required to communicate information similar to CAMs. Given that the effective date for communication of CAMs for large accelerated filers is phased in first, larger firms will likely be able to observe practices developed by other firms within their global network in considering implementation questions.
As the Board discussed, the staggered approach to implementation may allow the Board to evaluate implementation by the first cohort of companies before applying the Proposed Rules to other companies. Also, the second cohort of auditors and companies will have more time to prepare, and will have the benefit of observing how the Proposed Rules have been implemented by the first cohort. The Commission itself, for many similar reasons, has used, at times, staggered implementation dates for new regulatory requirements.
Several commenters, including most notably audit firms, generally expressed support for the Proposed Rules while simultaneously expressing concern that unintended consequences may arise during implementation. These commenters stated that uncertainty surrounding the effects of the Proposed Rules would necessitate a post-implementation review.
The Commission acknowledges that the communication required of auditors by the Proposed Rules is a significant change in practice for auditors, companies, and audit committees. Accordingly, it will be important to closely monitor the implementation of the Proposed Rules, including potentially issuing incremental implementation guidance (if needed), providing PCAOB staff to be available to respond to questions and challenges as they arise, and completing a post-implementation review as soon as reasonably possible, including some analysis between effective dates for CAMs. The Commission expects the PCAOB to take such steps.
Under the Proposed Rules, the requirement to communicate CAMs would not apply to the audits of EGCs, but all other provisions within the Proposed Rules would apply to such audits.
Section 103(a)(3)(C) of the Sarbanes-Oxley Act, as amended by Section 104 of the Jumpstart Our Business Startups Act, requires that any rules of the Board “requiring mandatory audit firm rotation or a supplement to the auditor's report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer (auditor discussion and analysis)” shall not apply to an audit of an EGC. The provisions of the Proposed Rules applicable to the audits of EGCs do not fall into this category.
In proposing application of certain of the Proposed Rules to audits of all issuers, including EGCs, the PCAOB requested that the Commission make the determination required by Section 103(a)(3)(C). To facilitate the Commission's determination, the Board provided information identified by the Board's staff from public sources, including data and analysis of EGCs that sets forth its views as to why it believes certain of the Proposed Rules should apply to audits of EGCs.
To inform consideration of the application of auditing standards to audits of EGCs, the PCAOB staff has also published a white paper that provides general information about characteristics of EGCs.
We expect that the changes to the auditor's report that would be applied to the audits of EGCs under the Proposed Rules, will: (1) Provide a consistent location and decrease search costs with respect to information about auditor tenure; (2) enhance users' understanding of the auditor's role; and (3) make the auditor's report easier to read and facilitate comparison across companies by making the format of the report more uniform. Given the relatively straightforward nature of the additional changes to the auditor's report, we expect that the costs associated with these changes will not be significant and will be primarily one-time, rather than recurring, costs. Overall, we expect the changes to increase the efficiency with which users are able to locate and understand the information presented in the auditor's report. We do not expect the changes to
The Commission has carefully reviewed and considered the Proposed Rules, the information submitted therewith by the PCAOB, and the comment letters received. In connection with the PCAOB's filing and the Commission's review,
A. The Commission finds that the Proposed Rules are consistent with the requirements of the Sarbanes-Oxley Act and the securities laws and are necessary or appropriate in the public interest or for the protection of investors; and
B. Separately, the Commission finds that the application of the Proposed Rules to the audits of EGCs, which do not have a requirement to communicate CAMs, is necessary or appropriate in the public interest, after considering the protection of investors and whether the action will promote efficiency, competition, and capital formation.
By the Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange seeks to amend its Amended and Restated Certificate of Incorporation. The text of the proposed rule change is provided below.
The name of the corporation is Bats BYX Exchange, Inc. The corporation filed its original Certificate of Incorporation with the Secretary of State of the State of Delaware on July 30, 2009
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
BYX recently amended its Certificate of Incorporation in connection with a corporate transaction (the “Transaction”) involving, among other things, the recent acquisition of BYX, along with Bats BZX Exchange, Inc. (“Bats BZX”), Bats EDGX Exchange, Inc. (“Bats EDGX”), and Bats EDGA Exchange, Inc. (“Bats EDGA” and, together with Bats BYX, Bats EDGX, and Bats BZX, the “Bats Exchanges”) by CBOE Holdings, Inc. (“CBOE Holdings”). CBOE Holdings is also the parent of Chicago Board Options Exchange, Incorporated (“CBOE”) and C2 Options Exchange, Incorporated (“C2”). Particularly, the filing proposed, among other things, to amend and restate the certificate of incorporation of the Exchange based on certificates of incorporation of CBOE and C2.
Particularly, Section 245(c) of the Delaware General Corporation Law (DGCL) requires that a restated certificate of incorporation “shall state, either in its heading or in an introductory paragraph, the corporation's present name, and, if it has been changed, the name under which it was originally incorporated, and the date of filing of its original certificate of incorporation with the secretary of state.” The Exchange notes that the conformed Certificate did not reference the name under which the corporation was originally incorporated (
The Exchange also notes that the last sentence of the introductory paragraph which provides that the current certificate is “amended, integrated and restated to read in its entirety as follows:” mistakenly references the new
The Exchange notes that the proposed changes are concerned solely with the administration of the Exchange and do not affect the meaning, administration, or enforcement of any rules of the Exchange or the rights, obligations, or privileges of Exchange members or their associated persons is [sic] any way.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the Exchange believes correcting inadvertent non-substantive, technical errors in its Certificate in order to comply with Delaware law and reflect the correct and accurate version of the Certificate that was amended will avoid potential confusion, thereby removing impediments to, and perfecting the mechanism for a free and open market and a national market system, and, in general, protecting investors and the public interest of market participants. As noted above, the proposed changes do not affect the meaning, administration, or enforcement of any rules of the Exchange or the rights, obligations, or privileges of Exchange members or their associated persons is any way.
The Exchange does not believe the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Rather, the proposed rule change is merely attempting to correct inadvertent technical errors in the Exchange's introductory paragraph of its Certificate. The proposed rule change has no impact on competition.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Securities and Exchange Commission (“Commission”).
Notice.
Notice of an application under section 6(c) of the Investment Company Act of 1940 (the “Act”) for an exemption from sections 18(a)(2), 18(c) and 18(i) of the Act, under sections 6(c) and 23(c)(3) of the Act for an exemption from rule 23c-3 under the Act, and for an order pursuant to section 17(d) of the Act and rule 17d-1 under the Act.
Applicants request an order to permit certain registered closed-end management investment companies to issue multiple classes of shares and to impose asset-based distribution and shareholder service fees and early withdrawal charges.
Blackstone/GSO Floating Rate Enhanced Income Fund (“BGFREI”), GSO/Blackstone Debt Funds Management LLC (the “Adviser”), and Blackstone Advisory Partners L.P. (the “Distributor”).
The application was filed on July 3, 2017 and amended on October 17, 2017.
An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on November 17, 2017, and should be accompanied by proof of service on the applicants, in the form of an affidavit, or, for lawyers, a certificate of service. Pursuant to rule 0-5 under the Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090; Applicants: 345 Park Avenue, 31st Floor, New York, NY 10154.
Asen Parachkevov, Senior Counsel, or David Marcinkus, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or for an applicant using the Company name box, at
1. BGFREI is a Delaware statutory trust that is registered under the Act as a continuously offered, non-diversified, closed-end management investment company that will be operated as an interval fund. BGFREI's investment objective is to provide attractive income with low sensitivity to rising interest rates.
2. The Adviser is a Delaware limited liability company and is registered as an investment adviser under the Investment Advisers Act of 1940. The Adviser serves as investment adviser to BGFREI.
3. The applicants seek an order to permit the Funds (as defined below) to issue multiple classes of shares, each having its own fee and expense structure and to impose repurchase fees, early withdrawal charges, and asset-based distribution and shareholder service fees with respect to certain classes.
4. Applicants request that the order also apply to any continuously-offered registered closed-end management investment company that has been previously organized or that may be organized in the future for which the Adviser or any entity controlling, controlled by, or under common control with the Adviser, or any successor in interest to any such entity,
5. BGFREI intends to engage in a continuous offering of its shares of beneficial interest. Applicants state that additional offerings by any Fund relying on the order may be on a private placement or public offering basis. Shares of the Funds will not be listed on any securities exchange nor publicly traded. There is currently no secondary market for the Funds' shares and the Funds expect that no secondary market will develop.
6. If the requested relief is granted, BGFREI will offer Class T, Class D and Class I shares, with each class having its own fee and expense structure, and may also offer additional classes of shares in the future. Because of the different distribution and/or shareholder services fees, services and any other class expenses that may be attributable to each of BGFREI's Class T, Class D and Class I shares, the net income attributable to, and the dividends payable on, each class of shares may differ from each other.
7. Applicants state that, from time to time, the Funds may create additional classes of shares, the terms of which may differ from Class T, Class D and Class I shares in the following respects: (i) The amount of fees permitted by different distribution plans or different shareholder services fee arrangements; (ii) voting rights with respect to a distribution and/or shareholder services plan of a class; (iii) different class designations; (iv) the impact of any class expenses directly attributable to a particular class of shares allocated on a class basis as described in the application; (v) any differences in dividends and net asset value resulting from differences in fees under a distribution and/or shareholder services plan or in class expenses; (vi) any early withdrawal charge or other sales load structure; and (vii) exchange or conversion privileges of the classes as permitted under the Act.
8. Applicants state that BGFREI is also seeking exemptive relief from the Commission to permit it to adopt a fundamental policy to repurchase 5% of its shares at net asset value on a monthly basis.
9. Applicants represent that any asset-based shareholder services and
10. Each of the Funds will comply with any requirements that the Commission or FINRA may adopt regarding disclosure at the point of sale and in transaction confirmations about the costs and conflicts of interest arising out of the distribution of open-end investment company shares, and regarding prospectus disclosure of sales loads and revenue sharing arrangements, as if those requirements applied to the Fund. In addition, each Fund will contractually require that any distributor of the Fund's shares comply with such requirements in connection with the distribution of such Fund's shares.
11. Each Fund will allocate all expenses incurred by it among the various classes of shares based on the net assets of the Fund attributable to each class, except that the net asset value and expenses of each class will reflect distribution fees, shareholder service fees, and any other incremental expenses of that class. Expenses of the Fund allocated to a particular class of shares will be borne on a pro rata basis by each outstanding share of that class. Applicants state that each Fund will comply with the provisions of rule 18f-3 under the Act as if it were an open-end investment company.
12. Applicants state that each Fund may impose an early withdrawal charge on shares submitted for repurchase that have been held less than a specified period and may waive the early withdrawal charge for certain categories of shareholders or transactions to be established from time to time. Applicants state that each of the Funds will apply the early withdrawal charge (and any waivers or scheduled variations of the early withdrawal charge) uniformly to all shareholders in a given class and consistently with the requirements of rule 22d-1 under the Act as if the Funds were open-end investment companies.
13. Applicants state that BGFREI will (and any Future Fund, as applicable, may) charge a repurchase fee of up to 2% on the common shares accepted for repurchase (including those that have been held by the investor for less than one year), in addition to any early withdrawal charge. Shares of any Future Fund, to the extent such Future Fund does not comply with the requirements of rule 23c-3 under the Act, will be subject to a repurchase fee at a rate no greater than 2% of a shareholder's repurchase proceeds if the date as of which the shares are to be valued for purposes of repurchase is less than one year following the investor's initial investment in such Future Fund. Repurchase fees will equally apply to new class shares and to all classes of shares of BGFREI (and any Future Fund, as applicable), consistent with section 18 of the Act and rule 18f-3 thereunder. To the extent BGFREI (and any Future Fund, as applicable) determines to waive, impose scheduled variations of, or eliminate a repurchase fee, it will do so consistently with the requirements of rule 22d-1 under the Act and as if such fund were an open-end investment company and such Fund's waiver of, scheduled variation in, or elimination of, the repurchase fee will apply uniformly to all shareholders of such fund regardless of class.
14. Each Fund operating as an interval fund pursuant to rule 23c-3 under the Act may offer its shareholders an exchange feature under which the shareholders of the Fund may, in connection with the Fund's periodic repurchase offers, exchange their shares of the Fund for shares of the same class of (i) registered open-end investment companies or (ii) other registered closed-end investment companies that comply with rule 23c-3 under the Act and continuously offer their shares at net asset value, that are in the Fund's group of investment companies (collectively, “Other Funds”). Shares of a Fund operating pursuant to rule 23c-3 that are exchanged for shares of Other Funds will be included as part of the amount of the repurchase offer amount for such Fund as specified in rule 23c-3 under the Act. Any exchange option will comply with rule 11a-3 under the Act, as if the Fund were an open-end investment company subject to rule 11a-3. In complying with rule 11a-3, each Fund will treat an early withdrawal charge as if it were a contingent deferred sales load.
1. Section 18(a)(2) of the Act provides that a closed-end investment company may not issue or sell a senior security that is a stock unless certain requirements are met. Applicants state that the creation of multiple classes of shares of the Funds may violate section 18(a)(2) because the Funds may not meet such requirements with respect to a class of shares that may be a senior security.
2. Section 18(c) of the Act provides, in relevant part, that a closed-end investment company may not issue or sell any senior security if, immediately thereafter, the company has outstanding more than one class of senior security. Applicants state that the creation of multiple classes of shares of the Funds may be prohibited by section 18(c), as a class may have priority over another class as to payment of dividends because shareholders of different classes would pay different fees and expenses.
3. Section 18(i) of the Act provides that each share of stock issued by a registered management investment company will be a voting stock and have equal voting rights with every other outstanding voting stock. Applicants state that multiple classes of shares of the Funds may violate section 18(i) of the Act because each class would be entitled to exclusive voting rights with respect to matters solely related to that class.
4. Section 6(c) of the Act provides that the Commission may exempt any person, security or transaction or any class or classes of persons, securities or transactions from any provision of the Act, or from any rule or regulation under the Act, if and to the extent such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants request an exemption under section 6(c)
5. Applicants submit that the proposed allocation of expenses relating to distribution and voting rights among multiple classes is equitable and will not discriminate against any group or class of shareholders. Applicants submit that the proposed arrangements would permit a Fund to facilitate the distribution of its shares and provide investors with a broader choice of shareholder services. Applicants assert that the proposed closed-end investment company multiple class structure does not raise the concerns underlying section 18 of the Act to any greater degree than open-end investment companies' multiple class structures that are permitted by rule 18f-3 under the Act. Applicants state that each Fund will comply with the provisions of rule 18f-3 as if it were an open-end investment company.
1. Section 23(c) of the Act provides, in relevant part, that no registered closed-end investment company shall purchase securities of which it is the issuer, except: (a) On a securities exchange or other open market; (b) pursuant to tenders, after reasonable opportunity to submit tenders given to all holders of securities of the class to be purchased; or (c) under other circumstances as the Commission may permit by rules and regulations or orders for the protection of investors.
2. Rule 23c-3 under the Act permits a registered closed-end investment company (an “interval fund”) to make repurchase offers of between five and twenty-five percent of its outstanding shares at net asset value at periodic intervals pursuant to a fundamental policy of the interval fund. Rule 23c-3(b)(1) under the Act permits an interval fund to deduct from repurchase proceeds only a repurchase fee, not to exceed two percent of the proceeds, that is paid to the interval fund and is reasonably intended to compensate the fund for expenses directly related to the repurchase.
3. Section 23(c)(3) provides that the Commission may issue an order that would permit a closed-end investment company to repurchase its shares in circumstances in which the repurchase is made in a manner or on a basis that does not unfairly discriminate against any holders of the class or classes of securities to be purchased.
4. Applicants request relief under section 6(c), discussed above, and section 23(c)(3) from rule 23c-3 to the extent necessary for the Funds to impose early withdrawal charges on shares of the Funds submitted for repurchase that have been held for less than a specified period.
5. Applicants state that the early withdrawal charges they intend to impose are functionally similar to contingent deferred sales loads imposed by open-end investment companies under rule 6c-10 under the Act. Rule 6c-10 permits open-end investment companies to impose contingent deferred sales loads, subject to certain conditions. Applicants note that rule 6c-10 is grounded in policy considerations supporting the employment of contingent deferred sales loads where there are adequate safeguards for the investor and state that the same policy considerations support imposition of early withdrawal charges in the interval fund context. In addition, applicants state that early withdrawal charges may be necessary for the distributor to recover distribution costs. Applicants represent that any early withdrawal charge imposed by the Funds will comply with rule 6c-10 under the Act as if the rule were applicable to closed-end investment companies. The Funds will disclose early withdrawal charges in accordance with the requirements of Form N-1A concerning contingent deferred sales loads.
1. Section 17(d) of the Act and rule 17d-1 under the Act prohibit an affiliated person of a registered investment company, or an affiliated person of such person, acting as principal, from participating in or effecting any transaction in connection with any joint enterprise or joint arrangement in which the investment company participates unless the Commission issues an order permitting the transaction. In reviewing applications submitted under section 17(d) and rule 17d-1, the Commission considers whether the participation of the investment company in a joint enterprise or joint arrangement is consistent with the provisions, policies and purposes of the Act, and the extent to which the participation is on a basis different from or less advantageous than that of other participants.
2. Rule 17d-3 under the Act provides an exemption from section 17(d) and rule 17d-1 to permit open-end investment companies to enter into distribution arrangements pursuant to rule 12b-1 under the Act. Applicants request an order under section 17(d) and rule 17d-1 under the Act to the extent necessary to permit the Fund to impose asset-based distribution and shareholder service fees. Applicants have agreed to comply with rules 12b-1 and 17d-3 as if those rules applied to closed-end investment companies, which they believe will resolve any concerns that might arise in connection with a Fund financing the distribution of its shares through asset-based distribution fees.
For the reasons stated above, applicants submit that the exemptions requested under section 6(c) are necessary and appropriate in the public interest and are consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants further submit that the relief requested pursuant to section 23(c)(3) will be consistent with the protection of investors and will insure that applicants do not unfairly discriminate against any holders of the class of securities to be purchased. Finally, applicants state that the Funds' imposition of asset-based distribution and shareholder service fees is consistent with the provisions, policies and purposes of the Act and does not involve participation on a basis different from or less advantageous than that of other participants.
Applicants agree that any order granting the requested relief will be subject to the following condition:
Each Fund relying on the order will comply with the provisions of rules 6c-10, 12b-1, 17d-3, 18f-3, 22d-1, and, where applicable, 11a-3 under the Act, as amended from time to time, as if those rules applied to closed-end management investment companies, and will comply with the FINRA Sales Charge Rule, as amended from time to time, as if that rule applied to all closed-end management investment companies.
For the Commission, by the Division of Investment Management, under delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange filed a proposal to amend Rule 11.10, Order Execution, to remove language allowing a change to the minimum quantity of an order with a Minimum Execution Quantity
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to remove language allowing a change to the minimum quantity of an order with a Minimum Execution Quantity instruction to be included in a Replace message. The proposed amendments would harmonize the rule with the rules of its affiliate exchanges, BYX, BZX, and EDGA.
A Minimum Execution Quantity enables a User
Paragraph (e)(3) of Rule 11.10 states that other than changing a Limit Order to a Market Order, only the price, Stop Price,
The Exchange believes that its proposal is consistent with Section 6(b) of the Act
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. The proposed amendment to paragraph (e)(3) of Rule 11.10 would not have any impact on competition as it simply clarifies the rule by removing language that reflects functionality not offered by the Exchange.
No comments were solicited or received on the proposed rule change.
Because the foregoing proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-BatsEDGX-2017-38. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange filed a proposal to update Rule 21.1 to make modifications to the Exchange's rules and functionality applicable to the Exchange's options platform (“BZX Options”) in preparation for the technology migration of the Exchange's affiliated options exchange, C2 Options Exchange, Incorporated (“C2”), onto the same technology as the Exchange.
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
In 2016, the Exchange and its affiliates Bats BYX Exchange, Inc. (“BYX”), Bats EDGA Exchange, Inc. (“EDGA”), and Bats EDGX Exchange, Inc. (“EDGX”) received approval to affect a merger (the “Merger”) of the Exchange's indirect parent company, Bats Global Markets, Inc. (“BGM”), with CBOE Holdings, Inc. (“CBOE Holdings”), the direct parent of Chicago Board Options Exchange, Incorporated (“CBOE”) and C2 Options Exchange, Incorporated (“C2”, and together with the Exchange, BYX, EDGA, EDGX, and CBOE the “CBOE Affiliated Exchanges”).
The Exchange proposes to modify its rules regarding Stop Orders and Stop Limit Orders, as defined in Rules 21.1(d)(11) and (d)(12), respectively.
Stop Orders are currently defined in Rule 21.1(d)(11) as an order that becomes a Market Order
The Exchange proposes to modify Stop Orders and Stop Limit Orders to add that such orders will be elected based on quotations as well. Specifically, in addition to electing a Stop Order or Stop Limit Order to buy (sell) when the consolidated last sale in the option occurs at or above (below), the specified stop price, the Exchange proposes to elect such an order when the NBB (NBO) is equal to or higher (lower) than the stop price. The Exchange notes that CBOE and C2 also trigger stop orders based on quotations.
The Exchange also proposes a minor change to the definition of Stop Limit Orders to ensure that there is consistent language between Stop Limit Orders to buy and Stop Limit Orders to sell. The current language related to Stop Limit Orders to buy focuses on the election of such orders whereas the current language related to Stop Limit Orders to sell focuses on the conversion of such orders to limit orders. The Exchange proposes to include language related both election and conversion to limit orders with respect to both Stop Limit Orders to buy and Stop Limit Orders to sell.
In addition, the Exchange proposes to restrict Stop Orders, which, as described above are converted to Market Orders when elected, from being elected when the underlying security is in a Limit State, as defined in the Limit Up-Limit Down Plan. Such an order would be held until the end of the Limit State, at which point the order would again become eligible to be elected. This aspect of the proposal is also based on the rules of CBOE
Below are examples of the current and proposed functionality for Stop Orders and Stop Limit Orders.
Assume the NBBO is 7.80 x 8.00. Assume that a User submits a Stop
• Assume the NBBO updates to 8.00 by 8.05. An execution reported by another exchange at 8.05 will trigger the stop price of the Stop Order, which will convert into a Market Order to buy.
• Note: this example would still be accurate under the proposed functionality, however, there is an additional way that a Stop Order could be elected, a change to the NBBO, as set forth in Example 1B below.
Assume the NBBO is 7.80 x 8.00. Assume that a User submits a Stop Order to buy 500 shares with a stop price of 8.05.
• Assume the NBBO updates to 8.05 by 8.10. The NBB equal to the stop price of the order will trigger the stop price of the Stop Order, which will convert into a Market Order to buy. The result would be the same if the NBB were instead higher than the stop price, such as with an NBBO of 8.10 by 8.15.
Assume the NBBO is 7.80 x 8.00. Assume that a User submits a Stop Limit Order to buy 500 shares at 8.04 with stop limit price of 8.05.
• Assume the NBBO updates to 8.03 by 8.05. An execution reported by another exchange at 8.05 will trigger the stop price of the Stop Limit Order, which will convert into a limit order to buy at 8.04.
• Note: this example would still be accurate under the proposed functionality, however, there is an additional way that a Stop Limit Order could be elected, a change to the NBBO, as set forth in Example 2B.
Assume the NBBO is 7.80 x 8.00. Assume that a User submits a Stop Limit Order to buy 500 shares at 8.04 with stop limit price of 8.05.
Assume the NBBO updates to 8.05 by 8.10. The NBB equal to the stop price of the order will trigger the stop price of the Stop Limit Order, which will convert into a limit order to buy at 8.04. The result would be the same if the NBB were instead higher than the stop price, such as with an NBBO of 8.10 by 8.15.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act
The Exchange believes the proposed amendment will reduce complexity and increase the understanding of the Exchange's operations for all Users of the Exchange. In particular, by triggering Stop Orders and Stop Limit Orders based on quotations, in addition to trades, the Exchange's functionality will be more similar to that of CBOE and C2. In turn, when CBOE and C2 are migrated to the same technology as that of the Exchange, Users of the Exchange and other CBOE Affiliated Exchanges will have access to similar functionality on all CBOE Affiliated Exchanges. As such, the proposed rule change would foster cooperation and coordination with persons engaged in facilitating transactions in securities and would remove impediments to and perfect the mechanism of a free and open market and a national market system.
With respect to Stop Orders not being elected when the underlying security is in a Limit State, this proposal is based on the rules of CBOE and C2 and is also consistent with the Exchange's current handling of Market Orders, which are not accepted when the underlying security is in a Limit State.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange notes that the proposal will further promote consistency between the Exchange and its affiliated exchanges, and is part of a larger technology integration that will ultimately reduce complexity for Users of the Exchange that are also participants on other CBOE Affiliated Exchanges. The Exchange does not believe that the proposed changes will have any direct impact on competition. Thus, the Exchange does not believe that the proposal creates any significant impact on competition.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties.
Because the foregoing proposed rule change does not: (A) Significantly affect the protection of investors or the public interest; (B) impose any significant burden on competition; and (C) by its terms, become operative for 30 days from the date on which it was filed or such shorter time as the Commission may designate it has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investor and the public interest. The Commission notes that the proposed rule change is based on rules of its affiliated exchanges, CBOE and C2, and thus does not raise any new or novel issues. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposed rule change as operative upon filing.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (1) Necessary or appropriate in the public interest; (2) for the protection of investors; or (3) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Exchange Act” or “Act”)
The MSRB filed with the Commission a proposed rule change to amend Form G-45 under MSRB Rule G-45, on reporting of information on municipal fund securities,
The text of the proposed rule change is available on the MSRB's Web site at
In its filing with the Commission, the MSRB included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The MSRB has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The ABLE Act added Section 529A to the Internal Revenue Code of 1986, as amended (the “Code”), to permit a state, or an agency or instrumentality thereof, to establish and maintain a new type of tax-advantaged savings program to help support individuals with disabilities in
Given the similarities between the structure of ABLE accounts and 529 college savings plan accounts and the manner in which interests in ABLE accounts would be distributed, the MSRB requested and received interpretive guidance from the SEC staff about the status of interests in ABLE accounts under the federal securities laws.
After the MSRB received the SEC staff guidance, the MSRB provided interpretative guidance relating to interests in ABLE programs under MSRB Rule D-12, on the definition of “municipal fund security.”
Specifically, in August 2016, the MSRB filed for immediate effectiveness an amendment to Rule G-45 to delay, by two years from August 29, 2016 until August 29, 2018, the date that submissions are due under Rule G-45 from underwriters to ABLE programs (the “August filing”).
At the time the MSRB submitted the August filing, there were two ABLE programs that were operational. Since that time, the MSRB understands that 27 more ABLE programs have become operational. As each additional ABLE program has become operational, the MSRB has reviewed the disclosure booklet for the program to determine whether there is data about the programs that would be beneficial for the MSRB to analyze under Rule G-45 that an underwriter to an ABLE program would not be required to submit under current Form G-45. But for the program type, the review process of ABLE program fees was identical to the review process that the MSRB used in determining the data elements relating to the fees and expenses associated with an investment in a 529 college savings plan when the MSRB first developed Form G-45.
While the MSRB believes that current Form G-45 would capture most of the data that would be informative to the MSRB, the MSRB noted that there are differences between the pricing structure of certain ABLE programs and the typical 529 college savings plan. Specifically, based on the MSRB's review, there are transactional fees assessed by ABLE programs that generally are not assessed by 529 college savings plans, and there is variance based on state residency in the level of the account maintenance fee assessed by ABLE programs that generally does not occur with 529 college savings plans.
Rule G-45 requires dealers acting in the capacity as underwriters to ABLE programs or 529 college savings plans to submit on a semi-annual or annual basis (in the case of performance data) certain information about the programs or plans they underwrite. That information includes program or plan descriptive information, assets, asset allocation information (at the investment option level), contributions, withdrawals, fee and cost structure, performance, and other information. The MSRB and other regulatory authorities use this data to analyze 529 college savings plans (and will be able to use this data to analyze ABLE programs), monitor their growth rate, size and investment options, and compare 529 college savings plans based on fees, costs, and performance. By collecting this information, the MSRB enhances its understanding of 529 college savings plans (and will be able to enhance its understanding of ABLE programs). The Commission has agreed with the MSRB that the collection of information under Rule G-45 is intended to protect investors, municipal entities and the public interest and prevent fraudulent and manipulative acts and practices by allowing the MSRB to collect comprehensive, reliable, and consistent electronic data about such programs or
To help ensure that the MSRB continues to receive comprehensive information regarding ABLE programs and 529 college savings plans, the proposed rule change would amend Form G-45 to collect additional information relating to fees and expenses. This data would enhance the MSRB's understanding of the markets for ABLE programs and 529 college savings plans, including the differences among such programs or plans. Further, as discussed under “Statutory Basis” below, the additional fee and expense information would assist the MSRB in fulfilling its investor protection mission. The information about fees and expenses would continue to be submitted in a format that is consistent with the disclosure principles of the College Savings Plan Network (“CSPN”), an affiliate of the National Association of State Treasurers,
To assist underwriters, the MSRB included subheadings in how certain investment options fees and expenses are displayed on Form G-45 to more closely correspond with the subheadings used in Disclosure Principles No. 6. The subheadings, however, do not change any of the data elements required to be submitted on Form G-45.
Under the proposed rule change, an underwriter to an ABLE program or a 529 college savings plan would be required to submit data on Form G-45 about the following additional fees and expenses, as applicable:
• Account opening fee;
• investment administration fee;
• change in account owner fee;
• cancellation/withdrawal fee;
• change in investment option/transfer fee;
• rollover fee;
• returned excess aggregate contributions fee;
• rejected ACH or EFT fee;
• overnight delivery fee;
• in-network ATM fee;
• out-of-network ATM fee;
• ATM mini statement fee;
• international POS/ATM transaction fee;
• foreign transaction fee;
• overdraft fee;
• copy of check or statement fee (per request);
• copy of check images mailed with monthly statement fee;
• check fee (
• returned check fee;
• checking account option fee;
• re-issue of disbursement check fee;
• stop payment fee;
• debit card fee;
• debit card replacement fee;
• outgoing wire fee;
• expedited debit card rush delivery fee;
• paper fee; and
• miscellaneous fee (to address any miscellaneous transactional fee that is not otherwise specified on Form G-45).
In addition, under the proposed rule change, the MSRB would collect data about any variance in the annual account maintenance fee due to the residency of the account owner. The proposed rule would apply to underwriters to ABLE programs as well as to underwriters to 529 college savings plans.
The MSRB believes that the proposed rule change is consistent with Section 15B(b)(2)(C) of the Act,
be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in municipal securities and municipal financial products, to remove impediments to and perfect the mechanism of a free and open market in municipal securities and municipal financial products, and, in general, to protect investors, municipal entities, obligated persons, and the public interest.
The Act requires that the MSRB protect investors. To fulfill this responsibility, it is necessary for the MSRB to have a complete and reliable data set about ABLE programs and 529 college savings plans. That data includes data about the fees and expenses associated with an investment in an ABLE program or a 529 college savings plan. The proposed rule change would provide the MSRB with more meaningful data about the transactional fees primarily assessed by ABLE programs and about variances in the account maintenance fee due to the residency of the account owner. The additional information about fees and expenses associated with ABLE programs and 529 college savings plans would facilitate the MSRB's ability to analyze the market for ABLE programs and 529 college savings plans as well as to evaluate trends and differences among the ABLE programs and 529 college savings plans. The MSRB believes that understanding the costs associated with ABLE programs and 529 college savings plans as well as the other data collected under Rule G-45 are basic requirements for regulation and necessary to assist the MSRB with its evaluation as to whether its regulatory scheme for dealers that sell interests in or underwrite ABLE programs and/or 529 college savings plans is sufficient, or whether additional rulemaking is necessary to protect investors. Further, the information that would be collected by the proposed rule change would help the MSRB and other regulators that examine dealers prioritize their efforts with respect to those dealers that sell interests in or underwrite ABLE programs and 529 college savings plans. Those other regulators may use this information to determine the nature or timing of risk-based dealer examinations. In short, the MSRB believes that the information to be collected by the proposed rule change would better enable the MSRB to protect investors in these programs and plans and the public interest.
Further, the MSRB has a statutory obligation to prevent fraudulent and manipulative acts and practices and to promote just and equitable principles of trade. In general, underwriters to ABLE programs and 529 college savings plans draft or participate in the drafting of the program or plan disclosure booklets, as well as the marketing materials for the ABLE program or 529 college savings plans. The MSRB or other regulators may use the information submitted on Form G-45 to, among other things, determine if the disclosure documents or marketing materials prepared or reviewed by underwriters are consistent with the data submitted to the MSRB for regulatory purposes.
Section 15B(b)(2)(C) of the Act requires that MSRB rules not be designed to impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
The proposed rule change would require an underwriter to submit additional information about the fees and expenses associated with the applicable ABLE program or 529 college savings plan. The proposed rule change would enable the MSRB to carry out its regulatory responsibilities under the Act and fulfill its mission to ensure efficiency in the market for these programs. The MSRB would realize substantial benefits in obtaining reliable and consistent information about the fees and expenses of ABLE programs and 529 college savings plans, promoting greater regulatory oversight and investor protection.
Although there are costs associated with compliance with the proposed rule change, these costs should be minimal. The data that the MSRB wishes to collect are readily available and should be known to the underwriters of these plans. Additionally, underwriters are already required to submit certain information to the MSRB on Form G-45 on a semi-annual basis.
Among the possible alternatives to the proposed rule change are (a) a manual review of information in program or plan disclosure documents submitted to EMMA or on program or plan Web sites; or (b) a review of data supplied by information vendors voluntarily. However, neither of these alternatives would satisfy the regulatory needs of the MSRB. A manual review of information would be insufficient because some of the information sought by the MSRB is not disclosed in public documents in a uniform and consistent manner. Moreover, a manual review of information would be time consuming and inefficient, especially given that underwriters are already required to submit certain information to the MSRB on a semi-annual basis. In addition, while a review of information voluntarily submitted to informational vendors may be of interest, it is unreliable from a regulatory standpoint. Information supplied by dealers that are underwriters to ABLE programs and/or 529 college savings plans to information vendors may differ with respect to its reliability and quality. Essentially, the MSRB would be relying on such information vendors for important regulatory activities. For regulatory purposes, the MSRB seeks a consistent set of uniform, reliable and relevant information about ABLE programs and 529 college savings plans.
On balance, the MSRB believes that semi-annual reporting of limited information, which is readily available to dealers that are underwriters to ABLE programs and/or 529 college savings plans, would not pose an unreasonable burden on such underwriters, and the likely benefits of the proposed amendments justify the likely associated costs in both the near and long term.
The MSRB does not believe that the proposed rule change would impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The additional information would be submitted on an equal and non-discriminatory basis, and the requirement would apply equally to all dealers that serve as underwriters to ABLE programs and/or 529 college savings plans.
Written comments were neither solicited nor received on the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549.
For the Commission, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange filed a proposal to update Rule 21.1 to make modifications to the Exchange's rules and functionality applicable to the Exchange's options platform (“EDGX Options”) in preparation for the technology migration of the Exchange's affiliated options exchange, C2 Options Exchange, Incorporated (“C2”), onto the same technology as the Exchange.
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
In 2016, the Exchange and its affiliates Bats BZX Exchange, Inc. (“BZX”), Bats BYX Exchange, Inc. (“BYX”), and Bats EDGA Exchange, Inc. (“EDGA”) received approval to affect a merger (the “Merger”) of the Exchange's indirect parent company, Bats Global Markets, Inc. (“BGM”), with CBOE Holdings, Inc. (“CBOE Holdings”), the direct parent of Chicago Board Options Exchange, Incorporated (“CBOE”) and C2 Options Exchange, Incorporated (“C2”, and together with the Exchange, BZX, BYX, EDGA, and CBOE the “CBOE Affiliated Exchanges”).
The Exchange adopt Stop Orders and Stop Limit Orders, to be defined in Rules 21.1(d)(11) and (d)(12), respectively. In order to adopt such rules, the Exchange also proposes to re-number current Rule 21.1(d)(10) (related to “Intermarket Sweep Orders”) as Rule 21.1(d)(9) (currently reserved), and current Rule 21.1(d)(11) (related to “Qualified Continent Cross Orders”) as Rule 21.1(d)(10).
A Stop Order would be defined in Rule 21.1(d)(11) as an order that becomes a Market Order
In addition, the Exchange proposes to restrict Stop Orders, which, as described above, are converted to Market Orders when elected, from being elected when the underlying security is in a Limit State, as defined in the Limit Up-Limit Down Plan. Such an order would be held until the end of the Limit State, at which point the order would again become eligible to be elected. This aspect of the proposal is also based on the rules of CBOE
A Stop Limit Order would be defined in Rule 21.1(d)(12) as an order that becomes a limit order when the stop price is elected. A Stop Limit Order to buy would be elected and would become a buy limit order when the consolidated last sale in the option
The Exchange notes that CBOE and C2 also trigger stop orders based trades and quotations.
Below are examples of the proposed functionality for Stop Orders and Stop Limit Orders.
Assume the NBBO is 7.80 × 8.00. Assume that a User submits a Stop Order to buy 500 shares with a stop price of 8.05.
• Assume the NBBO updates to 8.00 by 8.05. An execution reported by another exchange at 8.05 will trigger the stop price of the Stop Order, which will convert into a Market Order to buy.
Assume the NBBO is 7.80 × 8.00. Assume that a User submits a Stop Order to buy 500 shares with a stop price of 8.05.
• Assume the NBBO updates to 8.05 by 8.10. The NBB equal to the stop price of the order will trigger the stop price of the Stop Order, which will convert into a Market Order to buy. The result would be the same if the NBB were instead higher than the stop price, such as with an NBBO of 8.10 by 8.15.
Assume the NBBO is 7.80 × 8.00. Assume that a User submits a Stop Limit Order to buy 500 shares at 8.04 with stop limit price of 8.05.
• Assume the NBBO updates to 8.03 by 8.05. An execution reported by another exchange at 8.05 will trigger the stop price of the Stop Limit Order, which will convert into a limit order to buy at 8.04.
Assume the NBBO is 7.80 × 8.00. Assume that a User submits a Stop Limit Order to buy 500 shares at 8.04 with stop limit price of 8.05.
• Assume the NBBO updates to 8.05 by 8.10. The NBB equal to the stop price of the order will trigger the stop price of the Stop Limit Order, which will convert into a limit order to buy at 8.04. The result would be the same if the NBB were instead higher than the stop price, such as with an NBBO of 8.10 by 8.15.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act
The Exchange believes the proposed amendment will reduce complexity and increase the understanding of the Exchange's operations for all Users of the Exchange. In particular, by offering Stop Orders and Stop Limit Orders, the Exchange's functionality will be more similar to that of CBOE and C2. In turn, when CBOE and C2 are migrated to the same technology as that of the Exchange, Users of the Exchange and other CBOE Affiliated Exchanges will have access to similar functionality. As such, the proposed rule change would foster cooperation and coordination with persons engaged in facilitating transactions in securities and would remove impediments to and perfect the mechanism of a free and open market and a national market system.
With respect to Stop Orders not being elected when the underlying security is in a Limit State, this proposal is based on the rules of CBOE and C2 and is also consistent with the Exchange's current handling of Market Orders, which are not accepted when the underlying security is in a Limit State.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange notes that the proposal will further promote consistency between the Exchange and its affiliated exchanges, and is part of a larger technology integration that will ultimately reduce complexity for Users of the Exchange that are also participants on other CBOE Affiliated Exchanges. The Exchange does not believe that the proposed changes will have any direct impact on competition. Thus, the Exchange does not believe that the proposal creates any significant impact on competition.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties.
Because the foregoing proposed rule change does not: (A) Significantly affect the protection of investors or the public interest; (B) impose any significant burden on competition; and (C) by its terms, become operative for 30 days from the date on which it was filed or such shorter time as the Commission may designate it has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investor and the public interest. The Commission notes that the proposed rule change is based on rules of its affiliated exchanges, CBOE and C2, and thus does not raise any new or novel issues. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposed rule change as operative upon filing.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (1) Necessary or appropriate in the public interest; (2) for the protection of investors; or (3) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
Pursuant to the provisions of Section 19(b)(1) under the Securities Exchange Act of 1934 (“Act”),
In its filing with the Commission, the self-regulatory organization included
On June 17, 2016, the Commission granted IEX's application for registration as a national securities exchange under Section 6 of the Act including approval of rules applicable to the qualification, listing and delisting of companies on the Exchange. The Exchange plans to begin a listing program in the fourth quarter of 2017 and is proposing to amend Rule 11.152 to add provisions related to Market Maker withdrawals of quotations in securities listed on IEX.
IEX Rules 11.150 through 11.154 contain provisions applicable to IEX Market Makers, including registration, quotation obligations, withdrawal of quotations, voluntary termination of registration, and suspension and termination of quotations. Pursuant to Rule 11.151 a Member registered as a Market Maker is required to maintain a two-sided quotation within the designated percentage of the National Best Bid (“NBB”) and National Best Offer (“NBO”),
IEX Rule 11.152 governs the requirements for a Market Maker to obtain excused withdrawal status thereby temporarily suspending its obligation to comply with the two-sided quotation obligation of Rule 11.151. Specifically, Rule 11.152 provides the ability for a Market Maker to obtain excused withdrawal status under the following circumstances:
• Systemic equipment problems—An IEX Market Maker that wishes to obtain excused withdrawal status based on a market maker's systemic equipment problems, such as defects in an IEX Market Maker's software or hardware systems or connectivity problems associated with the circuits connecting Exchange systems with the IEX Market Maker's systems, shall contact IEX Market Operations. IEX Market Operations may grant excused withdrawal status based on systemic equipment problems for up to five (5) business days, unless extended by IEX Market Operations.
• For securities listed on exchanges other than IEX—An IEX Market Maker that wishes to withdraw quotations shall contact IEX Regulation to obtain excused withdrawal status prior to withdrawing its quotations. Excused withdrawal status based on illness, vacations or physical circumstances beyond the Market Maker's control may be granted for up to five (5) business days, unless extended by IEX Regulation. Excused withdrawal status based on investment activity or advice of legal counsel, accompanied by a representation that the condition necessitating the withdrawal of quotations is not permanent in nature, may, upon written request, be granted for not more than sixty (60) days. The withdrawal of quotations because of pending news, a sudden influx of orders or price changes, or to effect transactions with competitors shall not normally constitute acceptable reasons for granting excused withdrawal status, unless IEX has initiated a trading halt for Market Makers in the security, pursuant to IEX Rule 11.280.
• Failure to maintain a clearing arrangement—Excused withdrawal status may be granted to an IEX Market Maker that fails to maintain a clearing arrangement with a registered clearing agency or with a Member of such an agency and is withdrawn from participation in the trade reporting service of the Exchange, thereby terminating its registration as an IEX Market Maker.
Other than for systemic equipment problems, a Market Maker that wishes to withdraw quotations in a security shall contact IEX Regulation to obtain excused withdrawal status prior to withdrawing its quotations. Withdrawals of quotations shall be granted by IEX Regulation only upon satisfying one of the conditions specified in Rule 11.152, as described above.
IEX proposes to amend paragraph (c) of Rule 11.152 to add provisions for a Market Maker to obtain excused withdrawal status for securities listed on IEX. As proposed, a Market Maker in a security listed on IEX may obtain excused withdrawal status, thereby temporarily suspending its obligation to comply with the two-sided quotation obligation of Rule 11.151, under the following circumstances:
• Circumstances beyond the Market Maker's control—Excused withdrawal status based on circumstances beyond the IEX Market Maker's control,
• Legal or regulatory requirements—Excused withdrawal status based on demonstrated legal or regulatory requirements,
• Religious holidays—Excused withdrawal status based on religious holidays may be granted only if written notice is received by IEX one business day in advance and is approved by IEX.
• Vacation—Excused withdrawal status based on vacation may be granted only if: (A) The written request for withdrawal is received by IEX one business day in advance, and is approved by IEX; (B) The request includes a list of securities for which withdrawal is requested; and (C) The request is made by an IEX Market Maker that meets the definition of a “Small Firm Member” pursuant to Definition Y of the FINRA Restated Certification of Incorporation, even if the IEX Market Maker is not a FINRA member.
As proposed, the withdrawal of quotations because of pending news, a sudden influx of orders or price
The Exchange also proposes to amend paragraph (e) of Rule 11.152, which is currently reserved, to add provisions to provide that excused withdrawal status may be granted to an IEX Market Maker that is a distribution participant or an affiliated purchaser in order to comply with SEC Rule 101 or 104 under the Act. As proposed, such excused withdrawal status may be granted under the following conditions:
• Subparagraph (e)(1) of Rule 11.152 provides that a member acting as a manager (or in a similar capacity) of a distribution of a security that is a subject security or reference security under SEC Rule 101 and any member that is a distribution participant or an affiliated purchaser in such a distribution that does not have a manager shall provide written notice to IEX Regulation and the Market Regulation Department of FINRA no later than the business day prior to the first entire trading session of the one-day or five-day restricted period under SEC Rule 101, unless later notification is necessary under the specific circumstances.
○ The notice required by subparagraph (e)(1) shall be provided by submitting a completed Underwriting Activity Report that includes a request on behalf of each IEX Market Maker that is a distribution participant or an affiliated purchaser to withdraw the IEX Market Maker's quotations and includes the contemplated date and time of the commencement of the restricted period.
○ The managing underwriter shall advise each IEX Market Maker that it has been identified as a distribution participant or an affiliated purchaser to IEX Regulation and that its quotations will be automatically withdrawn, unless a market maker that is a distribution participant (or an affiliated purchaser of a distribution participant) notifies IEX Regulation as required by subparagraph (e)(2) of Rule 11.152 of its intention not to participate in the prospective distribution in order to avoid having its quotations withdrawn. Further, subparagraph (e)(3) provides that if an IEX Market Maker that is a distribution participant withdraws its quotations in an IEX-listed security in order to comply with any provision of SEC Rules 101 or 104 and promptly notifies IEX Regulation of its action, the withdrawal shall be deemed an excused withdrawal. In addition, subparagraph (e)(3) provides that nothing in the subparagraph shall prohibit IEX from taking such action as is necessary under the circumstances against a Member and its associated persons for failure to contact IEX Regulation to obtain an excused withdrawal as required by subparagraphs (a) and (e) of Rule 11.152.
○ Subparagraph (e)(5) of Rule 11.152 provides that a member acting as a manager (or in a similar capacity of a distribution subject to subparagraph (e)(1)) of Rule 11.152 shall submit a request on the Underwriting Activity Report to IEX Regulation and the Market Regulation Department of FINRA to rescind the excused withdrawal status of distribution participants and affiliated purchasers, which request shall include the date and time of the pricing of the offering, the offering price, and the time the offering terminated, and, if not in writing, shall be confirmed in writing no later than the close of business the day the offering terminates.
As noted above, the Exchange proposes to delete the final clause of the final sentence in Rule 11.152(c) (described above), which states that the withdrawal of quotations because of pending news, a sudden influx of orders or price changes, or to effect transactions with competitors shall not normally constitute acceptable reasons for granting excused withdrawal status, but provides an exception for a trading halt initiated for Market Makers pursuant to IEX Rule 11.280. IEX Rule 11.280 (Limit Up-Limit Down Plan and Trading Halts), does not include a provision granting the Exchange authority to halt trading for Market Makers, and thus the cross-reference has no practical effect.
Finally, IEX proposes to correct a typographical [sic] in a cross-reference in paragraph (d) of Rule 11.152. As described above, paragraph (d) provides that excused withdrawal status may be granted to an IEX Market Maker that fails to maintain a clearing arrangement with a registered clearing agency or with a Member of such an agency and is withdrawn from participation in the trade reporting service of the Exchange, thereby terminating its registration as an IEX Market Maker. Paragraph (d) also provides that if IEX finds that the Market Maker's failure to maintain a clearance arrangement is voluntary, the withdrawal of quotations will be considered voluntary and unexcused pursuant to Rule 2.190. However, the reference to Rule 2.190 is incorrect and should instead reference Rule 11.153 which provides that a Market Maker may voluntarily terminate its registration in a security by withdrawing its two-sided quotation from the Exchange, and also describes the timeframes for registration after such a termination, including in the case of failure to maintain a clearance arrangement. Rule 2.190 governs voluntary termination of rights as a Member, which is not relevant to the provisions of paragraph (d), which relate to treating a voluntary failure to maintain a clearance arrangement as a voluntary termination of Market Maker registration. Accordingly, the Exchange proposes to correct this typographical error.
As proposed, the amendments to IEX Rule 11.152 would substantially conform the Rule to Nasdaq Stock Market LLC (“Nasdaq”) Rule 4619, with minor nonsubstantive differences in terminology. Further, the proposed changes to IEX Rule 11.152(e) do not include provisions for passive market making pursuant to Rule 103 of Regulation M, which only applies to Nasdaq registered market makers.
IEX believes that the proposed rule change is consistent with the provisions of Section 6 of the Act
Specifically, the Exchange believes that it is consistent with the protection of investors and the public interest to allow a Market Maker to obtain excused withdrawal status based on circumstances outside the Market Maker's control for up to five business days, unless extended by IEX Regulation, to provide appropriate accommodation for unpredictable events such as jury duty, bomb threats or other physical security issues, the birth of a child, or sudden illness. While the Exchange anticipates that Market Makers will utilize automated algorithms and other systemic tools to comply with the applicable quoting requirements, such systemic tools nonetheless must be overseen by one or more individuals who may experience unpredictable events that require time off. The Exchange believes that the permitted time period of up to five business days, unless extended, is reasonable and comports with the length of time that unpredictable events generally last. The proposed amendments to Rule 11.152(c) in this regard are substantially identical to Nasdaq Rule 4619 (c) except for nonsubstantive terminology differences to refer to IEX rather than Nasdaq.
The Exchange additionally believes that it is consistent with the protection of investors and the public interest to allow a Market Maker to obtain excused withdrawal status based on demonstrated legal or regulatory requirements, for not more than 60 days, as described in the Purpose section to provide appropriate relief when a Market Maker is prohibited from trading in a particular security, such as if a Market Maker is in possession of material nonpublic information regarding a security in which it is registered. The Exchange believes that 60 days is a reasonable amount of time for the legal or regulatory requirement to be resolved, and that if it persists beyond that time period it would be appropriate for the Market Maker to terminate its registration in the security in question. The proposed amendments to Rule 11.152(c) in this regard are substantially identical to Nasdaq Rule 4619(c) except for nonsubstantive terminology differences to refer to IEX rather than Nasdaq.
The Exchange also believes that it is consistent with the protection of investors and the public interest to allow a Market Maker to obtain excused withdrawal status based on religious holidays to provide for such observances by the individual(s) overseeing Market Maker systemic tools in the case of religious holidays when IEX is open. The proposed amendments to Rule 11.152(c) in this regard are substantially identical to Nasdaq Rule 4619(c) except for nonsubstantive terminology differences to refer to IEX rather than Nasdaq.
The Exchange further believes that it is consistent with the protection of investors and the public interest to allow a Market Maker to obtain excused withdrawal status based on vacation, but to limit such excused withdrawals to the circumstances described in the Purpose section, including that the Market Maker meets the definition of a FINRA Small Firm Member, even if the IEX Market Maker is not a FINRA member. The Exchange believes that Market Makers should generally be able to manage staff vacations so that it can oversee its market making activity, but recognizes that smaller firms may not have adequate staff in this regard. The Exchange notes that Nasdaq Rule 4619 provides similar relief for vacations, but limits such relief to a market maker with three or fewer Nasdaq level 3 terminals, which it believes is designed to similarly identify smaller firms. Since IEX Market Makers will not use Nasdaq terminals to connect to IEX, the Exchange believes that reference to the FINRA definition of a Small Member Firm is an appropriate alternative measure to account for smaller firms that serve as IEX Market Makers. Other than this difference, the proposed amendments to Rule 11.152(c) in this regard are substantially identical to Nasdaq Rule 4619(c) except for nonsubstantive terminology differences to refer to IEX rather than Nasdaq.
Further, the Exchange believes that it is consistent with the protection of investors and the public interest to allow a Market Maker to obtain excused withdrawal status in order to comply with SEC Rule 101 or 104 under the Act on the conditions described in the Purpose section. The Exchange notes that Rules 101 and 104 are part of Regulation M, which governs the activities of underwriters, issuers, selling security holders, and others in connection with offerings of securities, and is intended to preclude manipulative conduct by persons with an interest in the outcome of an offering.
In addition, the Exchange believes that it is consistent with the Act to delete the final clause of Rule 11.152(c), as well as the related qualifying language in the preceding clause, because the proposed deletion is designed to avoid any potential confusion amongst market makers regarding the reasons the Exchange would find acceptable for granting excused withdrawal status, and make the Exchanges rules more clear, concise, and accurate.
Finally, the Exchange believes that it is consistent with the Act to correct the cross-reference typographical error in paragraph (d) of Rule 11.152 to promote clarity and consistency among market participants thereby facilitating investor protection and the public interest. The
IEX does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is designed to provide appropriate, objective and transparent criteria for Market Maker excused withdrawals in securities listed on IEX. The Exchange does not believe that the proposed rule change will result in any burden on intramarket competition because all Market Makers will be subject to the same criteria. The Exchange also does not believe that the proposed rule change will result in any burden on intermarket competition, since Nasdaq has substantially similar criteria for excused withdrawals and other exchanges are free to adopt comparable criteria. The Exchange also believes that the proposed rule change will serve to promote clarity and consistency, as noted in the Statutory Basis section, thereby reducing burdens on competition and facilitating investor protection.
Written comments were neither solicited nor received.
Because the proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Social Security Administration (SSA).
Notice of a renewal of an existing computer matching program that will expire on May 24, 2017.
In accordance with the provisions of the Privacy Act, as
The deadline to submit comments on the proposed matching program is 30 days from the date of publication of this notice. The matching program will be effective on May 25, 2017, or once a minimum of 30 days after publication of this notice has elapsed, whichever is later. The matching program will expire on November 24, 2018.
Interested parties may comment on this notice by either telefaxing to (410) 966-0869 or writing to the Acting Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, Social Security Administration, 617 Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235-6401. All comments received will be available for public inspection at this address.
The Acting Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, as shown above.
The Computer Matching and Privacy Protection Act of 1988 (Pub. L. 100-503), amended the Privacy Act (5 U.S.C. 552a) by describing the conditions under which computer matching involving the Federal government could be performed and adding certain protections for persons applying for, and receiving, Federal benefits. Section 7201 of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508) further amended the Privacy Act regarding protections for such persons.
The Privacy Act, as amended, regulates the use of computer matching by Federal agencies when records in a system of records are matched with other Federal, State, or local government records. It requires Federal agencies involved in computer matching programs to:
(1) Negotiate written agreements with the other agency or agencies participating in the matching programs;
(2) Obtain approval of the matching agreement by the Data Integrity Boards of the participating Federal agencies;
(3) Publish notice of the computer matching program in the
(4) Furnish detailed reports about matching programs to Congress and OMB;
(5) Notify applicants and beneficiaries that their records are subject to matching; and
(6) Verify match findings before reducing, suspending, terminating, or denying a person's benefits or payments.
We have taken action to ensure that all of our computer matching programs comply with the requirements of the Privacy Act, as amended.
SSA and DOL
The purpose of this matching program is to establish the terms, conditions, and safeguards under which the Department of Labor (DOL) will disclose the DOL administered Part C Black Lung (BL) benefit data to us. We will match DOL's Part C BL data with our records of persons receiving Social Security disability benefits to verify that Part C BL beneficiaries are receiving the correct amount of Social Security disability benefits.
The legal authority for this agreement is executed in accordance with the Privacy Act of 1974, 5 U.S.C. 552a, as amended by the Computer Matching and Privacy Protection Act of 1988, as amended, and the regulations promulgated thereunder.
The legal authority for this agreement is section 224(h)(1) of the Social Security Act (Act), 42 U.S.C. 424a(h)(1). This legal authority requires any Federal agency to provide us with information in its possession that we may require for making a timely determination of the amount of reduction required under section 224 of the Act for workers' compensation offset.
SSA will match the DOL extract file against the MBR, SSA/ORSIS (60-0090), last fully published at 71 FR 1826 on January 11, 2006, as amended at 72 FR 69723 (December 10, 2007) and 78 FR 40542 (July 5, 2013). DOL's extract file is from DOL's OWCP, BL Benefit Payments file, DOL/OWCP-9, last fully published at 81 FR 25765 on April 29, 2016. Both agencies have published the appropriate routine uses to permit the disclosures necessary to conduct this match.
DOL's monthly extract file will contain the necessary identifying and payment information for approximately 23,000 beneficiaries, all miners under age 65 entitled to receive Part C BL payments. We will match these DOL records against the MBR.
DOL's monthly extract file will contain each Part C BL beneficiary's Social Security number (SSN), name, date of birth, date of entitlement, payment status, current benefit amount, and effective date of the current benefit amount. We will determine which of the beneficiaries are receiving Social Security disability benefits and match the DOL data against the SSN, type of action code, and offset type for those beneficiaries in our MBR.
The effective date of this matching program is May 25, 2017, or once a minimum of 30 days after publication of this notice has elapsed, whichever is later. The matching program will expire on November 24, 2018.
Social Security Administration (SSA).
Notice of a new matching program.
In accordance with the provisions of the Privacy Act, as amended, this notice announces a new computer matching program that we are currently conducting with DOL.
The deadline to submit comments on the proposed matching program is 30 days from the date of publication of this notice. The matching program will be effective on May 25, 2017, or once a minimum of 30 days after publication of this notice has elapsed, whichever is later. The matching program will expire on November 24, 2018.
Interested parties may comment on this notice by either telefaxing to (410) 966-0869, writing to Mary Ann Zimmerman, Acting Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, Social Security
Interested parties may submit general questions about the matching program to Mary Ann Zimmerman, Acting Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, by any of the means shown above.
The Computer Matching and Privacy Protection Act of 1988 (Public Law (Pub. L.) 100-503), amended the Privacy Act (5 U.S.C. 552a) by describing the conditions under which computer matching involving the Federal government could be performed and adding certain protections for persons applying for, and receiving, Federal benefits. Section 7201 of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508) further amended the Privacy Act regarding protections for such persons.
The Privacy Act, as amended, regulates the use of computer matching by Federal agencies when records in a system of records are matched with other Federal, State, or local government records. It requires Federal agencies involved in computer matching programs to:
(1) Negotiate written agreements with the other agency or agencies participating in the matching programs;
(2) Obtain approval of the matching agreement by the Data Integrity Boards of the participating Federal agencies;
(3) Publish notice of the computer matching program in the
(4) Furnish detailed reports about matching programs to Congress and OMB;
(5) Notify applicants and beneficiaries that their records are subject to matching; and
(6) Verify match findings before reducing, suspending, terminating, or denying a person's benefits or payments.
We have taken action to ensure that all of our computer matching programs comply with the requirements of the Privacy Act, as amended.
The legal authority for this agreement is section 1631(f) of the Social Security Act, 42 U.S.C. 1383(f). This legal authority requires any Federal agency to provide SSA with information in its possession that SSA may require for making a determination of eligibility for or the proper amount of Supplemental Security Income (SSI) payments.
DOL's monthly extract file will contain each Part B BL beneficiary's Social Security number (SSN), name, date of birth, date of entitlement, payment status, current benefit amount, and effective date of the current benefit amount. We will determine which of the recipients are receiving SSI payments and match the DOL data against the SSN, type of action code, and income type for those recipients in our Supplemental Security Record (SSR).
Social Security Administration (SSA)
Notice of a New Matching Program.
In accordance with the provisions of the Privacy Act, as amended, this notice announces a new computer matching program that we are currently conducting with the Department of Homeland Security (DHS).
The deadline to submit comments on the proposed matching program is 30 days from the date of publication of this notice. The matching program will be effective on July 19, 2017, or once a minimum of 30 days after the publication of this notice has elapsed, whichever is later. The matching program will expire on January 18, 2019.
Interested parties may comment on this notice by either telefaxing to (410) 966-0869, writing to Mary Ann Zimmerman, Acting Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, Social Security Administration, 617 Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, or emailing to
Interested parties may submit general questions about the matching program to Mary Ann Zimmerman, Acting Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, by any of the means shown above.
The Computer Matching and Privacy Protection Act of 1988 (Public Law (Pub. L.) 100-503), amended the Privacy Act (5 U.S.C. 552a) by describing the conditions under which computer matching involving the Federal government could be performed and adding certain protections for persons applying for, and receiving, Federal benefits. Section 7201 of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508) further amended the Privacy Act regarding protections for such persons.
The Privacy Act, as amended, regulates the use of computer matching by Federal agencies when records in a system of records are matched with
(1) Negotiate written agreements with the other agency or agencies participating in the matching programs;
(2) Obtain approval of the matching agreement by the Data Integrity Boards of the participating Federal agencies;
(3) Publish notice of the computer matching program in the
(4) Furnish detailed reports about matching programs to Congress and OMB;
(5) Notify applicants and beneficiaries that their records are subject to matching; and
(6) Verify match findings before reducing, suspending, terminating, or denying a person's benefits or payments.
We have taken action to ensure that all of our computer matching programs comply with the requirements of the Privacy Act, as amended.
Legal authorities for the disclosures under this agreement are 42 U.S.C. 402(n), 1382(f), 1382c(a)(1), and 1383(e)(1)(B) and (f); and 8 U.S.C. 1611 and 1612.
Section 1631(e)(1)(B) of the Social Security Act (hereafter the “Act”) (42 U.S.C. 1383(e)(1)(B)) requires SSA to verify declarations of applicants for and recipients of Supplemental Security Income (SSI) payments before making a determination of eligibility or payment amount. Section 1631(f) of the Act (42 U.S.C. 1383(f)) requires Federal agencies to provide SSA with information necessary to verify SSI eligibility or benefit amounts or to verify other information related to these determinations. Section 202(n)(2) of the Act (42 U.S.C. 402(n)(2)) requires the Secretary of Homeland Security to notify the Commissioner of Social Security when certain individuals are removed from the United States under sections 212(a)(6)(A) and 237(a) of the Immigration and Nationality Act (INA) (8 U.S.C. 1182(a)(6)(A) or 1227(a)).
Resident aliens eligible for SSI may receive payments for any month in which they reside in the United States. Under section 1611(f) of the Act, an individual is ineligible for SSI benefits for any month during all of which he or she is outside the United States. The Act provides for limited exceptions to the general rule. See,
The Social Security Protection Act of 2004, Pub. L. 108-203, amended the Act to expand the number of individuals who are subject to nonpayment of Social Security benefits. Thus, section 202(n)(1)(A) of the Act (42 U.S.C. 402(n)(1)(A)) prohibits payment of retirement or disability insurance benefits to number holders (NH) who have been removed from the United States on certain grounds specified under section 237(a) or section 212(a)(6)(A) of the INA (8 U.S.C. 1182(a)(6)(A), 1227(a)). SSA will not pay monthly retirement or disability benefits to such NHs for the month after the month in which the Secretary of Homeland Security notifies SSA of the NH's removal or before the month in which the NH is subsequently lawfully admitted to the United States for permanent residence.
Section 202(n)(1)(B) of the Act (42 U.S.C. 402(n)(1)(B)) prohibits payment of auxiliary or survivors benefits to certain individuals who are entitled to such benefits on the record of a NH who has been removed from the United States on certain grounds as specified in the above paragraph. Nonpayment of benefits is applicable for any month such auxiliary or survivor beneficiary is not a citizen of the United States and is outside the United States for any part of the month. Benefits cannot be initiated (or resumed) to such auxiliary or survivor beneficiaries who are otherwise subject to nonpayment under these provisions until the removed NH has been subsequently lawfully admitted for permanent residence to the United States.
In addition, certain individuals may be subject to suspension of their SSI payments under section 1614(a)(1)(B)(i) of the Act (42 U.S.C. 1382c(a)(1)(B)(i)), which provides, in part, that an SSI recipient must be a resident of the United States. Further, if an SSI recipient is not a United States citizen, 8 U.S.C. 1611 and 1612 provide that an alien who is not a qualified alien within the statutory definitions applicable to those sections is ineligible for SSI benefits, and an alien who is a qualified alien will have limited eligibility.
Aliens who leave the United States voluntarily and are subject to suspension or non-payment of SSI.
Aliens who are removed from the United States and subject to suspension or non-payment of retirement, survivors, and disability insurance benefits and SSI payments. In certain situations, payment of auxiliary or survivors benefits to certain individuals who are entitled to such benefits on the record of a number holder who has been removed from the United States on certain grounds is prohibited.
The data elements furnished by the DHS BIS System are the alien's name, SSN, date of birth (DOB), Alien Registration Number (“A” number), date of departure, and expected length of stay. To verify the SSN, SSA will match BIS data against the name, DOB, and SSN in SSA's Enumeration System. SSA will store and match verified SSNs against the same elements in the SSR files.
The data elements furnished from EID are the individual's name and alias (if any), SSN (if available), DOB, country of birth, country to which removed, date of
To verify the SSN, SSA will match EID data against records in its Enumeration System. SSA matches the verified SSNs against the existing MBR and SSR records to locate removals (and their dependents or survivors, if any) who have already claimed and are currently receiving RSDI or SSI benefits, or both. SSA will retain the data verified through this matching program on the MBR and SSR, to be associated with future claims activity
DHS will disclose to SSA information from the BIS system of records, DHS/USCIS-007, 73 FR 56596 (September 29, 2008). DHS will electronically format the BIS data for transmission to SSA. BIS data is comprised of data collected from USCIS immigration systems. USCIS data used to accomplish this matching agreement currently comes from the CLAIMS 3 database.
SSA will match the DHS information with SSA's systems of records: Master Files of Social Security Number (SSN) Holders and SSN Applications (the Enumeration System), 60-0058, 75 FR 82121 (December 29, 2010), and the Supplemental Security Income Record and Special Veterans Benefits (SSR), 60-0103, 71 FR 1830 (January 11, 2006).
DHS will retrieve information on removed aliens from the DHS database known as the EID and electronically format it for transmission to SSA. These individuals are not U.S. citizens or Legally Permanent Residents and thus not covered by the Privacy Act or DHS system of records.
The SSA systems of records used in the match are the Master Files of Social Security Number (SSN) Holders and SSN Applications (the Enumeration System), SSA/OEEAS, 60-0058, 75 FR 82121 (December 29, 2010), the Supplemental Security Income Record and Special Veterans Benefits (SSR), 60-0103, 71 FR 1830 (January 11, 2006), the Master Beneficiary Record (MBR), 60-0090, 71 FR 1826 (January 11, 2006) and the Prisoner Update Processing System (PUPS), 60-0269, 64 FR 11076 (March 8, 1999). The Unverified Prisoner System (UPS) is a subsystem of PUPS. UPS users perform a manual search of fallout cases where the Enumeration and Verification System is unable to locate an SSN for an alien who has been removed.
Under an existing Interagency Agreement (IAA) between SSA and DHS, SSA has automated access to the DHS Systematic Alien Verification for Entitlements (SAVE) program, DHS-USCIS-004, 81 FR 78619 (November 8, 2016) that utilizes the Verification Information System. This system provides information on the current immigration status of aliens who have Alien Registration Numbers (“A” numbers). SSA will use the automated access to the SAVE program to verify current immigration status of aliens where the immediate EID match or any future claims activity indicate an alien has been removed. The parties do not consider this verification as a separate match subject to the provisions of the CMPPA; the parties will conduct such verifications in compliance with the terms of the aforementioned IAA.
The systems of records involved in this computer matching program have routine uses permitting the disclosures needed to conduct this match.
Susquehanna River Basin Commission.
Notice.
This notice lists the projects approved by rule by the Susquehanna River Basin Commission during the period set forth in
August 1-31, 2017.
Susquehanna River Basin Commission, 4423 North Front Street, Harrisburg, PA 17110-1788.
Jason E. Oyler, General Counsel, 717-238-0423, ext. 1312,
This notice lists the projects, described below, receiving approval for the consumptive use of water pursuant to the Commission's approval by rule process set forth in 18 CFR 806.22(f) for the time period specified above:
Pub. L. 91-575, 84 Stat. 1509 et seq., 18 CFR parts 806, 807, and 808.
Susquehanna River Basin Commission.
Notice.
This notice lists the approved by rule projects rescinded by the Susquehanna River Basin Commission during the period set forth in
August 1-31, 2017.
Susquehanna River Basin Commission, 4423 North Front Street, Harrisburg, PA 17110-1788.
Jason E. Oyler, General Counsel, telephone: (717) 238-0423, ext. 1312; fax: (717) 238-2436; email:
This notice lists the projects, described below, being rescinded for the consumptive use of water pursuant to the Commission's approval by rule process set forth in 18 CFR 806.22(e) and 806.22(f) for the time period specified above:
1. XTO Energy, Inc., Pad ID: Hazlak 8504, ABR-20100211.R1, Shrewsbury Township, Lycoming County, Pa.; Rescind Date: August 29, 2017.
2. Atlas Resources, LLC, Pad ID: Logue Pad B, ABR-201209003, Gamble Township, Lycoming County, Pa.; Rescind Date: August 31, 2017.
Pub. L. 91-575, 84 Stat. 1509
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition; denial of application for exemption.
FMCSA announces its decision to deny the application of the Pipe Line Contractors Association (PLCA) from the requirement that a motor carrier install and require each of its drivers to use an electronic logging device (ELD) to record the driver's hours-of-service (HOS) no later than December 18, 2017. PLCA had requested the exemption for all pipeline contractor vehicle drivers who typically use the short-haul exception to the logging requirement, which also exempts them from using ELDs. Sometimes, however, they may exceed the conditions of the short-haul exception more than 8 days in a 30-day period, which would subject them to the ELD rule. FMCSA has analyzed the exemption application and public comments, and has determined that the applicant would not achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. FMCSA therefore denies PLCA's application for exemption.
FMCSA denied the application for exemption by letter dated October 16, 2017, after notice and opportunity for public comment.
For information concerning this notice, contact Mr. Thomas Yager, Chief, FMCSA Driver and Carrier Operations Division; Office of Carrier, Driver and Vehicle Safety Standards; Telephone: 614-942-6477. Email:
FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from certain Federal Motor Carrier Safety Regulations (FMCSRs). FMCSA must publish a notice of each exemption request in the
FMCSA reviews safety analyses and public comments submitted, and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the
The PLCA is an industry trade association that negotiates labor agreements, encourages safe practices in pipeline construction, and seeks the resolution of problems common to those in the pipeline construction industry. PLCA has been in existence since 1948 and currently has 77 members who collectively employ approximately 30,000 to 40,000 workers depending upon the level of pipeline work in any year. The drivers who would be covered under the exemption operate flatbed trucks that haul heavy equipment, dump trucks, skid trucks, water trucks, pilot cars and buses that transport workers from the assembly point to the pipeline right-of-way. These drivers possess CDLs and almost always operate within 100 miles of their assembly point, and meet the other requirements of the short haul exception in 49 CFR 395.1(e)(1). However, the drivers may not return within the 12 hours required for use of the short-haul exception.
According to PLCA, exempting pipeline contractors from the ELD requirement would have no impact on safety for several reasons. First, drivers would continue to maintain written RODS on any day that they exceed the requirements of the short-haul exemption. Second, pipeline contractor drivers typically spend very little time operating on public roads. Third, pipeline contractors are required to maintain time records for their drivers. Finally, pipeline contractors and drivers otherwise must comply with all the HOS regulations. PLCA stated that granting this exemption would result in a level of safety that is equal to or greater than the level of safety achieved by complying with the ELD rule. A copy of the PLCA application for exemption is available in the docket for this notice.
On July 10, 2017, FMCSA published notice of PLCA's application for exemption and requested public comment (82 FR 31796). The Agency received 156 comments to the docket. The predominance of the commenters—over 96%—supported the granting of the PLCA request; most of these were “form letter” comments. Primary groups filing in support included the Power and Communication Contractors Associations (PCCA), American Pipeline Contractors Association, U.S. Pipeline, Inc., and the American Road and Transport Builders Association (ARTBA). The two primary groups filing in opposition were the Advocates for Highway and Auto Safety (Advocates) and the Owner-Operator Independent Driver's Association (OOIDA).
The Advocates expressed concern that the success of the ELD mandate lies in its applicability to all CMVs operated by drivers subject to the HOS and RODS. Despite this, the FMCSA has made great efforts to accommodate various aspects of the industry while maintaining safety. In the present case, despite having an existing exemption in the regulation, PLCA claims that to even comply with the exemption is onerous. The Agency has established a limit on the extent of the exemption which must be enforced, lest the final rule is rendered meaningless.
Advocates further added that PLCA had provided no proof that the requested exemption would ensure safety or address the Agency's concerns regarding noncompliance with the HOS regulations when using paper RODS.
All comments are available for review in the docket for this notice.
When FMCSA published the rule mandating ELDs it relied upon research indicating that the rule improves CMV safety by improving compliance with the HOS rules. The rule also reduces the overall paperwork burden for both motor carriers and drivers. The primary reason for denying this exemption is that PLCA did not demonstrate how, without using ELDs, they would maintain a level of safety equivalent to, or greater than, the level achieved without the exemption.
For these reasons, FMCSA denies the applicant's request for exemption.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FMCSA announces its plan to submit the Information Collection Request (ICR) described below to the Office of Management and Budget (OMB) for review and approval. The purpose of this notice is to allow for 30 days of public comment.
FMCSA proposes a pilot program to allow temporary regulatory relief from the Agency's sleeper berth regulation for a limited number of commercial drivers who have a valid commercial driver's license (CDL), and who regularly use a sleeper berth to accumulate their required 10 hours of non-duty work status. During the pilot program, participating drivers would have the option to split their sleeper berth time within parameters specified by FMCSA. Driver metrics would be collected for the duration of the study, and participants' safety performance and fatigue levels would be analyzed. This pilot program seeks to produce statistically reliable evidence on the question as to whether split sleeper berth time affects driver safety performance and fatigue levels.
Please send your comments by November 27, 2017. OMB must receive your comments by this date in order to act quickly on the ICR.
All comments should reference Federal Docket Management System (FDMS) Docket Number FMCSA-2016-0394. Interested persons are invited to submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the attention of the Desk Officer, Department of
Nicole Michel, Research Division, Federal Motor Carrier Safety Administration, 1200 New Jersey Avenue SE., Washington, DC 20590-0001, by email at
As described in 49 CFR 395.1(g)(1), a driver who operates a property-carrying CMV equipped with a sleeper berth
During listening sessions for the hours-of-service (HOS) rulemaking, the Agency heard from many drivers that they would like some regulatory flexibility to be able to sleep when they get tired or as a countermeasure to traffic congestion (
The Flexible Sleeper Berth Pilot Program requires that participating drivers be provided relief from Part 395 concerning consolidated sleeper berth time requirements. Participating drivers will be asked if they have completed the Driver Education Module of the North American Fatigue Management Program (NAFMP) prior to study enrollment. If drivers have not completed the program, they will be given information on the program and encouraged, but not required, to complete these modules prior to participation in the study. During the pilot program, participating drivers will have the option to split their sleeper berth time, within parameters specified by FMCSA (
Details of the data collection plan for this pilot program are subject to change based on comments to the docket and further review by analysts. Participating drivers will drive an instrumented vehicle for up to 3 consecutive months. At a minimum, FMCSA will gather the following data during the study:
• Electronic logging device (ELD) data, to evaluate duty hours and timing, driving hours and timing, rest breaks, off-duty time, and restart breaks.
• Onboard monitoring system (OBMS) data, to evaluate driving behaviors, safety-critical events (or SCEs, which include crashes, near-crashes, and other safety-related events), reaction time, fatigue, lane deviations, and traffic density, road curvature, and speed variability.
• Roadside violation data (from carriers and drivers), including vehicle, duty status, hazardous materials, and cargo-related violations (contingent upon inspections).
• Wrist actigraphy data,
• Psychomotor Vigilance Test (PVT)
• Subjective sleepiness ratings, using the Karolinska Sleepiness Scale (KSS),
• Sleep logs, in which drivers will document when they are going to sleep, when they wake up, and whether they are using the sleeper berth. For split-sleep days, drivers will record how and why they chose to split their sleep.
Other information that may be needed, such as vehicle miles traveled (VMT), will also be collected through the participating carrier. Every effort will be made to reduce the burden on the carrier in collecting and reporting this data.
The Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 3501-3520) prohibits agencies from conducting information collection (IC) activities until they analyze the need for the collection of information and how the collected data will be managed. Agencies must also analyze whether technology could be used to reduce the burden imposed on those providing the data. The Agency must estimate the time burden required to respond to the IC requirements, such as the time required to complete a particular form. The Agency submits its IC analysis and burden estimate to OMB as a formal ICR; the Agency cannot conduct the information collection until OMB approves the ICR.
On June 27, 2017, FMCSA published a notice in the
One comment questioned the need for a pilot program given that the proposal is similar to the HOS rules prior to 2003. This commenter expressed an opinion that the HOS rules should just be reverted to the prior to 2003 HOS rules. While FMCSA understands the commenter's frustration with the process, our commitment to public safety requires us to conduct a pilot program to collect scientific data and achieve statistically significant findings before considering any revision to our current regulations.
Another commenter expressed a similar opinion regarding the HOS rules, which he felt should never have been changed in 2003. He felt that the HOS needed to be changed and re-evaluated for every different division of CMVs, but did express support of flexibility in sleeper berth times. FMCSA appreciates this commenter taking the time to provide feedback on the HOS rules, but felt that this comment went beyond the scope of this pilot program; however, the Agency appreciates his support of allowing a flexible sleeper berth pilot program to move forward.
The remaining three commenters were supportive of the proposed Pilot Program and proposed information collection, and expressed an opinion that this would make the roads safer and allow drivers to manage their duty hours more efficiently and use common sense to not drive when tired. FMCSA appreciates this support for the program, and has not made any changes or revisions to the design of the study based on these comments.
Additionally, a
Approximately 40 commenters responded in a negative manner to the 14-hour rule, or having too many regulations in place, but were not specific to the Flexible Sleeper Berth Program. The majority of commenters who responded agreed that the NAFMP should be recommended, not mandatory. One commenter felt the NAFMP should be mandatory; however, FMCSA felt that the majority of commenters agreeing with the current study design showed that we should move forward without changing the design. One commenter felt that the cameras in the vehicle were too burdensome, however, several others expressed that the data collection was reasonable for the scope of the study.
Federal Motor Carrier Safety Administration (FMCSA), DOT
Notice of final disposition.
FMCSA announces its decision to exempt 89 individuals from the prohibition in the Federal Motor Carrier Safety Regulations (FMCSRs) against persons with insulin-treated diabetes mellitus (ITDM) from operating a commercial motor vehicle (CMV) in interstate commerce. The exemptions enable these individuals with ITDM to operate CMVs in interstate commerce.
The exemptions were applicable on September 12, 2017. The exemptions expire on September 12, 2019.
Ms. Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
You may see all the comments online through the Federal Document Management System (FDMS) at:
On August 10, 2017, FMCSA published a notice announcing receipt of applications from 89 individuals requesting an exemption from diabetes requirement in 49 CFR 391.41(b)(3) and requested comments from the public (82 FR 37486). The public comment period ended on September 11, 2017, and three comments were received.
FMCSA has evaluated the eligibility of these applicants and determined that granting the exemptions to these individuals would achieve a level of safety equivalent to or greater than the level that would be achieved by complying with the current regulation 49 CFR 391.41(b)(3).
The physical qualification standard for drivers regarding diabetes found in 49 CFR 391.41(b)(3) states that a person is physically qualified to drive a CMV if that person:
Has no established medical history or clinical diagnosis of diabetes mellitus currently requiring insulin for control.
FMCSA received three comments in this proceeding. An anonymous commenter stated that they are in favor of granting “Greg” an exemption because he properly manages his diabetes. There are four Gregory's listed in this
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption from the diabetes standard in 49 CFR 391.41(b)(3) if the exemption is likely to achieve an equivalent or greater level of safety than would be achieved without the exemption. The exemption allows the applicants to operate CMVs in interstate commerce.
The Agency's decision regarding these exemption applications is based on the program eligibility criteria and an individualized assessment of information submitted by each applicant. The qualifications, experience, and medical condition of each applicant were stated and discussed in detail in the August 10, 2017
These 89 applicants have had ITDM over a range of one to 34 years. These applicants report no severe hypoglycemic reactions resulting in loss of consciousness or seizure, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning symptoms, in the past 12 months and no recurrent (two or more) severe hypoglycemic episodes in the past five years. In each case, an endocrinologist verified that the driver has demonstrated a willingness to properly monitor and manage his/her diabetes mellitus, received education related to diabetes management, and is on a stable insulin regimen. These drivers report no other disqualifying conditions, including diabetes related complications. Each meets the vision requirement at 49 CFR 391.41(b)(10).
Consequently, FMCSA finds that in each case exempting these applicants from the diabetes requirement in 49 CFR 391.41(b)(3) is likely to achieve a level of safety equal to that existing without the exemption.
The terms and conditions of the exemption are provided to the applicants in the exemption document and includes the following: (1) Each driver must submit a quarterly monitoring checklist completed by the treating endocrinologist as well as an annual checklist with a comprehensive medical evaluation; (2) each driver must report within two business days of occurrence, all episodes of severe hypoglycemia, significant complications, or inability to manage diabetes; also, any involvement in an accident or any other adverse event in a CMV or personal vehicle, whether or not it is related to an episode of hypoglycemia; (3) each driver must provide a copy of the ophthalmologist's or optometrist's report to the Medical Examiner at the time of the annual medical examination; and (4) each driver must provide a copy of the annual medical certification to the employer for retention in the driver's qualification file, or keeping a copy in his/her driver's qualification file if he/she is self-employed. The driver must also have a copy of the exemption when driving, for presentation to a duly authorized Federal, State, or local enforcement official.
During the period the exemption is in effect, no State shall enforce any law or regulation that conflicts with this exemption with respect to a person operating under the exemption.
Based upon its evaluation of the 89 exemption applications, FMCSA exempts the following drivers from the diabetes requirement in 49 CFR 391.41(b)(10), subject to the requirements cited above:
In accordance with 49 U.S.C. 31136(e) and 31315, each exemption will be valid for two years from the effective date unless revoked earlier by FMCSA. The exemption will be revoked if the following occurs: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained prior to being granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition.
FMCSA announces its decision to exempt 41 individuals from the prohibition in the Federal Motor Carrier Safety Regulations (FMCSRs) against persons with insulin-treated diabetes mellitus (ITDM) from operating a commercial motor vehicle (CMV) in interstate commerce. The exemptions enable these individuals with ITDM to operate CMVs in interstate commerce.
The exemptions were applicable on April 8, 2017. The exemptions expire on April 8, 2019.
Ms. Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
You may see all the comments online through the Federal Document Management System (FDMS) at:
On March 8, 2017, FMCSA published a notice announcing receipt of applications from 41 individuals requesting an exemption from diabetes requirement in 49 CFR 391.41(b)(3) and requested comments from the public (82 FR 13050). The public comment period ended on April 7, 2017, and four comments were received.
FMCSA has evaluated the eligibility of these applicants and determined that granting the exemptions to these individuals would achieve a level of safety equivalent to or greater than the level that would be achieved by complying with the current regulation 49 CFR 391.41(b)(3).
The physical qualification standard for drivers regarding diabetes found in 49 CFR 391.41(b)(3) states that a person is physically qualified to drive a CMV if that person:
Has no established medical history or clinical diagnosis of diabetes mellitus currently requiring insulin for control.
FMCSA received four comments in this proceeding. Janet Sandoval and two anonymous commenters stated that they are against granting Mr. Ta Canunpa W. Banks the exemption. Ms. Sandoval stated that she does not believe Mr. Banks is under sufficient medical care for diabetes and that all drivers should be required to regularly see an endocrinologist to ensure their diabetes is under control. Quarterly and annual monitoring by an endocrinologist and eye doctor is a stipulation of the exemption. Drivers are required to submit these reports to the Agency on a continuing basis while they hold an exemption. The first anonymous commenter stated that Mr. Banks provided falsified information in order to obtain a medical card. The second anonymous commenter did not provide a reason for their objection to granting Mr. Banks an exemption. A third anonymous commenter stated that they were in favor of granting the exemptions to all drivers listed in this notice, and that the previous three comments appear to be a “smear campaign” directed towards Mr. Banks as they have no documentation to support their claims. FMCSA investigated the claim that Mr. Banks provided falsified information in order to obtain a medical card. Mr. Banks did not disclose insulin use to his Medical Examiners on exams dated January 27, 2017 and February 14, 2017 based on his fear of losing his livelihood. However, he did disclose it in the exam submitted as part of his exemption application on November 11,
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption from the diabetes standard in 49 CFR 391.41(b)(3) if the exemption is likely to achieve an equivalent or greater level of safety than would be achieved without the exemption. The exemption allows the applicants to operate CMVs in interstate commerce.
The Agency's decision regarding these exemption applications is based on the program eligibility criteria and an individualized assessment of information submitted by each applicant.
These 41 applicants have had ITDM over a range of 1 to 27 years. These applicants report no severe hypoglycemic reactions resulting in loss of consciousness or seizure, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning symptoms, in the past 12 months and no recurrent (two or more) severe hypoglycemic episodes in the past five years. In each case, an endocrinologist verified that the driver has demonstrated a willingness to properly monitor and manage his/her diabetes mellitus, received education related to diabetes management, and is on a stable insulin regimen. These drivers report no other disqualifying conditions, including diabetes related complications. Each meets the vision requirement at 49 CFR 391.41(b)(10).
The qualifications, experience, and medical condition of each applicant were stated and discussed in detail in the March 8, 2017
Consequently, FMCSA finds that in each case exempting these applicants from the diabetes requirement in 49 CFR 391.41(b)(3) is likely to achieve a level of safety equal to that existing without the exemption.
The terms and conditions of the exemption are provided to the applicants in the exemption document and includes the following: (1) Each driver must submit a quarterly monitoring checklist completed by the treating endocrinologist as well as an annual checklist with a comprehensive medical evaluation; (2) each driver must report within two business days of occurrence, all episodes of severe hypoglycemia, significant complications, or inability to manage diabetes; also, any involvement in an accident or any other adverse event in a CMV or personal vehicle, whether or not it is related to an episode of hypoglycemia; (3) each driver must provide a copy of the ophthalmologist's or optometrist's report to the Medical Examiner at the time of the annual medical examination; and (4) each driver must provide a copy of the annual medical certification to the employer for retention in the driver's qualification file, or keeping a copy in his/her driver's qualification file if he/she is self-employed. The driver must also have a copy of the exemption when driving, for presentation to a duly authorized Federal, State, or local enforcement official.
During the period the exemption is in effect, no State shall enforce any law or regulation that conflicts with this exemption with respect to a person operating under the exemption.
Based upon its evaluation of the 41 exemption applications, FMCSA exempts the following drivers from the diabetes requirement in 49 CFR 391.41(b)(10), subject to the requirements cited above:
In accordance with 49 U.S.C. 31136(e) and 31315, each exemption will be valid for two years from the effective date unless revoked earlier by FMCSA. The exemption will be revoked if the following occurs: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained prior to being granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315.
Federal Transit Administration, DOT.
Request for Comments.
This notice provides information on proposed changes and clarifications to the National Transit Database (NTD) reporting requirements. All proposed changes and clarifications are proposed to be effective for report year 2017 (beginning in September 2017).
Comments are due by December 26, 2017. FTA will consider late comments to the extent practicable.
Please identify your submission by Docket Number (FTA-2017-0010) through one of the following methods:
•
•
•
•
Maggie Schilling, National Transit Database Program Manager, FTA Office of Budget and Policy, (202) 366-2054 or
The National Transit Database (NTD) was established by Congress to be the Nation's primary source for information and statistics on the transit systems of the United States. Recipients and beneficiaries of grants from the Federal Transit Administration (FTA) under the Urbanized Area Formula Grants Program (§ 5307) or Other than Urbanized Area (Rural) Formula Program (§ 5311) are required to submit data to the NTD. Additionally, all other recipients of grants from FTA that own, operate, or manage assets used in public transportation are required to report data related to their asset inventory, condition assessments, and state of good repair performance targets data to the NTD.
In July 2012, the Moving Ahead for Progress in the 21st Century Act (MAP-21) amended § 5335 authorizing the collection of an expanded asset inventory and condition information through the NTD. The updated asset inventory and condition reporting requirements were published in the
The final NTD asset inventory reporting guidance specifies that service vehicles and administrative or maintenance facilities are reportable if the agency has full or partial capital responsibility for the asset; however, the updated guidance did not define
In addition, FTA is seeking comment on five additional pieces of proposed guidance for inclusion in the NTD Reporting Manual. First is an update to the definition of a
All proposed changes and clarifications will be effective for report year 2017, that begins in September 2017.
(a) Beginning in report year 2018, all NTD reporters are required to report additional asset inventory information with their annual report. The guidance published with the final asset inventory reporting requirements specified that service vehicles and administrative or maintenance facilities are reportable if the agency has full or partial capital responsibility for the asset; however, the guidance did not specifically define
FTA is proposing that for purposes of the NTD Report, an agency has direct capital responsibility for an asset if any of the following are true:
1. The agency owns the asset,
2. the agency jointly owns the asset with another entity, or
3. The agency is responsible for replacing, overhauling, refurbishing or conducting major repairs on an asset, or the cost of those activities are itemized as a capital line item in their budget.
Performing minimal preventive maintenance work on an asset, like cleaning, does not in itself indicate direct capital responsibility for the asset. An infrastructure asset itemized as a capital line item in the budget does not necessarily mean an agency has direct capital responsibility; an agency must also have management or oversight responsibilities for the line item project.
(b) The guidance published with the final asset inventory reporting requirements did not clearly state when an asset that is under construction or final assembly becomes reportable to the NTD. FTA is proposing that an agency is required to report a new asset to the NTD asset inventory in the fiscal year that the agency begins using the asset for public transportation service. Agencies would not be required to report assets that are being assembled, nor those assets under construction, nor assets that are in testing.
(c) The new track inventory form, which will be implemented in report year 2018, includes two track types: Tangent and curve. Agencies are asked to report a sum of all track in these two categories. The guidance does not indicate whether non-revenue or yard track should be included in these two categories. It also does not allow agencies to separate out the total track without capital replacement responsibility. To clarify the reporting requirement and ensure that the Transit Asset Management (TAM) Program infrastructure performance restrictions metric (% of track segments under performance restriction) only includes track used in revenue service for which an agency has capital replacement responsibility, FTA is proposing the addition of two additional track categories. Under this proposal, agencies would report: (1) Total in-service tangent track, (2) total in-service curved track and (3) total non-revenue/yard track (includes all non-revenue/yard track regardless of capital replacement responsibility) and (4) total in-service track with no capital replacement responsibility. The TAM performance restriction calculation would exclude all track in the third and fourth categories. In addition to these four categories, agencies would also report total track under performance restriction. This number would be used with the total in-service track minus the total in-service track with no capital replacement responsibility to calculate the percent of track segments under performance restriction.
FTA is proposing the following update to a reportable
The proposed definition of a reportable
A safety or security event occurring:
Excluded from this event reporting requirement are:
Prior to 2012, the JARC Program was a stand-alone grant program which did not carry an NTD reporting requirement. MAP-21, however, repealed the JARC Program as a stand-alone program, and instead made JARC projects eligible activities under the Urbanized Area Formula Program and the Rural Areas Formula Program. All recipients and beneficiaries of these programs are required to report to the NTD, however, FTA does not currently provide any guidance on reporting requirements for recipients and subrecipients of the programs that only support JARC projects, and which do not provide any public transportation services.
FTA is proposing to exempt from NTD reporting any subrecipient that only receives FTA money for 5307 or 5311 funded JARC projects, and does not have any transit operating or capital expenses from any funding source.
The definition of
FTA reviews all requests to report new service to the NTD, as services excluded from the definition of public transportation are not permitted to report to the NTD on a voluntary basis. When FTA deems it necessary, it will require the agency to conduct a passenger survey test of whether 50% of passengers are making a return trip on the same day. However, FTA proposes that such a survey must meet the following requirements:
1. The agency must conduct the survey over a 12-month period, to account for seasonal variations in passenger behavior.
2. The agency must include the entire length of each route in the survey.
3. The survey must determine that at least 50% of passengers on each route make a return trip on the same day, with 95% confidence.
4. A qualified statistician must approve the survey/sampling methodology and certify that the results give the required level of confidence.
If at least 50% of all passengers surveyed on a route made a return trip on the same day, or reported their intention to do so, then FTA will permit the agency to report that route to the NTD.
Current NTD reporting guidance does not address the questions of commuter vs intercity service for ferryboats. Although all ferryboats that permit walk-on passengers are included in the definition of public transportation, the NTD Reporting Manual only allows ferryboat service outside the boundaries of an urbanized area to be deemed “attributable” to that urbanized area for commuter ferryboat services. Intercity ferryboat services are not permitted to deem their service outside the boundaries of an urbanized area as attributable to that area. Thus, FTA is proposing a uniform use of the 50% same day return trip policy to determine whether Ferryboat (FB) service is commuter or intercity for the purposes of inclusion in NTD. In addition, FTA is proposing a requirement for all new commuter rail, commuter bus or ferryboat service to survey for routes with a maximum one-way trip time exceeding 90 minutes to establish that at least 50% of all passengers on the route made a return trip on the same day. For new commuter rail, commuter bus, or ferryboat routes being proposed for reporting to the NTD, FTA may, at its discretion, presume that those with 100% one-way trip times of 90 minutes or less are commuter services, without requiring a passenger survey.
FTA currently has 18 non-rail, for-profit providers of public transportation that report directly to the NTD. One of these reporters raised the concern that providing the detailed financial information required of full reporters to the NTD may compromise their ability to successfully compete for business. They requested that FTA consider reducing the financial reporting requirements for for-profit providers to mirror those of reduced reporters to address their concern. FTA is seeking comment on the proposal to allow non-rail, for-profit providers of public transportation the option to report to the NTD as a reduced reporter. Of the 18 non-rail, for-profit providers referenced above, ten already meet the current reduced reporting threshold. This proposal would provide the flexibility to report as a reduced reporter for the remaining 8 agencies.
As a reduced reporter, these agencies would no longer be required to report passenger miles traveled (PMT). Such data previously reported by these agencies would not be available for use in the Urbanized Area Formula (UAF) apportionment. If the local urbanized area has more than 200,000 in population, this may reduce their local urbanized area's UAF apportionment. If the local urbanized area has fewer than 200,000 in population, this may impact the local urbanized area's eligibility for Small Transit Intensive Cities (STIC) funds in the UAF apportionment.
FTA would amend current reporting forms to allow ferry providers to continue to report fixed guideway directional route miles (DRM) or fixed guideway vehicle revenue miles (VRM) for continued use in the State of Good Repair Formula Apportionment.
FTA has received feedback from the transit industry that the current definitions of
To improve current reporting guidance, FTA proposes adding language specifically excluding failures caused by collision, natural disaster, or vandalism to the current definitions. FTA seeks comment on this proposed change. The amended definitions are below:
Proposed definition of
A failure of some mechanical element of the revenue vehicle that is not caused by a collision, natural disaster, or vandalism and prevents the vehicle from completing a scheduled revenue trip or from starting the next scheduled revenue trip because actual movement is limited or the vehicle is unsafe.
Proposed definition of
A failure of some other mechanical element of the revenue vehicle that is not caused by a collision, natural disaster, or vandalism, but, because of local agency policy, prevents the revenue vehicle from completing a scheduled revenue trip or from starting the next scheduled revenue trip even though the vehicle is physically able to continue in revenue service.
In addition to the proposed definition changes, FTA seeks additional feedback on the current utility of the
Input received from this notice may be used to inform a future proposal to adjust the definition or collection method of these data points.
The scenarios described below are for public comment only. At this time, FTA is not formally proposing these changes.
FTA seeks feedback on the following scenarios:
(1) Collection of the
(2) Adjust the definition of
This adjustment would provide a more standard and comprehensive look at the
In addition to the scenarios discussed above, FTA welcomes additional comment and input on how these data points may be adjusted to benefit the transit industry and transit stakeholders. FTA specifically requests that agencies provide comment on the anticipated impact on reporting burden for the scenarios above as well as the anticipated reporting burden for any additional suggestions provided to improve the utility of these data points.
Federal Transit Administration, DOT.
Notice of proposed Buy America waiver and request for comment.
The Federal Transit Administration (FTA) received a request
Comments must be received by November 13, 2017. Late-filed comments will be considered to the extent practicable.
Please identify your submission by Docket Number (FTA-2017-0008) through one of the following methods:
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Laura Ames, Attorney Advisor, at (202) 366-2743 or
The purpose of this notice is to provide notice and seek comment on whether the FTA should grant a non-availability waiver for FDOT's purchase of motor brakes and machinery brakes for the SE 3rd Avenue Bascule Bridge Modification in Fort Lauderdale, Florida, as part of the Wave Streetcar project. The proposed Wave Streetcar project will serve downtown Fort Lauderdale, spanning the New River to connect the hospital and courthouse districts on the south side with the downtown business core and government, education, shopping, recreation and entertainment centers on the north side. The design of the 2.8-mile route was expanded in October 2015 to include a loop on the north end in Flagler Village to capture recent and future residential and retail development in that area. The construction of the Wave Streetcar is currently scheduled to begin in mid-2017.
Mechanical drive systems have inherent braking requirements. AASHTO Movable Highway Bridge Design Specifications (MHBDS) require disc or drum brakes. The intent of AASHTO MHBDS 5.5, 5.6, 6.7.13 and the FOOT Structures Design Guidelines (SDG) Section 8.6.7 is to provide two sets of brakes—motor brakes and machinery brakes. This requirement provides stopping and holding as well as a failsafe within the gear train of the operating machinery. FDOT's research indicates that the size of the disc and drum brakes required for this bridge are not domestically available. All recent new construction and rehabilitation of various moveable bridges in Florida have required Buy America waivers, including a Buy America waiver granted by FHWA on May 2, 2016 for the same items. 81 FR 26305 (May 2, 2016).
Specific requirements for the brakes are as follows: All brakes shall be spring actuated, thruster released, stainless steel, drum type brakes with adjustable torque setting and set time delay settings. Span drive brakes shall be sized per Movable Highway Bridge Design Specifications (MHBDS) with the exception that ice accretion loads may be ignored. Brakes shall be mill duty brakes meeting Association of Iron and Steel Engineers—National Electrical Manufacturers Association (AISE—NEMA) Standards. The brake setting shall be no more than 90% and no less than 40% of the continuous rated capacity. The delay setting for each set of brakes shall be staggered to prevent all brakes from setting simultaneously and shock loading the machinery.
There are no options other than the correct type of machinery brakes for failsafe and timed gradual setting. Brakes are an integral part of the movable bridge design. Brakes provide stopping and parking of the bascule leaves and are MHBDS required devices for the safety of the traveling public, both vehicular and navigation gradual setting. The brake application must be gradual as per the specified thruster to prevent damage to the bridge, loss of power or E-stop. Brakes are an integral part of the movable bridge design. Brakes provide stopping and parking of the bascule leaves and are MHBDS required devices for the safety of the traveling public, both vehicular and navigation.
With certain exceptions, FTA's Buy America requirements prevent FTA from obligating an amount that may be appropriated to carry out its program for a project unless “the steel, iron, and manufactured goods used in the project are produced in the United States.” 49 U.S.C. 5323(j)(1). A manufactured product is considered produced in the United States if: (1) All of the manufacturing processes for the product take place in the United States; and (2) all of the components of the product are of U.S. origin. A component is considered of U.S. origin if it is manufactured in the United States, regardless of the origin of its subcomponents. 49 CFR 661.5(d). If, however, FTA determines that “the steel, iron, and goods produced in the United States are not produced in a sufficient and reasonably available amount or are not of a satisfactory quality,” then FTA may issue a waiver (non-availability waiver). 49 U.S.C. 5323(j)(2)(B); 49 CFR 661.7(c).
Throughout the brake manufacturing industry, it is well documented that there are no brakes made in the United States that satisfy both the project requirements and the Buy America requirements. FDOT engaged in extensive efforts to identify and locate qualified domestically manufactured brake products, including contacting numerous known bridge brake manufacturers. FDOT's recent experience on similar projects has shown that contractors have been unable to locate qualified bridge brakes of either the shoe or disc type that have all components made in the United States. FDOT also has made an extensive effort to locate qualified domestically made brake products, including contacting known bridge brake manufacturers including the following manufactures: Johnson Industries, Mondel (made by Magnetek), Gemco (made by Ametek), Link Controls, Bubenzer, and Hiden. The manufacturers confirmed that they do not produce a product that meets both the Buy America provisions in accordance 49 CFR 661.7(c) and 49 U.S.C. 5323(j), and the requirements of AASHTO MHBDS Articles 5.5, 5.6 and 6. 7 .13. FDOT also conducted an internet search, which revealed several other brake manufacturers, but none make a qualified brake in the United States. Additionally, FDOT's program management consultant contacted several contractors that supply machinery and brakes for movable bridges but had no success in locating a qualified brake made entirely in the United States. FDOT's Program Management Consultant also has discussed this issue with other design engineers experienced in movable bridge machinery design and confirmed that they too have not been able to locate qualified brake products which are made in the United States.
Finally, under 49 U.S.C. 5323(j)(6), FTA cannot deny an application for a waiver based on non-availability unless FTA can certify that (i) the steel, iron, or manufactured good (the “item”) is produced in the United States in a sufficient and reasonably available amount; and (ii) the item produced in the United States is of a satisfactory quality. Additionally, FTA must provide a list of known manufacturers in the United States from which the item can be obtained. FTA is not aware of any United States manufacturers who produce the motor brakes and machinery brakes required for the SE 3rd Avenue Bascule Bridge Modification project.
FDOT's efforts to identify domestic manufacturers for the motor brakes and machinery brakes required for the SE 3rd Avenue Bascule Bridge Modification project were unsuccessful. FTA proposes to grant FDOT a non-availability waiver of the Buy America requirements for the motor brakes and machinery brakes required for the SE 3rd Avenue Bascule Bridge Modification project.
FTA is publishing this Notice to seek public and industry comment from all interested parties in accordance with 49 U.S.C. 5323(j)(3)(A). Such information and comments will help FTA understand completely the facts surrounding the request, including the merits of the request. After consideration of the comments, FTA will publish a second notice in the
Bureau of the Fiscal Service, Fiscal Service, Treasury.
Notice of rate to be used for Federal debt collection, and discount and rebate evaluation.
The Secretary of the Treasury is responsible for computing and publishing the percentage rate that is used in assessing interest charges for outstanding debts owed to the Government. This rate is also used by agencies as a comparison point in evaluating the cost-effectiveness of a cash discount. In addition, this rate is used in determining when agencies should pay purchase card invoices when the card issuer offers a rebate. Notice is hereby given that the applicable rate for calendar year 2018 is 1.00 percent.
January 1, 2018 through December 31, 2018.
Denice M. Wilson, E-Commerce Division, Bureau of the Fiscal Service, Department of the Treasury, 401 14th Street SW., Washington, DC 20227 (Telephone: 202-874-9428).
This rate is used in assessing interest charges for outstanding debts owed to the Government (The Debt Collection Act of 1982, as amended (codified at 31 U.S.C. Section 3717)). This rate is also used by agencies as a comparison point in evaluating the cost-effectiveness of a cash discount. In addition, this rate is used in determining when agencies should pay purchase card invoices when the card issuer offers a rebate (5 CFR 1315.8).
The rate reflects the current value of funds to the Treasury for use in connection with Federal Cash Management systems and is based on investment rates set for purposes of Public Law 95-147, 91 Stat. 1227 (October 28, 1977). Computed each year by averaging Treasury Tax and Loan (TT&L) investment rates for the 12-month period ending every September 30, rounded to the nearest whole percentage, for applicability effective each January 1. Quarterly revisions are made if the annual average, on a moving basis, changes by 2 percentage points. The rate for calendar year 2018 reflects the average investment rates for the 12-month period that ended September 30, 2017.
31 U.S.C. Section 3717.
The Department of Veterans Affairs (VA) gives notice under the Federal Advisory Committee Act (FACA) that the National Research Advisory Council will hold a meeting on Wednesday, December 6, 2017, at the Atlanta Veterans Affairs Medical Center, Conference Room 5a110 at 1670 Clairmont Rd., Decatur, Georgia 30033. The meeting will convene at 9:00 a.m. and end at 4:30 p.m. This meeting is open to the public.
The agenda will include scientific presentations on animal research, mental health, rehabilitation and a facility tour. Additional presentations will include: Balancing research challenges, an overview of the animal research program from the Chief
Consumer Product Safety Commission.
Final rule.
The United States Consumer Product Safety Commission (Commission or CPSC) issues this final rule prohibiting children's toys and child care articles that contain concentrations of more than 0.1 percent of diisononyl phthalate (DINP), diisobutyl phthalate (DIBP), di-
The rule will become effective on April 25, 2018.
For information related to the phthalates prohibitions, contact: Carol L. Afflerbach, Compliance Officer, Office of Compliance and Field Operations, Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814-4408; telephone: 301-504-7529; email:
Outline. The information in this preamble is organized as follows:
In accordance with the Consumer Product Safety Improvement Act of 2008 (CPSIA), the Commission issues this final rule prohibiting children's toys and child care articles containing concentrations of more than 0.1 percent of certain phthalates.
Section 108 of the CPSIA establishes requirements concerning phthalates. Section 108(a) of the CPSIA permanently prohibits the manufacture for sale, offer for sale, distribution in commerce, or importation into the United States of any “children's toy or child care article” that contains concentrations of more than 0.1 percent of di(2-ethylhexyl) phthalate (DEHP), dibutyl phthalate (DBP), or butyl benzyl phthalate (BBP). 15 U.S.C. 2057c(a). In addition, section 108(b)(1) prohibits on an interim basis (
• “Children's toy” is “a consumer product designed or intended by the manufacturer for a child 12 years of age or younger for use by the child when the child plays.”
• “child care article” is “a consumer product designed or intended by the manufacturer to facilitate sleep or the feeding of children age 3 and younger, or to help such children with sucking or teething.”
• A “toy can be place in a child's mouth if any part of the toy can actually be brought to the mouth and kept in the mouth by a child so that it can be sucked and chewed. If the children's product can only be licked, it is not regarded as able to be placed in the mouth. If a toy or part of a toy in one dimension is smaller than 5 centimeters, it can be placed in the mouth.”
The CPSIA directs the CPSC to convene a Chronic Hazard Advisory Panel (CHAP) “to study the effects on children's health of all phthalates and phthalate alternatives as used in children's toys and child care articles.”
The CPSIA requires the Commission to promulgate a final rule, pursuant to section 553 of the Administrative Procedure Act (APA), not later than 180 days after the Commission receives the final CHAP report. The Commission must “determine, based on such report, whether to continue in effect the [interim] prohibition . . . , in order to ensure a reasonable certainty of no harm to children, pregnant women, or other susceptible individuals with an adequate margin of safety. . . .” 15 U.S.C. 2057c(b)(3)(A). Additionally, the Commission must “evaluate the findings and recommendations of the Chronic Hazard Advisory Panel and declare any children's product containing any phthalates to be a banned hazardous product under section 8 of the Consumer Product Safety Act (15 U.S.C. 2057), as the Commission determines necessary to protect the health of children.”
On December 30, 2014, the Commission published a notice of proposed rulemaking (NPR) in the
The NPR generally followed the recommendations of the CHAP report. As explained further in section III of this preamble, the CHAP focused on certain phthalates' effect on male reproductive development. After reviewing relevant studies, the CHAP found that certain phthalates (which the CHAP called active or antiandrogenic) cause adverse effects on the developing male reproductive tract. The CHAP determined that these phthalates act in a cumulative fashion. The CHAP concluded that DINP is an active (antiandrogenic) phthalate. Based on the cumulative risk assessment conducted by the CHAP, the Commission determined that “to ensure a reasonable certainty of no harm to children, pregnant women, or other susceptible individuals with an adequate margin of safety,” the Commission proposed to permanently prohibit children's toys and child care articles containing concentrations of more than 0.1 percent of DINP. The Commission proposed making the interim prohibition concerning DINP permanent because the Commission concluded that allowing the use of DINP in children's toys and child care articles would further increase the cumulative risk to male reproductive development. Although the interim prohibition applies to children's toys that can be placed in a child's mouth and child care articles, the NPR proposed permanently prohibiting DINP in all children's toys and child care articles. 79 FR at 78334-35.
The Commission proposed lifting the interim prohibitions regarding DIDP and DNOP. The Commission agreed with the CHAP that DIDP and DNOP are not antiandrogenic, and therefore, they do not contribute to the cumulative risk from antiandrogenic phthalates. The CHAP determined that neither phthalate poses a risk in isolation. Therefore, the Commission concluded that continuing the prohibitions regarding DIDP and DNOP is not necessary to ensure a reasonable certainty of no harm to children, pregnant women, or other susceptible individuals with an adequate margin of safety.
In addition, the Commission determined that DIBP, DPENP, DHEXP, and DCHP are associated with adverse effects on male reproductive development and contribute to the cumulative risk from antiandrogenic phthalates. The Commission agreed with the CHAP's recommendation and proposed to prohibit children's toys and child care articles containing concentrations of more than 0.1 percent of DIBP, DPENP, DHEXP, and DCHP. 79 FR at 78326-38. The Commission proposed that the rule would take effect 180 days after publication of a final rule in the
As explained further in section III.C.2 of this preamble, the CHAP based its analysis, in part, on human biomonitoring data from the Centers for Disease Control and Prevention's (CDC) National Health and Nutrition Examination Survey (NHANES). The CHAP analyzed data from NHANES' 2005/2006 data cycle. That data set had a larger number of pregnant women than is usual for NHANES data sets. Since publication of the NPR, CPSC staff has reviewed and analyzed the NHANES data cycles released by the CDC after the 2005/2006 data cycle. CPSC staff issued a report in June 2015 concerning the NHANES data sets that had been released up to that point: “Estimated Phthalate Exposure and Risk to Pregnant Women and Women of Reproductive Age as Assessed Using Four NHANES Biomonitoring Data Sets (2005/2006, 2007/2008, 2009/2010, 2011/2012).”
In December 2016, the CDC released the NHANES 2013/14 data cycle. CPSC staff prepared a document with staff's analysis of the NHANES 2013/14 data cycle titled, “Estimated Phthalate Exposure and Risk to Women of Reproductive Age as Assessed Using 2013/2014 NHANES Biomonitoring Data.”
The NPR, which published in the
The Commission has considered the CHAP report, CPSC staff's analyses, and comments submitted on the NPR and staff's reports concerning later NHANES data cycles. CPSC staff prepared a briefing package for the Commission that provides staff's analysis of these materials and gives staff's recommendations for the final rule. Staff's briefing package is available at:
In the interest of clarity, the final rule restates the CPSIA's permanent prohibition on the manufacture for sale, offer for sale, distribution in commerce, or importation into the United States of any children's toys and child care articles that contain concentrations of more than 0.1 percent of DEHP, DIBP, or BBP.
The final rule continues the interim prohibition concerning DINP and expands that restriction to prohibit all children's toys (not just those that can be place in a child's mouth) and child care articles that contain concentrations of more than 0.1 percent of DINP. After reviewing the information presented by the CHAP, CPSC staff, and commenters, the Commission concludes that continuing the interim prohibition regarding DINP will ensure a reasonable certainty of no harm to children, pregnant women, or other susceptible individuals with an adequate margin of safety. The Commission also determines that expanding the prohibition regarding DINP to cover all children's toys, not just those that can be placed in a child's mouth, is necessary to protect the health of children.
The final rule also prohibits children's toys and child care articles that contain concentrations of more than 0.1 percent of DIBP, DPENP, DHEXP, and DCHP. After reviewing the information presented by the CHAP, CPSC staff, and commenters, the Commission concludes that this restriction on the four additional phthalates is necessary to protect the health of children.
The final rule adds a paragraph, not in the proposed rule, that repeats the statutory provision stating that the phthalates prohibitions apply to plasticized component parts of children's toys and child care articles, or other component parts of those products that are made of materials that may contain phthalates.
As was proposed, the final rule will take effect 180 days after publication in the
Section 108 of the CPSIA provides the legal authority for this rule. As directed by section 108(b)(2), the Commission convened a CHAP to study the effects on children's health of phthalates and phthalate alternatives. The CPSIA directs the CHAP to examine “the full range of phthalates that are used in products for children,” and to consider numerous issues specified in the statute (discussed further in section III.A of this preamble). As required by section 108(b)(2)(C), the CHAP prepared a report for the Commission that included recommendations to the Commission concerning any phthalates not already subject to the permanent prohibition or phthalate alternatives that should be prohibited. 15 U.S.C. 2057c(b)(2)(C).
The CPSIA further directs that, within 180 days of receiving the CHAP's report, the Commission shall promulgate a final rule in accordance with section 553 of the APA. The Commission must “determine, based on such report, whether to continue in effect the [interim] prohibition . . ., in order to ensure a reasonable certainty of no harm to children, pregnant women, or other susceptible individuals with an adequate margin of safety.”
A violation of the permanent or interim prohibitions or any rule the Commission subsequently issues under section 108(b)(3) “shall be treated as a violation of section 19(a)(1) of the Consumer Product Safety Act.”
Section 108 of the CPSIA sets out the criteria for the Commission's determinations in this rulemaking. Regarding phthalates subject to the interim prohibition, the Commission is to determine, based on the CHAP report, whether their continued regulation is needed “to ensure a reasonable certainty of no harm . . . with an adequate margin of safety.” Regarding other children's products and other phthalates, the Commission is to evaluate the CHAP report and determine whether additional restrictions are “necessary to protect the health of children.” 15 U.S.C. 2057c(b)(3). Congress required the Commission to use these criteria for the phthalates rulemaking.
Comments raised various issues concerning the Commission's legal authority for this rulemaking. These comments focused primarily on: The CPSIA's requirements for the CHAP, the CPSIA's requirements for the rulemaking, relevance of (and compliance with) the Information Quality Act (IQA), and compliance with requirements of the Administrative Procedure Act (APA). This section summarizes and responds to key issues raised by comments related to the Commission's legal authority. Tab B of staff's briefing package provides a more detailed discussion of the comments and responses.
OMB's Guidelines apply to federal agencies that are subject to the Paperwork Reduction Act (PRA), 42 U.S.C. chapter 35. 67 FR 8453. This includes the CPSC. Both OMB's and CPSC's Guidelines apply to information that the agency “disseminates.” OMB's Guidelines define the term “dissemination” to mean “agency initiated or sponsored distribution of information to the public,” with several exclusions. Under OMB's Guidelines, if an agency releases information prepared by an outside party, but the agency then distributes the information “in a manner that reasonably suggests that the agency agrees with the information, this appearance of having the information represent agency views makes agency dissemination of the information subject to the guidelines.” 67 FR 8454. As the commenters noted, the CHAP report was not prepared by CPSC but by a third party. However, in the NPR, CPSC based its recommendations on the CHAP report as required by section 108 of the CPSIA. Thus, we agree that OMB's and CPSC's Guidelines apply to the CHAP report.
As discussed in the following comments/responses, OMB's Guidelines require agencies to adopt a basic standard of information quality that includes “objectivity, utility, and integrity.”
OMB's Guidelines define “influential” as:
“Influential”, when used in the phrase “influential scientific, financial, or statistical information”, means that the agency can reasonably determine that dissemination of the information will have or does have a clear and substantial impact on important public policies or important private sector decisions. Each agency is authorized to define “influential” in ways appropriate for it given the nature and multiplicity of issues for which the agency is responsible.
The CHAP report met the “objectivity” standard enunciated in the OMB Guidelines. The fact that the commenters might have conducted the analysis differently does not mean that the CHAP's analysis was not “objective.” The CHAP report clearly set forth its data sources and noted that to assess studies, it used the criteria of reliability, relevance, and adequacy established by the Organisation for Economic Cooperation and Development. CHAP report at pp. 13-14. The CHAP held open meetings during the process of developing its analysis, inviting experts to present their latest research findings and taking submissions of a large volume of written material. The CHAP members were selected in accordance with section 28 of the CPSA through a process to ensure their independence from bias (
For an analysis of risks to human health, safety, and the environment that an agency disseminates, OMB's Guidelines direct agencies to “adapt or adopt” the information quality principles of the SDWA. 67 FR 8460. The SDWA directs agencies to use: “ (i) The best available, peer-reviewed science and supporting studies conducted in accordance with sound and objective scientific practices; and (ii) data collected by accepted methods or best available methods (if the reliability of the method and the nature of the decision justifies use of the data).”
The CHAP considered new scientific information published up to the end of 2012, and used standard and acceptable methods for study review, conducting an unbiased literature search and publication identification and in-depth review and reporting of the most important publications. Specifically, the CHAP included many elements of systematic review methods in its work. The CHAP used a defined literature search strategy and limited the search to studies published through 2012. The CHAP considered the quality, relevance, and weight of evidence (WOE) of individual studies. The CHAP described criteria for evaluating published studies, CHAP report at pp. 19-23, and the CHAP ensured that all studies and data were publicly available. The CHAP also described the criteria used to formulate its recommendations on individual phthalates and phthalate alternatives.
All current scientific publications and NHANES data sets have been analyzed by the CHAP and CPSC staff in preparation for the final rule. This fulfills the CPSIA's directive to review “all relevant data” and to include “the most recent” studies.
Regarding the assertion that the CHAP ignored 32 relevant publications, CPSC staff reviewed this claim. The CHAP cited approximately 250 articles using a systematic approach to select the most relevant and informative articles. Five of the 32 articles the commenter identified are not relevant because they considered effects that are not relevant to the CHAP's focus on male reproductive development (
In accordance with the CPSIA's direction to the CHAP, the CHAP's cumulative risk analysis estimated phthalate exposure from all phthalates and all sources, not only toys and child care articles. Because the CPSIA prohibition covers only children's toys and child care articles, exposures to DEHP, DBP, and BBP still occur from other sources. Thus, the CHAP and subsequent staff analyses provide a robust assessment of the “likely levels” of current exposures to phthalates.
• “Study the effects on children's health of all phthalates and phthalate alternatives as used in children's toys and child care articles”;
• “consider the potential health effects of each of these phthalates both in isolation and in combination with other phthalates”; and
• “consider the cumulative effects of total exposure to phthalates, both from children's products and from other sources, such as personal care products.”
We are aware of two other statutory schemes that use somewhat similar language. The Food Quality Protection Act (FPQA) uses a similar phrase regarding tolerance levels for pesticide residue on food. That provision requires the U.S. Environmental Protection Agency (EPA) to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue.” 21 U.S.C. 346a(b)(2)(A)(ii)(I). Under the Federal Food, Drug, and Cosmetic Act (FDCA), food additives must be “safe.” 21 U.S.C. 348. FDA has issued regulations that define “safe or safety” to mean “that there is a reasonable certainty in the minds of competent scientists that the substance is not harmful under the intended conditions or use.” In a very general sense, CPSC's approach on phthalates is consistent with FDA and EPA in that CPSC's evaluation is based on expert scientific opinion (the CHAP), takes into account the cumulative effect of the substance at issue (phthalates), and provides appropriate safety factors (
Regarding the level of certainty required, the language “ensure a reasonable certainty of no harm . . . with an adequate margin of safety” calls for a highly protective standard, but not 100 percent certainty of no harm. Congress required “a reasonable certainty of no harm,” not an absolute certainty of no harm.
• There is a reasonable certainty of no harm without such a prohibition (due to permanent prohibition involving DEHP);
• DINP contributes only a small fraction to overall risk;
• the endpoint of antiandrogenicity is likely inappropriate;
• it is questionable that DINP should be included in a cumulative risk assessment;
• it is questionable that a cumulative risk assessment provides a reasonable basis for a regulatory decision;
• DEHP levels have dropped so that the Hazard Index (HI) is now well below one; and
• even using the 2005/2006 NHANES data, the contribution of DINP to the overall HI is minimal and the major source of exposures is diet—children's products account for only a small fraction of overall HI.
In contrast, another commenter stated that the CHAP's recommendation and the Commission's proposal to permanently prohibit children's toys and child care articles containing more than 0.1 percent of DINP are justified. The commenter stated that data indicating that DINP is a potential health risk have gotten stronger since release of the CHAP report. (Comment 8.16).
The CPSIA directed the Commission to convene a CHAP “to study the effects on children's health of all phthalates and phthalate alternatives as used in children's toys and child care articles.” 15 U.S.C. 2057c (b)(2). The statute provides very specific direction to the CHAP regarding its work. The CHAP must:
Complete an examination of the full range of phthalates that are used in products for children and shall—
• examine all of the potential health effects (including endocrine disrupting effects) of the full range of phthalates;
• consider the potential health effects of each of these phthalates both in isolation and in combination with other phthalates;
• examine the likely levels of children's, pregnant women's, and others' exposure to phthalates, based on a reasonable estimation of normal and foreseeable use and abuse of such products;
• consider the cumulative effect of total exposure to phthalates, both from children's products and from other sources, such as personal care products;
• review all relevant data, including the most recent, best-available, peer-reviewed, scientific studies of these phthalates and phthalate alternatives that employ objective data collection practices or employ other objective methods;
• consider the health effects of phthalates not only from ingestion but also as a result of dermal, hand-to-mouth, or other exposure;
• consider the level at which there is a reasonable certainty of no harm to children, pregnant women, or other susceptible individuals and their offspring, considering the best available science, and using sufficient safety factors to account for uncertainties regarding exposure and susceptibility of children, pregnant women, and other potentially susceptible individuals; and
• consider possible similar health effects of phthalate alternatives used in children's toys and child care articles.
The CHAP's process was open and transparent. The CHAP met in public session (and webcast) seven times and met via teleconference (also open to the public) six times.
At a meeting on July 26-28, 2010, the CHAP heard testimony from the public, including testimony from federal agency representatives, who discussed federal activities on phthalates. The CHAP also invited experts to present their latest research findings at the meeting in July 2010 and during subsequent meetings. Members of the public who presented testimony to the CHAP at the July 2010 meeting included manufacturers of phthalates and phthalate substitutes, as well as representatives of non-governmental organizations. In addition to oral testimony, the manufacturers and other interested parties submitted an extensive volume of toxicity and other information to the CHAP and the CPSC staff. All submissions given to CPSC staff were provided to the CHAP.
Although the CPSIA did not require peer review of the CHAP's work, at the CHAP's request, four independent scientists peer reviewed the draft CHAP report. CPSC staff applied the same criteria for selecting the peer reviewers as is required for the CHAP members.
The CHAP reviewed all of the potential health effects of phthalates. The CHAP explained that, although phthalates cause a wide range of toxicities, the CHAP focused on male reproductive developmental effects (MRDE) in part because this is the most sensitive and extensively studied endpoint for phthalates. The CHAP noted that this focus was consistent with a 2008 report from the National Research Council.
The CHAP noted that, although there is a great deal of information on
The CHAP reviewed, and discussed in its report, studies examining the mechanism by which phthalates produce adverse effects. The CHAP concluded that the phthalate syndrome effects are largely due to the suppression of testosterone production, as well as reduced expression of the insulin-like hormone 3 gene.
In addition to studies on animals, the CHAP also reviewed studies on the effect that exposure to phthalates has on human health (epidemiological studies). The CHAP noted that rat phthalate syndrome resembles testicular dysgenesis syndrome (TDS) in humans. TDS includes poor semen quality, reduced fertility, testicular cancer, undescended testes, and hypospadias.
The CHAP assessed human exposure to phthalates by two different, but complementary, methods: Human biomonitoring (HBM) and exposure-scenario analysis. HBM relies on measurements of phthalate metabolites in human urine to estimate exposure to phthalates.
The HBM data do not measure the sources of people's exposure to phthalates. For this, the CHAP used a scenario-based exposure assessment.
In accordance with the CPSIA's direction, the CHAP considered health effects of phthalates “in combination with other phthalates.” 15 U.S.C. 2057c(b)(2)(B)(ii). The CHAP found, based on published studies, that active phthalates act in an additive fashion. That is, exposures to multiple phthalates at lower doses act in concert to produce the same effect as a higher dose of a single phthalate. The CHAP stated: “Experimental data on combination of effects of phthalates from multiple studies (
For its cumulative risk assessment, the CHAP used a Hazard Index (HI) approach which, the CHAP noted, is widely used in cumulative risk assessments of chemical mixtures.
The CHAP calculated the HI per woman and infant, using the NHANES data on pregnant women (representing exposure to the fetus) and the SFF data on children. The CHAP found that roughly 10 percent of pregnant women in the U.S. population have HI values that exceed 1.0 (pregnant women had median HIs of about 0.1 (0.09 to 0.14), while the 95th percentile HIs were
Regarding the HQs for the individual phthalates, the CHAP found that DEHP dominated, “with high exposure levels and one of the lowest PEAAs.”
In accordance with the CPSIA's direction, the CHAP also considered the risks of phthalates in isolation. 15 U.S.C. 2057c(b)(2)(B)(ii). The CHAP used a margin of exposure (MOE) approach to assess the risks in isolation. CHAP report at p. 69. The MOE is the “no observed adverse effect level” (NOAEL) of the most sensitive endpoint in animal studies divided by the estimated exposure in humans. Higher MOEs indicate lower risks. Generally, MOEs greater than 100 to 1,000 are adequate to protect public health.
The CHAP recommended that the Commission permanently prohibit the use of DINP in children's toys and child care articles at levels greater than 0.1 percent. The CHAP explained that, although DINP is less potent than other active phthalates, it induces antiandrogenic effects in animals, and therefore, DINP can contribute to the cumulative risk from other antiandrogenic phthalates.
The CHAP explained that studies exposing rats to DINP during the critical period of fetal development showed effects on male reproductive development. The CHAP stated: “Five such studies have shown that DINP exposure in rats during the perinatal period is associated with increased incidence of male pups with areolae and other malformations of androgen-dependent organs and testes (Gray
The CHAP report discussed the CHAP's determination of a NOAEL for DINP.
Taken together, the data from Boberg
Considering risk in isolation (following the MOE approach), the CHAP found MOEs that are generally considered adequate for public health. For male developmental effects, in infants (using the SFF study) the CHAP stated that the total exposure ranged from 640 to 42,000, using 95th percentile estimates of exposure. For pregnant women (using NHANES data), the CHAP stated that the MOE for total DINP exposure ranged from 1000 to 68,000. The CHAP stated: “Typically, MOEs exceeding 100-1000 are considered adequate for public health; however, the cumulative risk of DINP with other antiandrogens should also be considered.”
In making its recommendation to the CPSC concerning DINP, the CHAP stated: “The CHAP recommends that the interim ban on the use of DINP in children's toys and child care articles at levels greater than 0.1% be made permanent. This recommendation is made because DINP does induce antiandrogenic effects in animals, although at levels below that for other active phthalates, and therefore can contribute to the cumulative risk from other antiandrogenic phthalates.”
The CHAP reviewed data on DNOP.
The CHAP reviewed data on DIDP.
Due to their adverse effect on male reproductive development (and thus their contribution to the cumulative risk from other antiandrogenic phthalates), the CHAP recommended that the Commission permanently prohibit the use of four additional phthalates at levels greater than 0.1 percent in children's toys and child care articles.
The CHAP found that DIBP is similar in toxicity to DBP, one of the phthalates subject to the CPSIA's permanent prohibition. The CHAP reviewed studies that found that exposure to DIBP had effects on male reproductive development. The CHAP stated: “Six studies in which rats were exposed to DIBP by gavage during late gestation showed that this phthalate reduced AGD in male pups, decreased testicular testosterone production, increased nipple retention, increased the incidence of male fetuses with undescended testes, increased the incidence of hypospadias, and reduced the expression of P450scc, ins13, genes related to steroidogenesis, and StAR protein (Saillenfait
Regarding exposure, the CHAP noted that DIBP has been detected in some toys during routine CPSC compliance testing. The CHAP stated: “DIBP is too volatile to be used in PVC but is a component in nail polish, personal care products, lubricants, printing inks, and many other products.”
Assessing risk, the CHAP found: “The margins of exposure (95th percentile total DIBP exposure) for pregnant women in the NHANES study ranged from 5,000 to 125,000. For infants in the SFF study, the MOE (95th percentile total DIBP exposure) ranged from 3,600 to 89,000.”
Current exposures to DIBP alone do not indicate a high level of concern. DIBP is not widely used in toys and child care articles. However, CPSC has recently detected DIBP in some children's toys. Furthermore, the toxicological profile of DIBP is very similar to that of DBP, and DIBP exposure contributes to the cumulative risk from other antiandrogenic phthalates. The CHAP recommends that DIBP should be permanently banned from use in children's toys and child care articles at levels greater than 0.1%.
Although DPENP is not widely used, the CHAP found that it is the most potent phthalate with respect to developmental toxicity. According to the CHAP, two studies (Howdeshell
According to the CHAP, a National Toxicology Program review of DHEXP in 2003 reported that based on the limited data available at that time, DHEXP is a developmental toxicant at high doses (9900 mg/kg-d), but the data were not adequate to determine an NOAEL or LOAEL. The CHAP stated that since then, “one developmental toxicity study has reported that DHEXP exposure reduced the AGD in male pups in a dose-related fashion and increased the incidence of male fetuses with undescended testes (Saillenfait
The CHAP stated that DHEXP is currently not found in children's toys or child care articles and is not widely found in the environment. It is primarily used in the manufacture of PVC and screen printing inks and is also used “as a partial replacement for DEHP.”
The CHAP found that studies on DCHP showed effects on male reproductive development. The CHAP report states: “Two studies in rats exposed to DCHP by gavage during late gestation showed that this phthalate prolonged preputial separation, reduced AGD, increased nipple retention, and increased hypospadias in male offspring (Sallenfait
The CPSIA also directed the CHAP to consider health effects of phthalate alternatives and to include in its report to the Commission recommendations for any phthalate alternatives that should be banned. 15 U.S.C. 2057c(b)(2)(B)(viii) and 2057c(b)(2)(C). The CPSIA defines “phthalate alternative” as “any common substitute to a phthalate, alternative material to a phthalate, or alternative plasticizer.”
Comments concerning the substance of the CHAP's analysis are discussed in section IV of this preamble. This section covers comments concerning the CHAP's process.
(1) Could have a potential impact of more than $500 million in any year, or
(2) is novel, controversial, or precedent-setting or has significant interagency interest.
One might consider the CHAP report to be a “novel, controversial, or precedent-setting” report that it could be of “significant interagency interest” because, as the CHAP report indicates, many of the products that contain phthalates (
Additionally, the CPSC made public: The identity of the peer reviewers, the charge to the peer reviewers, the draft report that was reviewed, and the peer reviewers' comments. CPSC posted all of the information on the CPSC Web site at the same time the final CHAP report was released to the public; and the information is available on the CPSC's Web site, in accordance with the additional requirements for a highly influential scientific assessment.
Finally, regarding public comment, as discussed in the next response, the peer review process used by CPSC complied with the OMB Bulletin.
Although the OMB Bulletin uses the term “requirements,” the document emphasizes the intent to allow agencies flexibility in determining appropriate methods of peer review,
This section presents the final rule and explains the Commission's rationale for the rule. The Commission has considered the CHAP report, staff's analysis of the CHAP report, staff's analysis of recent NHANES data, and the public comments submitted in response to the proposed rule and staff's NHANES reports. More specifically, we present the Commission's rationale for the rule by explaining the Commission's consideration of: Phthalates' effects on male reproductive development, human exposure to phthalates, assessment of phthalates' cumulative risk and risks in isolation, and assessment of risk for each phthalate that the CHAP considered. In addition, the Commission considered the appropriate concentration limit for the phthalates restrictions and the appropriate effective date for the rule. In this section, we also discuss phthalate requirements established by international standards and other countries.
In accordance with the CPSIA's direction, the CHAP reviewed all available toxicity data on phthalates. The CHAP determined that the critical endpoint for its analysis was adverse effects on male reproductive development (MRDE) and other adverse effects on male fertility. This focus was consistent with the NRC's 2008 assessment. As noted in the NPR, CPSC staff supports the CHAP's choice to focus on this endpoint because: MRDE in animals is associated with many of the most common phthalates; for most active phthalates, these effects are the most sensitive health effect; and phthalate syndrome in animals resembles testicular dysgenesis syndrome (TDS) in humans. Moreover, phthalates' effects on male reproductive development are well studied. 79 FR 78331-32.
As the CHAP reported, “Studies conducted over the past 20 plus years have shown that phthalates produce a syndrome of reproductive abnormalities in male offspring when administered to pregnant rats during the later stages of pregnancy.” CHAP report at p. 15. These effects include: Reduced testosterone synthesis, reduced anogenital distance (AGD), nipple retention (normally does not occur in male rats), undescended testes, testicular atrophy, testicular histopathology, multi-nuclear gonocytes (MNGs), reduced production of insulin-like hormone 3 (insl3), underdeveloped gubernacular cords,
As discussed in the CHAP report, studies have reported similar effects in species other than rats, such as guinea pigs, mice, rabbits, and ferrets.
Several commenters raised issues concerning phthalates' effects on male reproductive development (MRDE). They asserted that studies do not support a determination that phthalates have the same effects on male reproductive development in humans (and other animals) as they do in rats. Commenters also asserted that, even if phthalates have some effect, humans are less sensitive and the CHAP failed to take this into account, especially through appropriate uncertainty factors. Additionally, commenters raised questions about the epidemiology studies the CHAP discussed,
Furthermore, the most sensitive species is generally used in assessing risks to humans.
Regarding the marmoset studies, the CHAP paid particular attention to these studies and invited Richard Sharpe, the principal investigator of the Hallmark and McKinnell studies, to present his findings at the CHAP meeting in November 2011. Dr. Sharpe agreed with the CHAP that both studies were limited by the small numbers of animals used and the brief duration of exposure. Dr. Sharpe added that his studies were very preliminary and that it would be premature to use his studies' results to support public health decisions. Even though limited, the published studies do show that the phthalate metabolite suppressed steroidogenesis in neonatal marmosets.
Regarding the xenograft studies, commenters cited two studies in which rat fetal testes or human fetal testicular tissue were transplanted (xenografted) into rats (Heger
Regarding DES and finasteride, the CHAP assessed each phthalate based on the best available data for each individual chemical, and based its recommendations on those assessments. The CHAP did not base its conclusions on an assumption that all phthalates will behave the same way as DES or finasteride. The DES and finasteride publication cited by commenters implies that humans are less sensitive than rats to these two chemicals. However, this assertion does not mean that all phthalates will produce similar biological effects as DES or finasteride; phthalates do not have a similar chemical structure, are not metabolized or detoxified in the same way, and will not have similar dose-response curves to those of DES or finasteride.
Humans are frequently more sensitive to reproductive and developmental effects than animals,
An uncertainty factor is also used to account for differences in how members of the same species could react to a chemical (
Reduced AGD is one of many effects associated with phthalate syndrome. Studies demonstrate that phthalates cause permanent effects on male reproductive development.
Testosterone production is required throughout a male's lifetime to maintain the ability to reproduce.
In July 2017, the National Academies of Sciences, Engineering, and Medicine (NAS) released a report entitled,
Unlike the CHAP report, the NAS study is not a risk assessment. Rather, the NAS study reviewed individual phthalates and three individual health effects, focusing on whether enough quality data existed to term the particular phthalates a reproductive hazard to humans. In contrast, the CHAP considered all phthalate syndrome effects. In spite of these differences, the NAS report's conclusions are consistent with the CHAP and staff's hazard conclusions. The phthalates section of the NAS report focused on DEHP, and provided a “final hazard conclusion” for each of the endpoints. Thus, for fetal testosterone and AGD, DEHP is presumed to be a reproductive hazard to humans; for hypospadias, DEHP is suspected to be a reproductive hazard to humans (NAS 2017, pp. 78-81). For the other assessed phthalates, including DINP, the NAS report did not conduct the final analysis step that results in a “final hazard conclusion.” The report provides only the “initial hazard evaluations” for fetal testosterone, AGD, and hypospadias in humans. The report found for fetal testosterone, the phthalates BBP, DBP, DEP, DIBP, DINP, and DPP are presumed to be reproductive hazards to humans; DEP is not classifiable for this endpoint (NAS 2017, Table 3-30). AGD, BBP, DBP, and DEP are presumed to be reproductive hazards to humans, while DIBP, DIDP, and DINP are not classifiable (NAS 2017, Table 3-29). For hypospadias, BBP is suspected to be a reproductive hazard to humans and DBP is presumed to be a reproductive hazard to humans (NAS 2017, Table 3-31). The NAS committee did not evaluate DHEXP, DCHP, or DIOP.
With regard to DINP, the NAS study concluded:
• DINP effect on Fetal Testosterone: The NAS concluded: “there is a high level of evidence that fetal exposure to DINP is associated with a decrease in fetal testosterone in male rats,” and that there was “inadequate evidence to determine whether fetal exposure to . . . DINP, . . . is associated with a reduction in fetal testosterone in male humans.” Overall, the NAS' initial hazard evaluation of DINP and fetal testosterone in humans was that DINP was a “presumed human hazard.”
• DINP effect on AGD: The NAS concluded: “there is an inadequate level of evidence to assess whether fetal exposure to DINP is associated with a decrease in AGD in male rats,” and: “the available studies do not support DINP exposure being associated with decreased AGD.” Overall, the NAS' initial hazard evaluation of DINP and AGD in humans was “not classifiable.”
CPSC staff provides a more detailed discussion of the NAS report in the final rule briefing package at section III.B. of the briefing memorandum.
As noted, the CHAP considered exposure in two ways: Human biomonitoring studies that estimate total exposure to phthalates and the scenario-based assessment that estimates exposure to specific products and sources.
The CHAP used data from NHANES to estimate phthalate exposures to pregnant women. The CHAP also used human biomonitoring data from the SFF study to estimate exposures to infants and their mothers because NHANES does not collect data on children under 6 years old. The CHAP's analysis of NHANES data was based on the 2005/2006 data cycle. CPSC staff subsequently analyzed data from later NHANES data sets. Because the 2005/2006 data set was the last to sample a sufficient number of pregnant women to make reliable exposure estimates for pregnant women, CPSC staff's analyses are for women of reproductive age (WORA). Staff determined that WORA are a suitable surrogate for pregnant women. CPSC staff's June 2015 report; Tab A of staff's briefing package. CPSC staff then used the CHAP's methodology and later NHANES data sets (2007/2008, 2009/2010, 2011/2012) to estimate phthalate exposure, individual phthalate risk, and the cumulative risk (
In CPSC staff's analysis of NHANES data published following the CHAP's analysis, staff found that total phthalate exposures in WORA have changed. The median total exposure to the phthalates included in the CHAP's cumulative risk assessment (DEHP, DINP, BBP, DBP, DIBP) has increased by 20 percent in WORA. In particular, the estimated median DEHP exposure in WORA has declined over time, while the estimated median DINP exposure in WORA has increased fivefold since 2005/2006.
No new data on infants or pregnant women are available to quantify the effects of changing exposures. Given that the overall phthalate exposures to WORA have declined since 2005/2006, it is possible that exposures to infants and pregnant women have also declined. In general, studies indicate that infants' and children's exposures to chemicals tend to be greater than in adults.
Commenters raised concerns about various technical aspects of the NHANES data (
CPSC staff notes that longer-term exposures are not necessarily required to cause MRDE. Numerous studies in animals have demonstrated that MRDE and related effects can occur after one or a few doses.
Because biomonitoring data do not provide any information about the sources of phthalate exposure, the CHAP also included a scenario-based exposure assessment in its report. CHAP report at pp. 49-60, Appendix E1. The exposure assessment evaluated exposure from individual sources, such as toys, personal care products, and household products. The assessment considered the exposure routes of inhalation, direct and indirect ingestion, and dermal contact. The CHAP stated that its goal was to determine the significance of exposure to phthalates in toys and to estimate exposure to toddlers and infants for all soft plastic articles, except pacifiers (because pacifiers do not contain phthalates).
Scenario-based exposure estimates are developed using information about relevant sources of phthalate exposure (
The exposure assessment considered seven categories of exposure sources and activities involving those sources: Diet, prescription drugs, personal care products, toys, child care articles, indoor environment, and outdoor environment.
Although certain phthalates had not been permitted in children's toys and child care articles since 2008, the exposure assessment considered what contribution these products could make to overall phthalate exposure if those phthalates were allowed in children's toys and child care articles. The exposure analysis showed that, on average, mouthing and dermal exposure to toys could contribute around 12.8 percent to the overall DINP exposure of infants, if DINP were used in these products. CHAP report at Appendix E1, Table E-21. The same analysis shows that dermal contact with child care articles could contribute up to an additional 16.5 percent of the overall exposure to infants. Therefore, if DINP were used in all of the products that were included in the scenario-based exposure assessment, children's toys and child care articles could account for around 29 percent of infants' total exposure from all evaluated sources.
It is not possible to accurately quantify the number of toys that might have DINP in them if the interim prohibition were lifted or to quantify the effect that changes in DINP exposure would have on the percentage of the population (infants, pregnant women, or WORA) with HI less than or equal to one.
As the CPSIA directed, the CHAP considered risks of phthalates in combination and in isolation. The CHAP conducted a cumulative risk assessment to evaluate the effects of multiple phthalates, specifically phthalates known to cause MRDE and other adverse effects on male fertility. As explained in section III.C.3, the CHAP used information from toxicity studies concerning MRDE and human biomonitoring studies to determine a hazard quotient (HQ) for each phthalate and the hazard index (HI) for each individual in the two populations of interest (pregnant women and children). To assess risks of phthalates in isolation, the CHAP used a margin of exposure (MOE) approach.
For reasons discussed in sections III.C.1 and IV.A.1. of this preamble, the CHAP and CPSC have focused on phthalates' association with MRDE. The CHAP's and CPSC's determination of risk associated with the use of phthalates in children's toys and child care articles is based on a cumulative risk assessment that considers the contribution that allowing antiandrogenic phthalates to be used in children's toys and child care articles would have on the overall cumulative risk from phthalates. Relying on this cumulative risk assessment, the Commission determines that, to meet the CPSIA's criteria of reasonable certainty of no harm and protection of the health of children, it is necessary to prohibit children's toys and child care articles containing concentrations of more than 0.1 percent of the phthalates that can cause MRDE (DINP, DIBP, DPENP, DHEXP, and DCHP). In this section, we discuss the cumulative risk assessment and related comments. We discuss each phthalate in section IV.D of this preamble.
A cumulative risk assessment estimates the potential risk following exposure to multiple “stressors,” in this case, multiple phthalates. As discussed in section III.C of this preamble, the CHAP found, and CPSC agrees, that certain phthalates cause male reproductive developmental effects and may appropriately be considered in a cumulative risk assessment. CPSC concludes that a cumulative risk assessment is appropriate here because evidence indicates that phthalates are “dose additive.” That is, for phthalates that cause MRDE, the chemicals will act together; the effects of one such phthalate will add to the effects of another such phthalate. As the CHAP report explained, experimental studies show the additive effects of phthalates on MRDE.
This rule is based on a cumulative risk assessment that uses the methodology employed by the CHAP, along with exposure data from the most recent NHANES data sets. The cumulative risk assessment follows a hazard index (HI) approach that is commonly used for cumulative risk assessments. The CHAP's cumulative risk assessment was consistent with the recommendations of a National Academy of Sciences report on cumulative risk assessment of phthalates. Cumulative risk assessment of chemical mixtures has been an established practice since the 1980s. The CHAP introduced a minor modification to the standard methodology: The CHAP calculated hazard indices for each individual sampled in NHANES rather than the more common HI approach of using population percentiles from exposure studies on a per-chemical basis. This allowed the CHAP to calculate hazard quotients (HQs) for each phthalate and an HI for each individual in each study. This avoids overestimating the risk for individuals with higher than average exposures, such as those at the 90th and 95th percentiles.
The CHAP calculated an HQ for each phthalate using three sets of “potency estimates of antiandrogenicity” (PEAAs). The PEAA is an estimate of the exposure at which the risk of MRDE is negligible. The CHAP estimated a PEAA for each phthalate by dividing the MRDE “antiandrogenic” point of departure (POD; toxicity endpoint) by an uncertainty factor (UF). The POD is the lowest dose level at which an adverse effect was seen. A UF is a quantitative factor that is used to account for uncertainties associated with available data (
The CHAP calculated HQs for each phthalate by dividing the exposure by the PEAA. The CHAP then calculated the HI by summing the HQs for each phthalate. If the HI is greater than one, there may be concern for antiandrogenic effects in the exposed population due to cumulative effects of phthalates. As explained previously, the CHAP used 2005/2006 NHANES data for exposure estimates for pregnant women and 1999-2005 SFF data for exposure estimates for mothers and infants. CPSC staff subsequently repeated the CHAP's analysis using more recent NHANES data. The CHAP found that pregnant women had median HIs of about 0.1 (0.09 to 0.14), while the 95th percentile HIs were about 5, depending on which set of PEAAs was used. Roughly 10 percent of pregnant women had HIs greater than one. CHAP report at Table 2.16. Infants had median HIs about 0.2, while the 95th percentiles were between
The CHAP characterized the distribution of the estimated HIs, by reporting the central tendency measure (statistical median
The CHAP's HI approach is consistent with the CPSC's chronic hazard guidelines (Chronic Guidelines). The Chronic Guidelines discuss a safety factor approach to determine acceptable risk for a reproductive or developmental toxicant. 57 FR 46626, 46656 (Oct. 9, 1992). Under the safety factor approach, one determines the acceptable daily intake (ADI) for a substance by adding a safety factor to the lowest no observed effect level (NOEL) seen among relevant studies. The Chronic Guidelines state that if the hazard is ascertained from human data, a factor of 10 is applied to the NOEL, and if the hazard is ascertained from animal data, a factor of 100 is applied.
As discussed in the NPR preamble, based on the CHAP report, the Commission proposed to prohibit children's toys and child care articles containing the antiandrogenic phthalates the CHAP had examined. The NPR stated that the Commission considers that an HI less than one is necessary to ensure a reasonable certainty of no harm to children, pregnant women, or other susceptible individuals with an adequate margin of safety and to protect the health of children. 79 FR at 78334. The NPR also stated that the Commission considers that an HI less than one is necessary to protect the health of children.
In the NPR, the Commission stated the CHAP's determination that approximately 10 percent of pregnant women and 5 percent of infants had an HI greater than one. The Commission did not establish directly, however, that there was a specific proportion of the population that must have an HI less than or equal to one to ensure a “reasonable certainty of no harm with an adequate margin of safety” or to “protect the health of children.”
After publication of the NPR, CPSC staff analyzed NHANES data for WORA (from 2007 through 2014). CPSC staff reports for 2015 and 2017; TAB A of CPSC staff's briefing package: Staff's analysis shows that the risk to WORA, as indicated by HI, has decreased. Median and 95th percentile HIs for WORA are both less than one. Staff estimates that between 98.8 and 99.6 percent of WORA have HIs less than or equal to one. Out of a sample of 538 WORA in the 2013/2014 cycle, 99.5 percent of WORA have an HI less than or equal to one when considering PEAA Case 1 and 99.6 percent when considering Case 3. For PEAA Case 2, an estimated 98.85 percent of WORA have an HI less than or equal to one in the same cycle.
As noted in Tab A of the staff's briefing package, the decreases in HI are primarily due to decreases in DEHP exposures. The HQ for DINP is replacing the HQ for DEHP proportionally for contributions to the total HI. In each PEAA case, DINP has less potency than DEHP; thus, even though DINP's proportion of contribution to total HI is increasing, the values of HI have still decreased overall across cycles.
CPSC does not have exposure data for infants that is more recent than the SFF data on which the CHAP relied. Because the risk to WORA has declined since 2005/2006, it is possible that exposures and risks to infants have also declined. However, because the routes of exposure (
CPSC's assessment of the risk (and the need for this rule) is also informed by the fact that, although the overall risk as portrayed in the cumulative risk assessment has decreased, DINP's contribution to the cumulative risk has greatly increased. It is not possible to quantify accurately the number of toys expected to have DINP or the effect of changes in DINP exposure on the percentage of the population (infants, pregnant women, or WORA) with HI less than or equal to one. However, any increase in exposure due to resumed or increased use of DINP in products is likely to decrease the percentage of the population with HI less than or equal to one. Allowing DINP to be re-introduced into children's toys and child care articles would open a pathway of exposure to a phthalate that studies have clearly demonstrated causes adverse effects on male reproductive development. Although DIBP, DPENP, DHEXP, and DCHP are not currently found in children's toys and child care articles (or only rarely), these phthalates
Regarding low doses, studies of phthalate mixtures at low doses do not exist, and the commenters did not present any evidence of a threshold for phthalate-induced MRDE. Although mixture studies at low (environmental) doses have not been performed, there are published studies in which the doses of the individual phthalates produced little or no effect, but the mixtures produced significant cumulative effects.
Staff concludes that it is statistically appropriate to portray the individual NHANES data as a proportion of the NHANES sample population with an HI less than or equal to one. Staff notes that in the 2013/2014 NHANES sample of 538 WORA (of approximately 60 million WORA in the U.S. population), there were from two to nine individuals with a HI greater than one (
For its cumulative risk assessment, the CHAP addressed the range of HI in representative populations—including but not limited to the 50th percentile, 95th percentile, and 99th percentile. In all analyses of the updated NHANES data for WORA and in the rule, staff does not rely on any particular percentile as a threshold for recommendations or regulatory proposals, but on the fact that at least some of the actual WORA from the NHANES samples had HIs greater than one. Because at least some of the actual WORA from the NHANES samples had HIs greater than one in every NHANES data cycle analyzed, there is not a reasonable certainty of no harm with an adequate margin of safety. For example, for the 2013-14 NHANES data, between two and nine real women from the sample of 538 WORAs had an HI greater than one, depending on the case model used. The CHAP emphasized, and the Commission continues to agree, that an HI greater than one is the metric that defines excess exposure.
CPSC disagrees with the blanket statement that it is scientifically inappropriate to go above the 95th percentile in interpreting a cumulative risk assessment. There is no scientific basis for an assertion that the 95th percentile of a distribution is the largest value that can be considered. The commenter specified that the values above the 95th percentile are unstable. In this case, staff agrees that the values associated with the upper tail of the distribution of HIs (
Regarding other alleged flaws in the Hannas
In accordance with the CPSIA's direction, the CHAP also considered the risk of phthalates individually. 15 U.S.C. 2057c(b)(2)(B)(ii). As discussed in section III.C.3.b, to do this, the CHAP used an MOE approach. The CHAP chose this approach, in part, due to the recommendation of a NRC report on risk assessment methodology.
The CHAP assessed and made recommendations concerning each of the phthalates that it examined. CHAP report at pp. 82-121. Based on the CHAP report, CPSC staff's assessment, public comments on the NPR and staff's NHANES reports, the Commission issues this rule prohibiting children's toys and child care articles that contain concentrations of more than 0.1 percent of DINP, DIBP, DPENP, DHEXP, and DCHP. The Commission concludes that, based on the best available scientific data, all of these phthalates cause MRDE and all contribute to the cumulative risk. Previous sections of this preamble have discussed the health effect of MRDE, exposure to phthalates, and the risk assessment for these phthalates. This section presents the Commission's evaluation of each of the phthalates covered under this regulation.
The CPSIA established an interim prohibition on children's toys that can be placed in a child's mouth and child care articles that contain concentrations of more than 0.1 percent of DINP, DIDP, and DNOP. 15 U.S.C. 2057c (b)(1). The CPSIA directs the Commission to determine, based on the CHAP report, whether to continue in effect the interim prohibitions on children's toys that can be placed in a child's mouth and child care articles containing DINP, DIDP, and DNOP “to ensure a reasonable certainty of no harm to children, pregnant women, or other susceptible individuals with an adequate margin of safety.” Thus, for each of these phthalates, the Commission must decide whether it is appropriate to make the interim prohibitions permanent under the statutory criteria.
As explained in the preamble to the NPR and above, for phthalates causing MRDE, the Commission considered the cumulative risk, which was based on the CHAP's HI estimates. Consistent with the CHAP report, the Commission considers that the acceptable risk is exceeded when the HI is greater than one. This is also consistent with the CPSC's chronic hazard guidelines. 57
In the NPR, the Commission proposed to prohibit children's toys and child care articles containing more than 0.1 percent of DINP, DCHP, DHEXP, and DPENP based on the CHAP's determination that approximately 10 percent of pregnant women and 5 percent of infants had an HI greater than one. 79 FR at 78334-35. Thus, in issuing the NPR, the Commission concluded that the proportion of populations not affected by cumulative exposure to phthalates (at least 90 percent of pregnant women and 95 percent of infants) did not meet the standard of “a reasonable certainty of no harm with an adequate margin of safety.” The Commission did not establish directly, however, that there was a specific proportion of the population that must have an HI less than or equal to one to ensure a “reasonable certainty of no harm with an adequate margin of safety” or to “protect the health of children.”
Staff's analysis of the most recent NHANES data showed that exposures to phthalates have changed. Using the CHAP's cumulative risk assessment methodology and the most recent NHANES data, staff has determined that between 98.8 and 99.6 percent of WORA (2013/2014 NHANES) had an HI less than or equal to one. As in previous NHANES data cycles, some individuals in the 2013/2014 NHANES data set still have an HI greater than one. Depending on the PEAA case used for analysis, between two and nine of the approximately 538 WORA in the NHANES 2013/2014 data sample had an HI of greater than one.
The CHAP recommended that “the interim prohibition on the use of DINP in children's toys and child care articles at levels greater than 0.1 percent be made permanent.” CHAP report at p. 99. The CHAP stated that it made this recommendation “because DINP does induce antiandrogenic effects in animals, although at levels below that for other active phthalates, and therefore, can contribute to the cumulative risk from other antiandrogenic phthalates.”
CPSC staff examined more recent NHANES data than the dataset the CHAP considered. Using the CHAP's methodology and the 2013/2014 NHANES exposure data, CPSC staff determined that approximately 99 percent of WORA in the U.S. population now have an HI less than or equal to one (using the 2005/2006 NHANES data, 97 percent of WORA had an HI less than or equal to one). Additionally, CPSC staff's evaluation of recent NHANES data shows that exposure to DINP has increased approximately five-fold since 2005/2006. DINP now contributes as much to the cumulative risk as DEHP.
As shown by the scenario-based exposure assessment included in Appendix E-1 of the CHAP report, lifting the interim prohibition on children's toys that can be placed in the mouth and child care articles containing more than 0.1 percent DINP could increase exposure to DINP from these products, compared to exposures if DINP is not allowed in these products. If DINP were used in all of the products that were included in the scenario-based exposure assessment, DINP exposure from children's toys and child care articles could account for up to about 29 percent of infants' total DINP exposure from all evaluated sources. Staff does not know the extent to which manufacturers would return to using DINP in children's toys and child care articles if the interim prohibition were lifted. Staff is also unable to quantify the impact of increased DINP exposure on the percent of WORA or infants that have an HI less than or equal to one. However, staff notes that increased exposure will increase the MRDE risk to the population.
The CHAP also assessed the risks of DINP in isolation and found that the MOEs ranged from 830 to 1,500. CHAP report at pp. 95-99. As discussed previously, MOEs of at least 100 are adequate to protect public health. CPSC agrees with the CHAP's analysis that the MOEs for DINP in isolation, did not present a risk. However, DINP exposure has been increasing since the CHAP completed its analysis. Current analysis suggests that DINP MOEs, in isolation, (
The Commission proposed to expand the scope of the restriction on DINP's use so that the rule would prohibit all children's toys and child care articles containing DINP rather than only children's toys that can be placed in a child's mouth and child care articles. 79 FR at 78335. Likewise, the final rule prohibits all children's toys and child care articles containing concentrations of more than 0.1 percent of DINP. The
For purposes of this section a toy can be placed in a child's mouth if any part of the toy can actually be brought to the mouth and kept in the mouth by a child so that it can be sucked and chewed. If the children's product can only be licked, it is not regarded as able to be placed in the mouth. If a toy or part of a toy in one dimension is smaller than 5 centimeters, it can be placed in the mouth.
As noted in section IV.A, commenters presented numerous arguments questioning whether phthalates are antiandrogenic,
Although DINP is less potent than other antiandrogenic phthalates, DINP can contribute to the cumulative risk from other phthalates. DINP has similar effects as other antiandrogenic phthalates, and thus is considered antiandrogenic in the context of the cumulative risk assessment. CPSC concludes that because DINP causes phthalate syndrome, it was appropriate for the CHAP to include DINP in its cumulative risk assessment and for the Commission to prohibit children's toys and child care articles containing DINP.
As the commenter points out, in reality DINP would not replace all of the other phthalates because the differences in properties among the phthalates limit their use depending on the intended application. WORA with HQs greater than one were measured in each NHANES cycle despite the interim prohibition on children's toys that can be placed in a child's mouth and child care articles containing DINP. Any further increase in DINP exposure could increase the risk from DINP.
Commenters on the staff's analysis of more recent NHANES data asserted that CPSC staff's analysis clearly demonstrates that the interim prohibition involving DINP can be lifted while meeting the “reasonable certainty of no harm” standard set forth in the CPSIA because the NHANES 2013/2014 data show that cumulative risk for WORA continues to decline with the HI consistently below one for the 50th and 95th percentiles. (Comment 3.20).
The scenario-based exposure assessment included in the CHAP report shows that mouthing and dermal exposure to toys could contribute an average of 12.8 percent, 5.4 percent, and 1 percent of the overall DINP exposure to infants, toddlers, and children, respectively, if DINP were used in these products.
CPSC disagrees with the assertion that doubling the DINP exposure would not increase the risk substantially, and notes that currently, a certain proportion of actual WORA have a DINP HQ greater than one and a certain proportion of actual WORA have DINP HQs near one. Increasing exposure to DINP may increase the number of individuals with an HQ greater than one or may increase the HQs of individuals with an HQ greater than one. Furthermore, doubling DINP exposures would lower the MOE for DINP to 110 to 7000 (95th percentile). The CHAP noted that MOEs exceeding 100 to 1000 are typically “considered adequate for protecting public health.” CHAP report at p. 4. Current analysis suggests, therefore, that DINP MOEs, in isolation, (
The CHAP concluded that DNOP does not lead to male developmental reproductive toxicity in animals and, therefore, does not contribute to the cumulative risk. Although DNOP does cause other developmental (supernumerary ribs) and systemic effects (liver, thyroid, immune system, and kidney), the MOEs in humans are very high. Therefore, the CHAP recommended that the current prohibition involving DNOP be lifted. CHAP report at pp. 91-95. The NPR noted that DNOP levels in people are so low that they are not detectable in about 90 percent of humans, and that DNOP is not antiandrogenic, and, therefore, does not contribute to the cumulative risk. 79 FR 78334. Based on the CHAP report and staff's analysis, the Commission concludes that continuing the prohibition of children's toys that can be placed in a child's mouth and child care articles containing more than 0.1 percent of DNOP is not necessary to ensure a reasonable certainty of no harm to children, pregnant women, or other susceptible individuals with an adequate margin of safety.
The CHAP concluded that DIDP does not lead to male developmental reproductive toxicity in animals and, therefore, does not contribute to the cumulative risk. The CHAP considered the risk of DIDP in isolation and found that DIDP does cause other developmental (supernumerary ribs) and systemic effects (liver, and kidney). However, because the MOEs in humans are sufficiently high (range from 2,500 to 10,000 for median DIDP exposures and 586 to 3,300 for upper-bound exposures), the CHAP recommended that the interim prohibition involving DIDP be lifted. CHAP report at pp. 100-105. As noted in the NPR, DIDP exposure would need to increase by more than 250 times to exceed an acceptable level. 79 FR 78334. Based on the CHAP report and staff's analysis, the Commission concludes that continuing the prohibition of children's toys that can be placed in a child's mouth and child care articles containing more than 0.1 percent of DIDP is not necessary to ensure a reasonable certainty of no harm to children, pregnant women, or other susceptible individuals with an adequate margin of safety.
In the absence of a definition or other guidance on the meaning of the phrase “necessary to protect the health of children,” CPSC interprets the phrase in the context of the CHAP report and CPSC's chronic hazard guidelines,
The CHAP reviewed the potential health risks associated with eight phthalates that were not prohibited by the CPSIA, and it recommended that four additional phthalates (DIBP, DPENP, DHEXP, and DCHP) be prohibited from use in children's toys and child care articles. The CHAP found that these four phthalates are associated with adverse effects on male reproductive development and contribute to the cumulative risk from antiandrogenic phthalates. CPSC staff has reviewed the CHAP's assessment and agrees with the recommendation. Based on the CHAP's evaluation and the staff's assessment, the Commission proposed to prohibit children's toys and child care articles containing more than 0.1 percent of DIBP, DPENP, DHEXP, and/or DCHP. 79 FR 78335-78337. The Commission determines that prohibiting children's toys and child care articles that contain concentrations of more than 0.1 percent of DIBP, DPENP, DHEXP, and/or DCHP is necessary to protect the health of children and issues this final rule to establish this prohibition.
Although current exposures to these four phthalates are low, these phthalates could be used as substitutes for the phthalates subject to prohibition, thus increasing human exposures from MRDE phthalates. All of these four phthalates are capable of contributing to the cumulative risk. A 2014 study demonstrated that three of these four phthalates (DPENP, DHEXP, and DCHP) had much greater potency than DEHP which the CPSIA permanently prohibits from use in children's toys and child care articles.
The CHAP recommended prohibiting the use of diisobutyl phthalate (DIBP) in children's toys and child care articles. CHAP report at pp. 110-113. DIBP is associated with adverse effects on male reproductive development and contributes to the cumulative risk from antiandrogenic phthalates. Furthermore, as noted in the NPR, DIBP has been found in some toys and child care articles during compliance testing by CPSC. The CHAP estimated that DIBP contributes up to 5 percent of the cumulative risk in infants from all products and sources. CHAP report at Table 2.16. More recent biomonitoring data show that DIBP exposures and risks have increased by about 50%. TAB A of staff briefing package.
DIBP is similar in toxicity to DBP, which is one of the phthalates subject to the CPSIA's permanent prohibition. DIBP was shown to be antiandrogenic in numerous studies and it acts in concert with other antiandrogenic phthalates. The CHAP found that current exposures to DIBP are low. When considered in isolation, DIBP has a MOE of 3,600 or more. CHAP report at pp. 24, 110-111. DIBP contributes roughly 1 to 2 percent of the cumulative risk from phthalate exposure to pregnant women and 1 percent to 5 percent in infants. However, the CHAP based its recommendation on cumulative risk.
Based on evaluation of the CHAP report and staff's review, the Commission concludes that there is sufficient evidence to conclude that DIBP is antiandrogenic and contributes to the cumulative risk. The Commission also concludes that, applying the CPSC chronic hazard guidelines, this phthalate is considered “probably toxic” to humans based on sufficient evidence in animal studies. As discussed previously, the Commission considers that a HI less than or equal to one is necessary “to protect the health of children.” Using the most recent biomonitoring data, some WORA in the sample have an HI that exceeds one. For PEAA Case 1, three WORA had an HI greater than one; for PEAA Case 2, nine WORA had an HI greater than one; and for PEAA Case 3, two WORA had an HI greater than one. In addition, CPSC staff has identified DIBP in a small portion of toys and child care articles during routine compliance testing. Therefore, the rule prohibits children's toys and child care articles containing concentrations of more than 0.1 percent of DIBP. The Commission concludes that this action is necessary to protect the health of children because it would prevent current and future use of this antiandrogenic phthalate in children's toys and child care articles.
The CHAP recommended prohibiting the use of DPENP in children's toys and child care articles. CHAP report at pp. 112-113. DPENP is associated with adverse effects on male reproductive development and contributes to the cumulative risk from antiandrogenic phthalates. Furthermore, DPENP is the most potent of the antiandrogenic phthalates. Prohibiting the use of DPENP would prevent its use as a substitute for other banned phthalates. The Commission agrees with the CHAP's recommendation for DPENP. Based on the CHAP report and previous toxicity reviews by CPSC staff and a contractor,
The CHAP recommended prohibiting the use of DHEXP in children's toys and child care articles. CHAP report at pp. 114-116. DHEXP is associated with adverse effects on male reproductive development and may contribute to the cumulative risk from antiandrogenic phthalates. The Commission agrees with the CHAP's recommendation for DHEXP. Based on the CHAP report and previous review by CPSC staff and a contractor,
The CHAP recommended prohibiting the use of DCHP in children's toys and child care articles. CHAP report at pp. 116-118. DCHP is associated with adverse effects on male development and contributes to the cumulative risk from antiandrogenic phthalates.
The Commission agrees with the CHAP's recommendation for DCHP. Based on the CHAP report and previous reviews by CPSC staff and a contractor,
The scope of this rule covers children's toys and child care articles. The CPSIA authorizes the Commission to “declare any children's product containing any phthalates to be a banned hazardous product” if such action is necessary to protect the health of children. 15 U.S.C. 2057c(b)(3)(B). As explained in the NPR, the Commission is not expanding the rule to cover other children's products. 79 FR 78337-78338. Only limited data on exposure to phthalates from other children's products exist. The general information available does not support a determination that prohibiting any products other than children's toys and child care articles is necessary. Toys are more likely than many other children's products to be made of materials that could be plasticized with phthalates. Toys and child care articles are more likely than other children's products to provide a pathway of exposure to phthalates both through oral exposure (from direct contact with the mouth and indirect contact when children place their hands in their mouths) and dermal exposure. We received few comments in response to the NPR that addressed expansion of the scope of the regulation to all children's products.
The CHAP examined 14 phthalates: The three subject to the CPSIA's permanent prohibition, the three subject to the CPSIA's interim prohibition, and eight additional phthalates. Of the eight additional phthalates, the CHAP recommended that four be prohibited from use in children's toys and child care articles, that three (Dimethyl Phthalate (DMP), Diethyl Phthalate (DEP), Di(2-propylheptyl) Phthalate DPHP) be free of any restriction, and the one (Diisooctyl Phthalate (DIOP)) be subject to an interim prohibition. CHAP report at pp. 1118-119. As discussed in the NPR, DIOP has a chemical structure consistent with other antiandrogenic phthalates. However, the CHAP concluded that there is not sufficient evidence to support a permanent prohibition. 79 FR 78337. The CPSIA did not provide for an interim prohibition as an option for the Commission's rule under section 108, and as the CHAP explained, insufficient data exists to determine that a permanent prohibition of DIOP is necessary to protect the health of children. We received a few comments concerning phthalates that the CHAP assessed but are not covered by CPSC's rule.
For both the permanent and interim prohibitions, the CPSIA established a concentration limit of 0.1 percent. The CHAP stated:
When used as plasticizers for polyvinyl chloride (PVC), phthalates are typically used at levels greater than 10%. Thus, the 0.1% limit prohibits the intentional use of phthalates as plasticizers in children's toys and child care articles but allows trace amounts of phthalates that might be present unintentionally. There is no compelling reason to apply a different limit to other phthalates that might be added to the current list of phthalates permanently prohibited from use in children's toys and child care articles.
Other countries have restrictions concerning the use of various phthalates in children's toys and child care articles. The requirements vary, but the following countries have some regulatory restrictions on phthalates that can be used in children's toys and child care articles: The European Union (EU), Denmark, Canada, Japan, Australia, Brazil, Argentina, Taiwan, and Hong Kong. The requirements differ on the phthalates restricted and products covered. Unlike CPSC's rule, these restrictions are based on evaluations of phthalate exposures in isolation, not in combination with other phthalates. There is no international standard that establishes substantive requirements for phthalates in children's toys and child care articles. International Organization for Standardization (ISO) 8124-6:2014 specifies a method for testing toys and children's products to determine if they contain phthalates; it does not establish any content limits. We provide a summary of other countries' requirements concerning phthalates in children's toys and child care articles:
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• No restrictions concerning DIBP, DPENP, DHEXP, DCHP in children's toys and child care articles in other countries.
As this summary demonstrates, requirements concerning DINP in
The text of the final rule is the same as the proposed rule with one exception. For clarity, we have added language from section 108(c) of the CPSIA (as amended by Pub. L. 112-28) regarding the application of the rule. This addition does not change the substance of the rule because the statutory provision applies regardless of whether it is stated in the rule. Section 108(c) of the CPSIA states that the permanent and interim phthalate prohibitions, and any phthalates rule the Commission issues under section 108(b)(3) of the CPSIA, “shall apply to any plasticized component part of a children's toy or child care article or any other component part of a children's toy or child care article that is made of other materials that may contain phthalates.” 15 U.S.C. 2057c(c).
The Commission received comments on various aspects of the substance of the proposed rule. These comments and responses to them are summarized throughout this document. More detailed comment summaries and responses are at Tab B of staff's briefing package.
Section 1307.1 describes the actions that the rule prohibits. This provision tracks the language in section 108(a) of the CPSIA regarding the permanent prohibition and prohibits the same activities: Manufacture for sale, offer for sale, distribution in commerce, or importation into the United States of a children's toy or child care article that contains any of the prohibited phthalates.
Section 1307.2 provides the same definitions of “children's toy” and “child care article” found in section 108(g) of the CPSIA. “Children's toy” means a consumer product designed or intended by the manufacturer for a child 12 years of age or younger for use by the child when the child plays. “Child care article” means a consumer product designed or intended by the manufacturer to facilitate sleep or the feeding of children age 3 and younger, or to help such children with sucking or teething. Although these definitions are stated in the CPSIA, the rule text restates them for convenience. We did not receive comments on these definitions, which re-state statutory definitions.
Section 1307.3(a) states the products the rule prohibits. For convenience, this section provides both the items that are subject to the CPSIA's existing permanent prohibition and the items that are subject to prohibition under the rule. Stating all prohibitions in this section will allow a reader of the CFR to be aware of all the CPSC's restrictions concerning phthalates, both statutory and regulatory.
Paragraph (a) sets out the CPSIA's existing permanent prohibition which makes it unlawful to manufacture for sale, offer for sale, distribute in commerce, or import into the United States any children's toy or child care article that contains concentrations of more than 0.1 percent of DEHP, DBP, or BBP. The restriction on these products was established by section 108(a) of the CPSIA. This statutory prohibition is not affected by the rule, but is merely restated in the regulatory text.
Paragraph (b) prohibits the manufacture for sale, offer for sale, distribution in commerce, or importation into the United States of any children's toy or child care article that contains concentrations of more than 0.1 percent of DINP, DIBP, DPENP, DHEXP, and DCHP. As explained above, in accordance with section 108(b)(2) of the CPSIA, the Commission appointed a CHAP that considered the effects on children's health of phthalates and phthalate alternatives as used in children's toys and child care articles and presented the Commission with a report of its findings and recommendations. After reviewing the CHAP's report, the most recent exposure data, and public comments, the Commission is finalizing this rule in accordance with section 108(b)(3) of the CPSIA.
For the reasons explained in this preamble, the Commission concludes that prohibiting children's toys and child care articles that contain concentrations of more than 0.1 percent of DINP would ensure a reasonable certainty of no harm to children, pregnant women, or other susceptible individuals with an adequate margin of safety. DINP is currently subject to the CPSIA's interim prohibition. 15 U.S.C. 2057c(b)(1). Section 1307.3(b) changes the scope of regulation of DINP from the current interim scope of “any children's toy that can be placed in a child's mouth”
Additionally, § 1307.3(b) prohibits children's toys and child care articles
The final rule adds paragraph (c) to § 1307.3 to clarify the application of the rule. Section 108(c), as amended by Public Law 112-28 (August 12, 2011), addresses the application of the Commission's phthalates rule. For convenience and clarity, we are restating that statutory provision in § 1307.3 (c).
The APA generally requires that the effective date of a rule be at least 30 days after publication of the final rule. 5 U.S.C. 553(d). The Commission proposed an effective date of 180 days after publication of the final rule in the
The Regulatory Flexibility Act (RFA) requires an agency to prepare a regulatory flexibility analysis for any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rulemaking will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 603 and 605. Small entities include small businesses, small organizations, and small governmental jurisdictions. The Commission certified in the NPR that this rule will not have a significant impact on a substantial number of small entities pursuant to section 605(b) of the RFA, 5 U.S.C. 605(b) in the NPR. 79 FR 78324, 78339-41. Some comments expressed general concerns about the economic impact of the proposed rule, but none provided information or evidence that the rule would have a significant impact on a substantial number of small entities. Summaries of these comments and CPSC's responses are provided below. More detailed summaries and responses are in Tab B of the staff's briefing package. None of the comments received by the Commission changes the basis for the certification, nor has Commission staff received any other information that would require a change or revision the Commission's previous analysis of the impact of the rule on small entities. Therefore, the certification of no significant impact on a substantial number of small entities is still appropriate.
As explained in greater detail in the NPR, the certification is based on CPSC's determination that:
(1) Few, if any, manufacturers would need to alter their formulations to comply with the rule because:
• Children's toys that can be placed in a child's mouth and child care articles containing DINP have been prohibited since 2009. Thus, no manufacturer would have to reformulate any products in these categories.
• Only children's toys that cannot be placed in a child's mouth (no dimension of the toy is less than 5 cm) containing DINP would have to be reformulated. Thus, only a small subset of children's toys that cannot be placed in a child's mouth would be affected by the rule.
• DIBP, DPENP, DHEXP, and DCHP are not widely used in children's toys and child care articles. Therefore, relatively few manufacturers would have to reformulate products to eliminate these phthalates due to the rule.
(2) The rule would have a small marginal impact on the cost of third party testing because:
• All children's toys and child care articles are already subject to third party testing for DEHP, DBP, and BBP.
• Currently, children's toys that can be placed in a child's mouth and child care articles must also be tested for the presence of DINP.
• Laboratory equipment and methods are already in place for testing the prohibited phthalates, therefore the additional cost of testing for DIBP,
• Identification and quantification protocols for prohibited phthalates would need minimal modification to include DIBP, DPENP, DHEXP, and DCHP because each of these phthalates can be isolated at unique elution times by gas chromatography. Thus, the additional cost of analysis would be very low.
• The additional cost of laboratory materials would be very low. Chemical standards for testing would be required for the four additional phthalates, but the standards for DNOP and DIDP would no longer be required. Therefore, the number of chemical standards needed would increase by two which CPSC expects would increase the cost of third party testing for phthalates by less than 35 cents per test, which is relatively small compared to current cost of phthalate testing (approximately $300 per product or component part).
The CPSA establishes certain requirements for product certification and testing. Children's products subject to a children's product safety rule under the CPSA must be certified as complying with all applicable CPSC-enforced requirements. 15 U.S.C. 2063(a). Certification of children's products subject to a children's product safety rule must be based on testing conducted by a CPSC-accepted third party conformity assessment body.
The final rule does not include any information collection requirements. Accordingly, this rule is not subject to the Paperwork Reduction Act, 44 U.S.C. 3501-3520.
Section 26(a) of the CPSA, 15 U.S.C. 2075(a), provides that where a “consumer product safety standard under [the Consumer Product Safety Act (CPSA)]” is in effect and applies to a product, no state or political subdivision of a state may either establish or continue in effect a requirement dealing with the same risk of injury unless the state requirement is identical to the federal standard. (Section 26(c) of the CPSA also provides that states or political subdivisions of states may apply to the Commission for an exemption from this preemption under certain circumstances.) Section 108(f) of the CPSIA is entitled “Treatment as Consumer Product Safety Standards; Effect on State Laws.” That provision states that the permanent and interim prohibitions and any rule promulgated under section 108(b)(3) “shall be considered consumer product safety standards under the Consumer Product Safety Act.” That section further states: “Nothing in this section of the Consumer Product Safety Act (15 U.S.C. 2051
The Commission's regulations provide a categorical exclusion for the Commission's rules from any requirement to prepare an environmental assessment or an environmental impact statement because they “have little or no potential for affecting the human environment.” 16 CFR 1021.5(c)(2). Because this rule falls within the categorical exclusion, no environmental assessment or environmental impact statement is required.
This section provides a list of the documents referenced in this preamble and in the staff's briefing package.
Consumer protection, Imports, Infants and children, Law enforcement, Toys.
Sec. 108, Pub. L. 110-314, 122 Stat. 3016 (August 14, 2008); Pub. L. 112-28, 125 Stat. 273 (August 12, 2011).
This part prohibits the manufacture for sale, offer for sale, distribution in commerce or importation into the United States of any children's toy or child care article containing any of the phthalates specified in § 1307.3.
The definitions of the Consumer Product Safety Act (CPSA) (15 U.S.C. 2052(a)) and the Consumer Product Safety Improvement Act of 2008 (CPSIA) (Pub. L. 110-314, sec. 108(g)) apply to this part. Specifically, as defined in the CPSIA:
(a)
(b)
(a) As provided in section 108(a) of the CPSIA, the manufacture for sale, offer for sale, distribution in commerce, or importation into the United States of any children's toy or child care article that contains concentrations of more than 0.1 percent of di-(2-ethyhexyl) phthalate (DEHP), dibutyl phthalate (DBP), or benzyl butyl phthalate (BBP) is prohibited.
(b) In accordance with section 108(b)(3) of the CPSIA, the manufacture for sale, offer for sale, distribution in commerce, or importation into the United States of any children's toy or child care article that contains concentrations of more than 0.1 percent of diisononyl phthalate (DINP), diisobutyl phthalate (DIBP), di-
(c) In accordance with section 108(c) of the CPSIA, the restrictions stated in paragraphs (a) and (b) of this section apply to any plasticized component part of a children's toy or child care article or any other component part of a children's toy or child care article that is made of other materials that may contain phthalates.
Office of the Comptroller of the Currency, Treasury; the Board of Governors of the Federal Reserve System; and the Federal Deposit Insurance Corporation.
Notice of proposed rulemaking.
In March 2017, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) submitted a report to Congress pursuant to the Economic Growth and Regulatory Paperwork Reduction Act of 1996, in which they committed to meaningfully reduce regulatory burden, especially on community banking organizations. Consistent with that commitment, the agencies are inviting public comment on a notice of proposed rulemaking that would simplify compliance with certain aspects of the capital rule. A majority of the proposed simplifications would apply solely to banking organizations that are not subject to the advanced approaches capital rule (non-advanced approaches banking organizations). Specifically, the agencies are proposing that non-advanced approaches banking organizations apply a simpler regulatory capital treatment for: Mortgage servicing assets; certain deferred tax assets arising from temporary differences; investments in the capital of unconsolidated financial institutions; and capital issued by a consolidated subsidiary of a banking organization and held by third parties (minority interest). More generally, the proposal also includes revisions to the treatment of certain acquisition, development, or construction exposures that are designed to address comments regarding the current definition of high volatility commercial real estate exposure under the capital rule's standardized approach. Under the standardized approach, the proposed revisions to the treatment of acquisition, development, or construction exposures would not apply to existing exposures that are outstanding or committed prior to any final rule's effective date.
In addition to the proposed simplifications, the agencies also are proposing various additional clarifications and technical amendments to the agencies' capital rule, which would apply to both non-advanced approaches banking organizations and advanced approaches banking organizations.
Comments must be received by December 26, 2017.
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The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) are issuing this notice of proposed rulemaking (proposal or proposed rule) with the goal of reducing regulatory compliance burden, particularly on community banking organizations, by simplifying certain aspects of the agencies' rules revising their risk-based and leverage capital requirements (capital rule).
In 2013, the agencies adopted the capital rule to address weaknesses that became apparent during the financial crisis of 2007-08. Principally, the capital rule strengthened the capital requirements applicable to banking organizations
The capital rule provides two methodologies for determining risk-weighted assets: (i) The standardized approach and (ii) the advanced approaches, which include both the internal ratings-based approach and the advanced measurement approach (the
The agencies have received numerous questions regarding various aspects of the capital rule since its adoption in 2013. In addition, in connection with the agencies' review under the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA),
In particular, the agencies indicated in the 2017 EGRPRA report that they would develop a proposed rule to simplify the capital rule by considering amendments to (i) replace the standardized approach's treatment of high volatility commercial real estate (HVCRE) exposures with a simpler treatment for most acquisition, development, or construction exposures; and, for non-advanced approaches banking organizations, to (ii) simplify the current regulatory capital treatment for mortgage servicing assets (MSAs), deferred tax assets (DTAs) arising from temporary differences that an institution could not realize through net operating loss carrybacks (temporary difference DTAs), and investments in the capital of unconsolidated financial institutions; and (iii) simplify the calculation for the amount of capital that can count toward regulatory requirements in cases in which a banking organization's consolidated subsidiary has issued capital that is held by third parties (minority interest).
Consistent with the 2017 EGRPRA report, the agencies are proposing a number of modifications to the capital rule that are aimed at reducing regulatory burden. First, the agencies are proposing to replace the existing HVCRE exposure category as applied in the standardized approach with a newly defined exposure category called high volatility acquisition, development, or construction (HVADC) exposure. The proposed HVADC exposure definition is intended to be substantially simpler to implement as it removes the most complex exclusion contained in the current HVCRE exposure definition. In addition, the proposed rule simplifies and clarifies certain exemptions, and clarifies the scope of exposures captured by the HVADC exposure definition. While some of the simplifications and clarifications may increase the scope and others may decrease it, in the aggregate, it is likely that more acquisition, development, or construction loans would be captured under the proposed HVADC exposure definition than under the current HVCRE exposure definition. Accordingly, the agencies are proposing to apply a lower risk weight to the proposed HVADC exposure category. The proposed risk weight for HVADC exposures would be 130 percent, a reduction from the 150 percent risk weight that currently applies to HVCRE exposures under the capital rule's standardized approach. The new HVADC exposure definition would only apply to exposures originated on or after the final rule's effective date. As described further below, the proposed rule would not revise the treatment of HVCRE exposures for purposes of calculating the amount of capital required under the advanced approaches. However, for purposes of calculating their capital requirements going forward under the standardized approach, advanced approaches banking organizations would use the proposed HVADC exposure category.
Second, the agencies are proposing to simplify the current regulatory capital treatment of MSAs, temporary difference DTAs, and investments in the capital of unconsolidated financial institutions for non-advanced approaches banking organizations. As explained further below, for these banking organizations, the proposal would eliminate (i) the capital rule's 10 percent common equity tier 1 capital deduction threshold that applies individually to MSAs, temporary difference DTAs, and significant investments in the capital of unconsolidated financial institutions in the form of common stock; (ii) the aggregate 15 percent common equity tier 1 capital deduction threshold that subsequently applies on a collective basis across such items; (iii) the 10 percent common equity tier 1 capital deduction threshold for non-significant investments in the capital of unconsolidated financial institutions; and (iv) the deduction treatment for significant investments in the capital of unconsolidated financial institutions not in the form of common stock.
Instead of imposing these complex treatments for MSAs, temporary difference DTAs, and investments in the capital of unconsolidated financial institutions, the proposal would require that non-advanced approaches banking organizations deduct from common equity tier 1 capital any amount of MSAs, temporary difference DTAs, and investments in the capital of unconsolidated financial institutions that individually exceeds 25 percent of common equity tier 1 capital (the 25 percent common equity tier 1 capital deduction threshold). Consistent with the capital rule, under the proposal, a banking organization would continue to
Third, the agencies are proposing a significantly simpler methodology for non-advanced approaches banking organizations to calculate minority interest limitations.
The agencies anticipate that the simplifications described above would lead to a reduction of regulatory reporting burden for non-advanced approaches banking organizations. Following the publication of this proposed rule, the agencies would propose for public comment corresponding changes to regulatory reporting forms and instructions.
The proposed rule would also make certain technical changes to the capital rule, including some changes to the advanced approaches rule, such as clarifying revisions, updating cross-references, and correcting typographical errors.
In August 2017, in anticipation of this proposal, the agencies invited public comment on a proposed rule to extend the capital rule's transitional provisions for MSAs, temporary difference DTAs, and investments in the capital of consolidated financial institutions and certain minority interest requirements (transitions NPR).
The capital rule currently defines an HVCRE exposure as any credit facility that, prior to conversion to permanent financing, finances or has financed the acquisition, development, or construction of real property, unless the facility finances one- to four-family residential properties, certain agricultural or community development exposures, or commercial real estate projects where the borrower meets certain contributed capital requirements and other prudential criteria. In the preamble to the capital rule, the agencies noted that their supervisory experience had demonstrated that these exposures, compared to other commercial real estate exposures, presented heightened risks for which banking organizations should hold additional capital, and accordingly adopted a 150 percent risk weight for HVCRE exposures under the standardized approach.
Since the adoption of the capital rule, the agencies have received numerous questions regarding various aspects of the HVCRE exposure definition. Community banking organizations, in particular, have asserted that the definition is unclear, overly complex, burdensome to implement, and not applied consistently across banking organizations. For example, banking organizations submitted comments and questions to the agencies regarding the treatment of multi-purpose loan facilities under the HVCRE exposure definition, including loans used to finance both the purchase of equipment and the acquisition, development, or construction of real property. Banking organizations also asked for clarification regarding the various exemptions from the HVCRE exposure definition, including the exemptions for (i) one- to four-family residential properties, (ii) community development exposures, and (iii) exposures where borrowers met the contributed capital requirements (as discussed in more detail in section II.A.3.a. below).
After evaluating the comments and questions from the industry following the publication of the capital rule, as well as the feedback from the public received during the review process leading to the 2017 EGRPRA report, the agencies are proposing to amend the treatment in the standardized approach for credit facilities that finance acquisition, development, or construction activities, with the goal of simplifying the treatment of these exposures. The agencies are proposing to replace the HVCRE exposure category as applied in the standardized approach with a newly defined exposure category termed HVADC exposure that would apply to credit facilities that finance acquisition, development, or construction activities. As compared to the HVCRE exposure definition, the proposed HVADC exposure definition would not include the contributed capital exemption. Additionally, the proposed definition of HVADC exposure provides greater clarity on which acquisition, development, or construction exposures have relatively more risk and merit a higher risk weight than the current definition of HVCRE exposure by including a “primarily finances” test. The HVADC exposure definition also includes a definition of “permanent loan” to clearly articulate when an exposure ceases being an HVADC exposure under the propose rule. Both the “primarily finances” test and the definition of “permanent loan” are explained in more detail below. With the introduction of a “primarily finances” test and “permanent loan” definition, the scope of included or excluded exposures under the proposed HVADC exposure definition will likely be different from those captured under the current HVCRE exposure definition and will vary across individual banking organizations. In total, the agencies believe that the simpler HVADC exposure definition likely would capture more acquisition, development, or construction exposures than are currently captured by the definition of
Under the proposed rule, an HVADC exposure would receive a 130 percent risk weight as opposed to the 150 percent risk weight assigned to HVCRE exposures under the existing standardized approach. The proposed rule would require higher risk weights for certain acquisition, development, or construction exposures and lower risk weights for others. Additionally, to mitigate the potential burden on banking organizations of having to re-evaluate all of their acquisition, development, or construction exposures against the new HVADC exposure definition, the proposal, under the standardized approach, would contain a grandfathering provision to retain the capital rule's treatment for acquisition, development, or construction exposures outstanding or committed as of the effective date of any final rule (as discussed in more detail in section II(A)(5)). The proposed revisions to the standardized approach are intended to be responsive to concerns about the difficulties of implementing the HVCRE exposure definition, while maintaining capital requirements commensurate with the risk profiles of different credit facilities that finance acquisition, development, or construction activities.
Under the proposed rule, the capital rule would define an HVADC exposure as a credit facility that
For example, assume a borrower intends to use part of an $8 million loan to acquire and develop a tract of land for a real estate project. Of the $8 million total, $4.5 million will be disbursed for acquisition, development, or construction purposes (
Banking organizations have expressed concern regarding the contributed capital exemption under which exposures are not considered HVCRE exposures if (i) at the origination of the loan, the loan-to-value (LTV) ratio is less than or equal to the relevant supervisory LTV ratio standard;
After considering comments from banking organizations regarding both the complexity of the contributed capital exemption, as well as the potential inconsistent application of the exemption that results, the agencies are proposing to not include a contributed capital exemption within the HVADC exposure definition. The agencies considered various means to clarify or modify the contributed capital exemption in a manner consistent with the goals of simplifying the capital rule. However, the agencies view the alternative approaches that retain the contributed capital exemption as comparably complex and inconsistent with the goal of simplifying the capital rule.
The proposed definition of an HVADC exposure would exempt credit facilities that finance the acquisition, development, or construction of one- to four-family residential properties, similar to the exemption in the HVCRE exposure definition. For purposes of both HVADC and HVCRE exposures, the financing of one- to four-family residential properties would include both loans to construct one- to four-family residential structures and loans that combine the land acquisition, development, or construction of one- to four-family structures, either with or without a sales contract, including lot development loans. Therefore, credit facilities financing the construction of one- to four-family residential structures for which no buyer has been identified would be included in the exemption for one- to four-family residential properties.
In response to questions about whether the term “residential properties” for these purposes includes the acquisition, development, or construction of condominiums or cooperatives, the agencies are clarifying that, generally, a loan that finances the acquisition, development, or construction of condominiums and cooperatives would not qualify for the one- to four-family residential properties exemption, except in the instance where the project contains fewer than five individual dwelling units. Thus, condominiums, cooperatives, and apartment buildings would generally be treated as multifamily properties and would not qualify for the one- to four-family residential properties exemption. If each unit in a project is separated from other units by a dividing wall that extends from ground to roof (
The HVCRE exposure definition exempts community development projects.
The proposed HVADC exposure definition would exclude credit facilities that finance the purchase or development of agricultural land and would not substantively modify the current exemption for agricultural land development set forth in the current HVCRE exposure definition.
The proposed HVADC exposure definition would exclude an exposure that is considered to be a permanent loan. In response to banking organizations' requests for clarification of the term “permanent financing” as it is used in the current HVCRE exposure definition, the proposed HVADC exposure definition includes a definition of “permanent loan.” A permanent loan for purposes of the proposed HVADC exposure definition would mean a prudently underwritten loan
For many acquisition, development, or construction projects, the source of repayment will be derived from the property once the project is completed and tenants begin paying rent or the property otherwise begins to produce income. Additionally, the agencies recognize that for loans financing owner-occupied acquisition, development, or construction projects, the owner may have sufficient capacity at origination to repay the loan from ongoing operations, without relying on proceeds from the sale or lease of the
The agencies are also clarifying that bridge loans generally would not qualify as permanent loans as the property is not generating sufficient revenue to make amortizing principal and interest payments. The agencies believe financing for bridge loans poses greater credit risk than permanent loans, and, therefore, should be subject to a higher risk weight.
Finally, even if a credit facility does not meet the definition of a permanent loan at origination, it could subsequently meet the definition as the property generates additional revenue sufficient to service amortizing principal and interest payments. In such a case, the facility may become exempt from the HVADC exposure category, provided the loan was prudently underwritten at origination.
Currently, under the standardized approach, an HVCRE exposure receives a 150 percent risk weight. Under the proposed rule, an HVADC exposure would receive a 130 percent risk weight. The agencies believe the reduced risk weight for HVADC exposures is appropriate in recognition of the potentially broader scope of the definition, and that this change would not result in a significant change in the aggregate minimum capital required under the capital rule. Specifically, by including exposures regardless of the amount of the borrower's contributed equity, some exposures that would be included in the HVADC exposure category may, while remaining riskier than other commercial real estate loans, have risk-reducing qualities, such as lower LTV ratios and higher borrower-contributed capital relative to exposures currently in the HVCRE exposures category.
However, to mitigate the potential burden on banking organizations of having to re-evaluate all of their acquisition, development, or construction exposures against the new HVADC exposure definition, the proposal, under the standardized approach, would contain a grandfathering provision for outstanding acquisition, development, or construction exposures. The proposal, under the standardized approach, would retain the capital rule's HVCRE exposure definition and exposure category treatment for all outstanding acquisition, development, or construction exposures as of the effective date of any final rule. Only new acquisition, development, or construction exposures originated on or after the effective date of a final rule would need to be evaluated against the new HVADC exposure definition. Therefore, a banking organization would maintain an exposure's risk weight as determined prior to the effective date of a final rule under the HVCRE exposure definition. For example, if an outstanding acquisition, development, or construction exposure is classified as an HVCRE exposure under the capital rule, then the exposure would continue to have a 150 percent risk weight until the exposure is converted to permanent financing or is sold or paid in full. For the purposes of this grandfathering provision, permanent financing refers to the existing HVCRE exposure definition, which relies on a banking organization's underwriting criteria for long-term mortgage loans. If an outstanding acquisition, development, or construction exposure is exempt from the HVCRE exposure category under the capital rule, then the exposure would continue to receive its applicable risk weight under the capital rule (
Based upon data reported on the Consolidated Financial Statements for Holding Companies (FR Y-9C) and on Call Reports for insured depository institutions as of June 30, 2017, approximately 80 percent of banking organizations report holdings of acquisition, development, or construction exposures, excluding one- to four-family residential properties, and approximately 40 percent of banking organizations report some holdings of HVCRE exposures risk weighted at 150 percent. As highlighted above, the proposed treatment may result in a 130 percent risk weight for certain future exposures that would have received either a 100 or a 150 percent risk weight under the capital rule's treatment. It may also result in certain loans that would have received a 150 percent risk weight under the current rule receiving a 100 percent risk weight under the proposed rule. At the individual banking organization level, a banking organization currently with a higher proportion of HVCRE exposures relative to its total acquisition, development, or construction exposures may see a decrease in its capital requirements on new acquisition, development, or construction loans going forward. Conversely, a banking organization that currently has a higher proportion of acquisition, development, or construction exposures deemed to be excluded from the HVCRE exposure definition may see an increase in its capital requirements on new acquisition, development, or construction loans to the extent those exposures do not otherwise qualify for the exemptions under the proposed HVADC exposure definition going forward. Because of the lack of granular data on acquisition, development, or construction loans in the regulatory reports and since agencies cannot predict how banking organizations may structure such exposures in the future, the agencies cannot estimate with precision the future impact of the proposed HVADC exposure definition at an individual banking organization level. The agencies further note that the proposed grandfathering provision, which may lessen regulatory compliance burden by preventing banking organizations from having to re-evaluate their existing acquisition, development, or construction exposures under the new HVADC exposure definition, also would limit the potential impact of the treatment of acquisition, development, or construction exposures under the proposed HVADC exposures definition on banking organizations' regulatory capital.
Although the agencies anticipate that the proposed rule may lead to the assignment of higher risk weights to certain acquisition, development, or construction exposures going forward, the agencies believe that the simplified definition for HVADC exposures may lead to a reduced regulatory compliance burden in classifying acquisition, development, or construction exposures. The agencies also expect that the revised definition would result in increased consistency in the treatment of acquisition, development, or construction exposures. The agencies
As noted above, the agencies are not proposing to make substantive revisions to the advanced approaches as part of this rulemaking. The proposed introduction of the HVADC exposure category would apply only to the calculation of risk-weighted assets under the standardized approach.
The HVCRE exposure category was introduced in the standardized approach as part of the revisions to the capital rule to address the agencies' concern that such exposures had been insufficiently capitalized prior to and during the financial crisis of 2007-2008. Banking organizations have commented on and raised concerns about this exposure category and its corresponding 150 percent risk weight in the standardized approach since its introduction, and specifically during the 2017 EGRPRA process. Because concerns expressed by banking organizations regarding the HVCRE exposure definition emanated primarily from its implementation in the standardized approach, the agencies do not believe it is necessary to make corresponding changes to the definition in the advanced approaches. The advanced approaches do not rely on a single risk weight for HVCRE exposure, instead requiring banking organizations to categorize and assign risk parameters to these exposures, as well as subject them to higher capital requirements through an asset value correlation factor. Thus, treatment of this exposure category in the advanced approaches diverges substantially from its treatment in the standardized approach, and the agencies are not proposing to replace the existing HVCRE exposure definition under the advanced approaches. Accordingly, advanced approaches banking organizations would continue to use the HVCRE exposure definition to calculate their advanced approaches risk-weighted assets, while using the HVADC exposure definition for the purpose of calculating their risk-weighted assets under the standardized approach.
The agencies have previously issued FAQs to provide clarity on the existing HVCRE exposure definition. If the agencies adopt the proposal as final, they will consider whether to revise or rescind some or all of the HVCRE exposure-related FAQs. As the agencies are considering comments received on this proposal, the agencies would consider whether to issue any updated guidance related to the HVCRE exposure definition as it pertains to its use in the advanced approaches.
The capital rule currently requires that a banking organization deduct from common equity tier 1 capital the amounts of MSAs, temporary difference DTAs, and significant investments in the capital of unconsolidated financial institutions in the form of common stock that individually exceed 10 percent of the banking organization's common equity tier 1 capital.
The capital rule further requires deductions from regulatory capital if a banking organization holds (i) non-significant investments in the capital of an unconsolidated financial institution above a certain threshold
As highlighted in numerous questions and comments received by the agencies through both the EGRPRA process and their respective supervisory processes, community banking organizations have indicated that they find the deduction approach for MSAs, temporary difference DTAs, and investments in the capital of unconsolidated financial institutions to be complex and burdensome. In addition, two banking organization commenters asserted in the public comment period for the EGRPRA process that the revisions to the treatment of MSAs in the capital rule were unduly restrictive for community banks.
The agencies are proposing changes applicable to MSAs, temporary difference DTAs, and investments in the capital of unconsolidated financial institutions to simplify their treatment while at the same time ensuring an appropriate regulatory capital treatment to address safety and soundness concerns. Specifically, and consistent with the agencies' statements in the 2017 EGRPRA report, the proposed rule would, for non-advanced approaches banking organizations, replace the capital rule's individual 10 percent common equity tier 1 capital deduction thresholds for MSAs, temporary difference DTAs, and significant investments in the capital of unconsolidated financial institutions in the form of common stock and eliminate the aggregate 15 percent common equity tier 1 capital deduction threshold for such items. The proposal would require that a non-advanced approaches banking organization deduct from common equity tier 1 capital any amounts of MSAs, temporary difference DTAs, and investments in the capital of unconsolidated financial institutions that, individually, exceed 25 percent of the banking organization's common equity tier 1 capital (after certain deductions and adjustments) (the 25 percent common equity tier 1 capital deduction threshold). The agencies believe that this change would appropriately balance risk-sensitivity and complexity for non-advanced approaches banking organizations. The imposition of the 25 percent common equity tier 1 capital deduction threshold is expected to avoid, in a simple manner, unsafe and unsound concentration levels of MSAs, temporary difference DTAs, and investments in the capital of unconsolidated financial institutions.
Although the agencies expect that the proposed simplifications for the treatment of MSAs, temporary difference DTAs, and investments in the capital of unconsolidated financial institutions would reduce regulatory compliance burden, the agencies do not expect a significant impact on the capital ratios for most non-advanced approaches banking organizations as a result of these simplifications. Those non-advanced approaches banking organizations with relatively substantial holdings of MSAs or temporary difference DTAs could, however, experience a regulatory capital benefit as a result of the proposed simplifications.
In addition to the proposed 25 percent common equity tier 1 capital deduction threshold, any amounts of MSAs or temporary difference DTAs that are not deducted would be risk weighted at 250 percent, consistent with the capital rule. The agencies note that some banking organizations suggested in the public comments associated with the revisions to the capital rule that the deductions for MSAs and temporary difference DTAs were unnecessarily burdensome, and urged the agencies to eliminate the requirements altogether and revert to the treatment for these items under the capital framework that was applicable before 2013. Additionally, through the EGRPRA comment process, two commenters suggested raising the deduction threshold for MSAs from 10 percent to 100 percent of common equity tier 1 capital.
The agencies have long limited the inclusion of intangible and higher-risk assets in regulatory capital due to the relatively high level of uncertainty regarding the ability of banking organizations to realize value from these assets, especially under adverse financial conditions. The agencies believe that it is therefore important to retain regulatory capital restrictions for MSAs and temporary difference DTAs. Temporary difference DTAs are assets from which banking organizations may not be able to realize value, especially under adverse financial conditions. A banking organization's ability to realize its temporary difference DTAs is dependent on future taxable income; thus, the proposed limitation would continue to protect against the possibility that the banking organization would need to establish or increase valuation allowances for DTAs during periods of financial stress. In the case of MSAs, the proposed treatment for MSAs would continue to protect banking organizations from sudden fluctuations in the value of MSAs and from the potential inability of such banking organizations to quickly divest of MSAs at their full estimated value during periods of financial stress.
Under section 475 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) (12 U.S.C. 1828 note), the amount of readily marketable purchased mortgage servicing assets (PMSAs) that an insured depository institution may include in regulatory capital cannot be more than 90 percent of the PMSAs' fair value. Section 475 of FDICIA provides the agencies with the authority to remove the 90 percent limitation on PMSAs, subject to a joint determination by the agencies that its removal would not have an adverse effect on the deposit insurance fund or the safety and soundness of insured depository institutions. The agencies determined that the treatment of MSAs (including PMSAs) under the capital rule was consistent with a determination that the 90 percent limitation could be removed because the treatment under the capital rule (that is, applying a 250 percent risk weight to any non-deducted MSAs) was more conservative than the FDICIA fair value limitation and a 100 percent risk weight, which was the risk weight applied to MSAs under the regulatory capital framework prior to 2013.
As mentioned above, the proposal would impose the 25 percent common equity tier 1 capital deduction threshold on investments in the capital of unconsolidated financial institutions. A banking organization would make any required deduction under the corresponding deduction approach. This proposed treatment removes, for non-advanced approaches banking organizations, the distinctions among different categories of investments in the capital of unconsolidated financial institutions in the capital rule (namely non-significant investments in the capital of unconsolidated financial institutions, significant investment in the capital of unconsolidated financial institutions that are in the form of common stock, and significant investments in the capital of unconsolidated financial institutions that are not in the form of common stock). In order to avoid added complexity and regulatory burden, the agencies are not proposing a specific methodology dictating which specific investments a non-advanced approaches banking organization must deduct and which it must risk weight in cases where the firm is exceeding the 25 percent common equity tier 1 capital deduction threshold for investments in the capital of unconsolidated financial institutions. The agencies believe that they can address any safety and soundness concerns that arise from this flexible treatment through the supervisory process. The agencies believe the proposed treatment for investments in the capital of unconsolidated financial institutions would reduce complexity while maintaining appropriate incentives to reduce interconnectedness among banking organizations.
Under the proposed rule, non-advanced approaches banking organizations would be required to risk weight any investments in the capital of unconsolidated financial institutions that are not deducted according to the relevant treatment for the exposure category of the investment. For example, the appropriate risk weight for equity exposures would generally be either 300 or 400 percent, depending on whether the equity exposures are publicly traded, unless such exposures are assigned a preferential risk weight of 100 percent, as described below.
The capital rule allows banking organizations to apply a preferential risk weight of 100 percent to the aggregated adjusted carrying value of equity exposures that do not exceed 10 percent of a banking organization's total capital (non-significant equity exposures). The application of this risk weight (i) requires a banking organization to follow an enumerated process for calculating adjusted carrying value and (ii) mandates the equity exposures that must be included first in determining whether the threshold has been reached. The capital rule currently excludes significant investments in the capital of unconsolidated financial institutions in the form of common stock from being eligible for a 100 percent risk weight. The proposal would eliminate this exclusion for non-advanced approaches banking organizations.
Advanced approaches banking organizations would continue to apply the capital rule's current treatment for MSAs, temporary difference DTAs, and investments in the capital of unconsolidated financial institutions.
The capital rule limits the amount of capital issued by consolidated subsidiaries and not owned by the parent banking organization (minority interest) that a banking organization may include in regulatory capital. For example, tier 1 minority interest is created when a consolidated subsidiary of the banking organization issues tier 1 capital to third parties. Given that minority interest is generally not available to absorb losses at the banking organization's consolidated level, the agencies strongly believe that inclusion of minority interest in a banking organization's regulatory capital should be limited. The restrictions in the
Under the proposal, the agencies would replace for non-advanced approaches banking organizations the existing calculations limiting the inclusion of minority interest in regulatory capital with a simpler calculation. Specifically, the proposed rule would allow non-advanced approaches banking organizations to include: (i) Common equity tier 1 minority interest up to 10 percent of the parent banking organization's common equity tier 1 capital; (ii) tier 1 minority interest up to 10 percent of the parent banking organization's tier 1 capital; and (iii) total capital minority interest up to 10 percent of the parent banking organization's total capital. In each case, the parent banking organization's regulatory capital for purposes of these limitations would be measured before the inclusion of any minority interest and after the deductions from and adjustments to the regulatory capital of the parent banking organization described in sections 22(a) and (b) of the capital rule.
The agencies remain focused on ensuring that the capital requirements applied to banking organizations are appropriately tailored to an organization's size, complexity, and risk profile. Accordingly, the largest and most internationally active banking organizations should be required to comply with stricter or more complex regulations, where appropriate, commensurate with their size, complexity, and risk profile. The agencies are therefore not proposing to change the more risk-sensitive minority interest calculation for advanced approaches banking organizations. Given the potential complexity in the capital structure of the largest and most systemically important institutions, the agencies believe that maintaining the more risk-sensitive approach for these firms better ensures they do not overstate capital ratios at the consolidated level as a result of overcapitalized subsidiaries, thereby protecting the safety and soundness of the banking sector.
The proposed rule would make certain technical corrections and clarifications to the capital rule. The agencies have identified typographical and technical errors in several provisions of the capital rule that warrant clarification or updating. The agencies are, therefore, proposing to revise the capital rule as described below. Most of the proposed corrections or technical changes are self-explanatory. In addition, there are several incorrect or imprecise cross-references that the agencies propose to change in an effort to better clarify the capital rule's requirements, as well as other changes to references necessary to implement the simplifications described previously in this preamble.
In section 1, the proposed rule would clarify that the capital adequacy standards do not apply to Federal branches and agencies of foreign banks that are regulated by the OCC. The OCC regulates Federal branches and agencies of foreign banks.
In section 2, the proposed rule would correct an error in the definition of
The proposed rule would add “the European Stability Mechanism” and “the European Financial Stability Facility” to the capital rule with respect to (i) the definition of
The agencies are making technical amendments to section 11(a) of the capital rule, on the capital conservation buffer, to clarify the calculation of a banking organization's maximum payout amount for a specific calendar quarter. First, the proposal would clarify that the eligible retained income during a specific current calendar quarter is the banking organization's net income, calculated in accordance with the instructions for the Call Report or the FR Y-9C, as appropriate, for the four calendar quarters preceding the current calendar quarter.
In section 20(d)(5) for the Board's and OCC's capital rule, the proposed rule would provide that the reference to AOCI opt-out election is section 22(b)(2) instead of section 20(b)(2).
In section 20(c) of the capital rule, the OCC's and FDIC's regulations mistakenly provide that cash dividend payments on additional tier 1 capital instruments may not be subject to a “limit” imposed by the contractual terms governing the instrument. This requirement was intended to apply only to common equity tier 1 capital instruments, and not to additional tier 1 capital instruments. The proposed rule would harmonize the language of the agencies' capital rule in section 20(c) by removing this requirement for additional tier 1 instruments.
In a new section 20(f) of the Board's capital rule, for purposes of clarity and enforceability, the proposed rule would create a stand-alone requirement that a Board-regulated banking organization may not repurchase or redeem any common equity tier 1 capital, additional tier 1, or tier 2 capital instrument without the prior approval of the Board. This requirement already exists in the capital rule as a requirement for each definition of common equity tier 1, additional tier 1, and tier 2 capital instruments in sections 20(b)(iii), 20(c)(iv), and 20(d)(x), respectively.
In section 22(g) of the capital rule, the proposed rule would remove specific references to assets to exclude from risk weighting if already deducted from regulatory capital. The effect of this proposed change would be to exclude from standardized total risk-weighted assets and, as applicable, advanced approaches total risk-weighted assets any items deducted from capital, not only the items specifically enumerated.
In section 22(h) of the capital rule, the proposed rule would replace inaccurate terminology with the properly defined terms “investment in the capital of an unconsolidated financial institution” and “investment in the [AGENCY]-regulated institution's own capital instrument,” as described in section 2.
The proposed rule would revise, for purposes of clarity, the capital rule's sections 32(d)(2)(iii) and (iv), and create a new section 32(d)(2)(v). The revised section 32(d)(2)(iii) would require banking organizations to “assign a 20 percent risk weight to an exposure that is a self-liquidating, trade-related contingent item that arises from the movement of goods and that has a maturity of three months or less to a foreign bank whose home country has a CRC of 0, 1, 2, or 3, or is an OECD member with no CRC.” This requirement is currently embedded in section 32(d)(2)(iii) of the capital rule, together with rule text related to the risk weighting of exposures to a foreign bank whose home country is not a member of the OECD and does not have a CRC. This latter provision would become a stand-alone requirement in the revised section 32(d)(2)(iv) under the proposed rule. In addition, the proposed rule would reassign the current section 32(d)(2)(iv) text as a new section 32(d)(2)(v).
In sections 34(c)(1) and 34(c)(2)(i) of the capital rule, the proposed rule would provide that the counterparty credit risk capital requirement references subpart D of the capital rule in its entirety rather than just section 32 of subpart D.
In sections 35(b)(3)(ii), 35(b)(4)(ii), 35(c)(3)(ii), 35(c)(4)(ii), 36(c), 37(b)(2)(i), 38(e)(2), 42(j)(2)(ii)(A), 133(b)(3)(ii), and 133(c)(3)(ii) of the capital rule, the proposed rule would provide that the risk weight substitution references subpart D in its entirety rather than just section 32 of subpart D.
In section 61 of the capital rule, the proposed rule would clarify the requirement that a non-advanced approaches banking organization with $50 billion or more in total consolidated assets would need to complete the disclosure requirements described in sections 62 and 63, unless it is a consolidated subsidiary of a bank holding company, savings and loan holding company, or depository institution that is subject to the disclosure requirements of section 62, or a subsidiary of a non-U.S. banking organization that is subject to comparable public disclosure requirements in its home jurisdiction.
Table 8 of section 63 of the capital rule describes information related to securitization exposures that banking organizations are required to disclose. The capital rule revised the risk-based capital treatment of these items, including the regulatory capital treatment of after-tax gain-on-sale resulting from a securitization and credit-enhancing interest-only strips that do not constitute after-tax gain-on-sale. Because Table 8 does not properly reflect these revisions, the agencies propose to update line (i)(2) under quantitative disclosures to appropriately reflect these revisions.
In section 210(b)(2)(vii) of the Board's capital rule, the proposed rule would add references to U.S. intermediate holding companies to clarify for these firms how to calculate capital requirements related to securitization positions under the Board's market risk capital rule depending on whether they are using the advanced approaches to calculate risk-weighted assets.
In table 4 of section 300 of the capital rule, the proposed rule would revise the title “Transition adjustments” to reference section 22(b)(1)(iii) rather than section 22(b)(2).
In section 300(c)(2) of the Board's capital rule, the proposed rule would clarify that the mergers and acquisitions that can potentially affect the inclusion of certain non-qualifying capital instruments in a Board-regulated banking organization's regulatory capital would have occurred after December 31, 2013.
As discussed, the 2013 revisions to the capital rule required banking organizations to increase both the quality and quantity of regulatory capital. As a result, some items that previously were included in the calculation of regulatory capital became excluded, and the amounts of required regulatory capital relative to certain exposure types increased. As part of the capital rule rulemaking, the agencies established transition provisions to phase in many of these requirements over several years in order to give banking organizations sufficient time to adjust and adapt to the requirements of the rule. Many of the transition provisions continue to be in effect, and include ongoing phase-ins to the calculation of capital.
During the development of this proposal, the agencies recognized the capital rule would automatically enact stricter treatments for items potentially impacted by this proposal on January 1, 2018, while the agencies are simultaneously working through the rulemaking process to provide burden relief to non-advanced approaches banking organizations for the very same items. To address this concern, in August 2017, the agencies invited public comment on a proposed rule to extend the current treatment under the transition provisions of the capital rule for certain regulatory capital deductions and risk weights and certain minority interest requirements.
In the transitions NPR, the agencies explained that the proposed extension was intended to limit burden on banking organizations by maintaining the transitions in effect for 2017 while the agencies developed potential simplifications to the treatment of affected items under the capital rule. The current proposal reflects the simplifications referenced by the agencies in the transitions NPR. If the transition extensions proposed in the transitions NPR are finalized, the scheduled recalibrations under the transition provisions of the capital rule would be halted for the affected items and the treatment in effect for 2017 would continue until further action by the agencies. As described in the transitions NPR, the agencies expect that the transition extensions would cease to be appropriate upon completion of the agencies' simplifications rulemaking process.
If the transition extensions are not finalized, all the transition provisions currently in the capital rule would remain in effect, including a final, stricter recalibration to the treatment of items discussed in the transitions NPR beginning January 1, 2018, for all banking organizations covered by the agencies' capital rule. Thus, whether or not the transition extensions in the transitions NPR are implemented, the agencies believe that the transitions would cease to be appropriate upon the agencies' adoption of a final rule in conjunction with the rulemaking process for the proposed simplifications. Accordingly, in connection with this simplification proposal, the agencies propose to remove the transition provisions applicable to MSAs, temporary difference DTAs, investments in the capital of unconsolidated financial institutions, and minority interest, all of which are currently scheduled to end in 2018.
Certain provisions of the proposed rule contain “collection of information” requirements within the meaning of the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521). In accordance with the requirements of the PRA, the agencies may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently-valid Office of Management and Budget (OMB) control number. The revised disclosure requirements are found in section _.63 of the proposed rule. The OMB control number for the OCC is 1557-0318, Board is 7100-0313, and FDIC is 3064-0153. These information collections will be extended for three years, with revision. The information collection requirements contained in this proposed rulemaking have been submitted by the OCC and FDIC to OMB for review and approval under section 3507(d) of the PRA (44 U.S.C. 3507(d)) and section 1320.11 of the OMB's implementing regulations (5 CFR 1320). The Board reviewed the proposed rule under the authority delegated to the Board by OMB.
Comments are invited on:
a. Whether the collections of information are necessary for the proper performance of the Board's functions, including whether the information has practical utility;
b. The accuracy or the estimate of the burden of the information collections, including the validity of the methodology and assumptions used;
c. Ways to enhance the quality, utility, and clarity of the information to be collected;
d. Ways to minimize the burden of the information collections on respondents, including through the use of automated collection techniques or other forms of information technology; and
e. Estimates of capital or startup costs and costs of operation, maintenance,
All comments will become a matter of public record. Comments on aspects of this notice that may affect reporting, recordkeeping, or disclosure requirements and burden estimates should be sent to the addresses listed in the
Recordkeeping (Ongoing)—16.
Recordkeeping (Initial setup)—122.
Recordkeeping (Ongoing)—20.
Disclosure (Initial setup)—226.25.
Disclosure (Ongoing quarterly)—131.25.
Recordkeeping (Initial setup)—460.
Recordkeeping (Ongoing)—540.77.
Recordkeeping (Ongoing quarterly)—20.
Disclosure (Initial setup)—280.
Disclosure (Ongoing)—5.78.
Disclosure (Ongoing quarterly)—35.
Recordkeeping (Ongoing)—16.
Recordkeeping (Initial setup)—122.
Recordkeeping (Ongoing)—20.
Disclosure (Initial setup)—226.25.
Disclosure (Ongoing quarterly)—131.25.
Recordkeeping (Initial setup)—460.
Recordkeeping (Ongoing)—540.77.
Recordkeeping (Ongoing quarterly)—20.
Disclosure (Initial setup)—280.
Disclosure (Ongoing)—5.78.
Disclosure (Ongoing quarterly)—35.
Disclosure (Table 13 quarterly)—5.
Recordkeeping (Ongoing)—0.5.
The proposed rule will also require changes to the Consolidated Reports of Condition and Income (Call Reports) (FFIEC 031, FFIEC 041, and FFIEC 051; OMB No. 1557-0081, 7100-0036, and 3064-0052), Consolidated Financial Statements for Holding Companies (FR Y-9C; OMB No. 7100-0128), and Capital Assessments and Stress Testing (FR Y-14A and Q; OMB No. 7100-0341), which will be addressed in a separate
As of June 30, 2017, the OCC supervises 907 small entities.
The rule would apply to all OCC-supervised entities that are not subject to the advanced approaches risk-based capital rules, and thus potentially affects a substantial number of small entities. The OCC has determined that 153 such entities engage in affected activities to an extent that they would be impacted directly by the proposed rule. Although a substantial number of small entities would be impacted by the proposed rule, the OCC does not find that this impact is economically significant. To determine whether a proposed rule would have a significant effect, the OCC considers whether projected cost increases associated with the proposed rule are greater than or equal to either 5 percent of a small bank's total annual salaries and benefits or 2.5 percent of an OCC-supervised small entity's total non-interest expense. The value of the change in capital
Therefore, the OCC certifies that the proposed rule would not have a significant economic impact on a substantial number of OCC-supervised small entities.
Aspects of the proposed rule would apply to all state member banks, as well as all bank holding companies and savings and loan holding companies that are subject to the Board's regulatory capital rule. Certain portions of the proposed rule would not apply to state member banks, bank holding companies, and savings and loan holding companies that are subject to the advanced approaches. In general, the Board's capital rule only applies to bank holding companies and savings and loan holding companies that are not subject to the Board's Small Bank Holding Company Policy Statement, which applies to bank holding companies and savings and loan holding companies with less than $1 billion in total assets that also meet certain additional criteria.
Given that the proposed rule does not impact the recordkeeping and reporting requirements that affected small banking organizations are currently subject to, there would be no change to the information that small banking organizations must track and report. The agencies anticipate updating the relevant reporting forms at a later date to the extent necessary to align with the capital rule.
For purposes of the standardized approach, the proposal would replace the exposure category HVCRE with the exposure category HVADC. HVADC exposure is expected to generally cover a broader range of exposures than HVCRE exposure. However, the proposal would assign a 130 percent risk weight to HVADC exposures, as opposed to the 150 percent risk weight currently assigned to HVCRE exposures. Based upon data reported on the FR Y-9C and on Call Report information, as of June 30, 2017, about 80 percent of small state member banks, small bank holding companies, and small savings and loan holding companies report holdings of acquisition, development, or construction exposures, excluding one- to four-family residential properties, and about 30 percent of state member banks, small bank holding companies, and small savings and loan holding companies report some holdings of HVCRE exposures risk weighted at 150 percent. The Board expects that the expanded scope and reduced risk-weight of HVADC exposure relative to HVCRE exposure would result in roughly equivalent capital requirements under the proposal as currently provided by the capital rule.
For non-advanced approaches banking organizations, the proposal would revise the capital deductions for MSAs, temporary difference DTAs, and investments in the capital of unconsolidated financial institutions by raising the threshold at which such items must be deducted and simplifying the number and interaction of required deductions. The Board expects that the proposal would result in slightly lower capital requirements compared to the capital rule for a few small banking organizations that currently deduct MSAs, temporary difference DTAs, and/or investments in the capital of unconsolidated financial institutions. Because so few banking organizations are currently subject to these deductions, the number of affected banking organizations appears to be minimal.
Also for non-advanced approaches banking organizations, the proposal would simplify the requirements related to the inclusion of minority interest of subsidiaries in capital. The Board expects that the proposal would generally result in more minority interest being includable in capital than is permitted under the current rule. However, only a few small banking organizations currently include minority interest in capital and minority interest represents a significant portion of capital for very few banking organizations. As a result, the impact of this portion of the proposal is not expected to be significant.
The remaining proposed revisions to the capital rule consist of technical corrections and clarifications that have been identified since the rule was issued. None of these revisions constitutes a significant change to the capital rule and the impact of these revisions on banking organizations is expected to be immaterial.
The Board does not believe that the proposed rule duplicates, overlaps, or conflicts with any other Federal rules. In addition, there are no significant alternatives to the proposed rule other than retention of the current rule. In light of the foregoing, the Board does not believe that the proposed rule, if adopted in final form, would have a significant economic impact on a substantial number of small entities. Nonetheless, the Board seeks comment on whether the proposed rule would impose undue burdens on, or have unintended consequences for, small organizations, and whether there are ways such potential burdens or consequences could be minimized in a manner consistent with the purpose of the proposed rule. A final regulatory flexibility analysis will be conducted after consideration of comments received during the public comment period.
The FDIC supervises 3,717 depository institutions,
According to Call Report data as of June 30, 2017, there were 2,338 FDIC-supervised small banking entities that reported approximately $14.4 billion of acquisition, development or construction loans excluding one- to four-family residential projects (non-residential ADC loans). Of these entities, 817 FDIC-supervised small banking entities reported that approximately $3.6 billion of these non-residential ADC loans would meet the current definition of an HVCRE exposure and would qualify for the 150 percent risk weight. We assume that the remainder of the non-residential ADC loans received a 100 percent risk weight as a result of meeting one or more of the currently available exemptions from the current definition of HVCRE. These exemptions relate to either the amount of contributed capital or because the exposure is an agricultural or farm loan, community development loan, or permanent financing. The FDIC is unable to determine the mix of exemptions from the HVCRE definition that FDIC-supervised small banking entities rely upon when assigning the 100 percent risk weight because of limitations in the Call Report data.
Under the proposed rule some future non-residential ADC loans made by a small banking entity that are currently reported as an HVCRE exposure may receive a 100 percent risk weight or a 130 percent risk-weight treatment instead of the 150 percent risk-weight treatment under the current rule. Concurrently, some future non-residential ADC loans made by a small banking entity may receive a 130 percent risk-weight treatment instead of the 100 percent risk-weight treatment under the contributed capital exemption. These loans also may continue to receive a 100 percent risk weight if they qualify under other exemptions of the proposed rule as an agricultural or farm loan, community development loan, a permanent loan as that term is clarified in the proposal, or a loan that is not “primarily” to finance non-residential ADC as defined in the proposal. As with the current rule, all acquisition, development, or construction loans related to one- to four-family residential properties would continue to receive a 100 percent risk weight.
In the absence of Call Report information about the eligibility of current non-residential ADC loans for the various proposed exemptions or how the structure of future non-residential ADC loans will compare to current non-residential ADC loans, the FDIC estimates the maximum amount of capital that could be required under the proposed rule if it were applied to FDIC-supervised small banking entities' current portfolio of non-residential ADC loans (that is, ignoring the grandfathering provision and assuming FDIC-supervised small banking entities make no adjustments to their loan structures in response to the rule) and assuming that no non-residential ADC loans qualify for the exemptions as agricultural or farm loans, community development loans, or permanent loans, or are excluded due to the “primarily finances” test. Assuming that all currently held acquisition, development, or construction exposures excluding one- to four-family exposures, currently risk weighted at 100 percent will be risk-weighted at 130 percent (rather than remaining at 100 percent under potentially available exemptions), and that all HVCRE exposures risk weighted at 150 percent will be risk weighted at 130 percent (rather than 100 percent under potentially available exemptions), the FDIC estimates that there could be a maximum increase in risk weighted assets of approximately $2.6 billion, or less than one percent of the aggregate risk weighted assets for the 2,338 FDIC-supervised small banking entities. The FDIC believes that even this relatively small change to aggregate risk weighted assets is overstated because it is likely that a significant amount of small bank lending would meet one or more of the qualifying exemptions.
The proposed rule would change the regulatory capital treatment of MSAs, temporary difference DTAs, and investments in the capital of unconsolidated financial institutions for FDIC-supervised small banking entities. It does so by removing the individual and aggregate deduction thresholds for these assets and by adopting a single 25 percent common equity tier 1 capital deduction threshold for each type of asset. According to June 30, 2017 Call Report data, at least 1,618 FDIC-supervised small banking entities reported holding some MSAs, DTAs, and deductions due to investments in the capital of unconsolidated financial institutions. Only 45 small institutions reported deductions for holdings across these different assets. The FDIC estimates that the proposed rule would pose an immediate aggregated net benefit of $45.5 million in the form of an increase in tier 1 capital to those institutions that currently have to calculate a deduction. The FDIC expects that the proposed rule would yield future benefits to affected FDIC-supervised small banking entities by reducing the likelihood of a regulatory capital deduction due to holding these asset types. In particular, the proposal would remove a significant capital constraint on FDIC-supervised small banking entities that specialize in mortgage servicing. The proposed increase in threshold deduction makes it less likely that a small banking entity would exit or reduce its activity in the mortgage servicing market.
The proposed rule would remove the capital rule's limitation on the inclusion of minority interest in regulatory capital. It does so by allowing FDIC-supervised small banking entities to
Finally, FDIC-supervised small banking entities are likely to incur some implementation costs in order to comply with the proposed rule. These costs would encompass changes to their systems designed to calculate, manage, and report risk-weighted assets and regulatory capital. Given the limited nature of the changes necessary to comply with the proposed rule, the implementation costs are expected to be minimal. Additionally, the FDIC believes that the proposed changes would help reduce some of the compliance costs associated with these regulations in the long-term by making them easier to apply.
The proposed rule does not impact the recordkeeping and reporting requirements that affect FDIC-supervised small banking entities and there would be no change to the information that FDIC-supervised small banking entities must track and report. The FDIC anticipates updating the relevant reporting forms at a later date to the extent necessary to align with the capital rule.
Question 1. For FDIC-supervised small banking entities, would the proposed rule reduce the compliance costs associated with the capital rules? If so, how?
The threshold-deduction and minority-interest provisions of the proposed rule would increase the amount of eligible regulatory capital for a limited number of FDIC-supervised small banking entities currently subject to deductions or limitations on these items, as described above. The HVADC provisions of the proposed rules would affect far more FDIC-supervised small banking entities, with effects that will vary across institutions and are difficult to estimate. Risk weights for some new ADC exposures will be reduced from 150 percent under the current HVCRE treatment, to 130 percent or 100 percent under the proposed rule if certain exemptions apply. Risk weights for other new ADC exposures will either remain at the currently required 100 percent (if available exemptions apply) or increase to 130 percent. However, the Call Reports do not provide data about the volumes of ADC loans currently eligible for HVCRE exemptions for agriculture, community development or permanent financing, or that would be eligible going forward under the proposed clarification of the permanent financing exemption or the proposed “primarily finances” test. As a result, the net effect on regulatory capital requirements of the proposed HVADC treatment is difficult to estimate with any precision. As noted earlier, however, the FDIC's upper bound estimate (that ignores the grandfathering provision and gives no credit for all the HVADC exemptions previously described) is that risk-weighted assets of the FDIC-supervised small banking entities affected by the rule would increase less than one percent. This upper bound estimate gives some comfort that the actual regulatory capital effects of the proposed HVADC treatment are likely to be modest. The FDIC welcomes comments or data from the institutions it supervises that would enhance our ability to more precisely estimate the net effects of the proposed rule on regulatory capital ratios.
The FDIC does not believe that the proposed rule duplicates, overlaps, or conflicts with any other Federal rules. In addition, there does not appear to be any significant alternatives to the proposed rule other than retention of the current rule. In light of the foregoing discussion, the FDIC does not believe that the proposed rule, if adopted in final form, would have a significant economic impact on a substantial number of small entities. Nonetheless, the FDIC seeks comment on whether the proposed rule would impose undue burdens on, or have unintended consequences for, small organizations, and whether there are ways such potential burdens or consequences could be minimized in a manner consistent with the purpose of the proposed rule. A final regulatory flexibility analysis will be conducted after consideration of comments received during the public comment period.
Section 722 of the Gramm-Leach-Bliley Act requires the Federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. The agencies have sought to present the proposed rule in a simple and straightforward manner, and invite comment on the use of plain language. For example:
• Have the agencies organized the material to suit your needs? If not, how could they present the proposed rule more clearly?
• Are the requirements in the proposed rule clearly stated? If not, how could the proposed rule be more clearly stated?
• Do the regulations contain technical language or jargon that is not clear? If so, which language requires clarification?
• Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes would achieve that?
• Would more, but shorter, sections be better? If so, which sections should be changed?
• What other changes can the agencies incorporate to make the regulation easier to understand?
The OCC analyzed the proposed rule under the factors set forth in the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532). Under this analysis, the OCC considered whether the proposed rule includes a Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year (adjusted for inflation). The OCC has determined that this proposed rule would not result in expenditures by State, local, and Tribal governments, or the private sector, of $100 million or more in any one year.
The Riegle Community Development and Regulatory Improvement Act of 1994 (RCDRIA) requires that each Federal banking agency, in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions, consider, consistent with principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, new regulations and amendments to regulations that impose additional reporting, disclosures, or other new requirements on insured depository institutions generally must take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form.
The agencies note that comment on these matters has been solicited in other sections of this
Administrative practice and procedure, Capital, National banks, Risk.
Administrative practice and procedure, Banks, Banking, Capital, Federal Reserve System, Holding companies.
Administrative practice and procedure, Banks, Banking, Capital adequacy, Savings associations, State non-member banks.
For the reasons set out in the joint preamble, the OCC proposes to amend 12 CFR part 3 as follows.
12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818, 1828(n), 1828 note, 1831n note, 1835, 3907, 3909, and 5412(b)(2)(B).
(a)
(1) An exposure to a sovereign, the Bank for International Settlements, the European Central Bank, the European Commission, the International Monetary Fund, the European Stability Mechanism, the European Financial Stability Facility, a multi-lateral development bank (MDB), a depository institution, a foreign bank, a credit union, or a public sector entity (PSE);
(2) An exposure to a GSE;
(3) A residential mortgage exposure;
(4) A pre-sold construction loan;
(5) A statutory multifamily mortgage;
(6) A high volatility acquisition, development, or construction (HVADC) exposure or a
(7) A cleared transaction;
(8) A default fund contribution;
(9) A securitization exposure;
(10) An equity exposure; or
(11) An unsettled transaction.
(12) A policy loan; or
(13) A separate account.
(1) A sovereign, the Bank for International Settlements, the International Monetary Fund, the European Central Bank, the European Commission, a Federal Home Loan Bank, Federal Agricultural Mortgage Corporation (Farmer Mac), the European Stability Mechanism, the European Financial Stability Facility, a multilateral development bank (MDB), a depository institution, a bank holding company, a savings and loan holding company, a credit union, a foreign bank, or a qualifying central counterparty; or
(2) An entity (other than a special purpose entity):
(i) That at the time the guarantee is issued or anytime thereafter, has issued and outstanding an unsecured debt security without credit enhancement that is investment grade;
(ii) Whose creditworthiness is not positively correlated with the credit risk of the exposures for which it has provided guarantees; and
(iii) That is not an insurance company engaged predominately in the business of providing credit protection (such as a monoline bond insurer or re-insurer).
(1) Primarily finances or refinances the:
(i) Acquisition of vacant or developed land;
(ii) Development of land to prepare to erect new structures including, but not limited to, the laying of sewers or water pipes and demolishing existing structures; or
(iii) Construction of buildings, dwellings, or other improvements including additions or alterations to existing structures; and
(2) Is not a credit facility that finances or refinances:
(i) One- to four-family residential properties;
(ii) Real property projects that would have the primary purpose of “community development” as defined under 12 CFR part 25 (national banks) and 12 CFR part 195 (Federal savings associations); or
(iii) The purchase or development of agricultural land, including, but not
(3) Is not a permanent loan. A permanent loan for purposes of this definition means a prudently underwritten loan that has a clearly identified ongoing source of repayment sufficient to service amortizing principal and interest payments aside from the sale of the property. For purposes of this section, a permanent loan does not include a loan that finances or refinances a stabilization period or unsold lots or units of for-sale projects.
(1) One- to four-family residential properties;
(2) Real property that:
(i) Would qualify as an investment in community development under 12 U.S.C. 338a or 12 U.S.C. 24 (Eleventh), as applicable, or as a “qualified investment” under 12 CFR part 25 (national bank), 12 CFR part 195 (Federal savings association) and
(ii) Is not an ADC loan to any entity described in 12 CFR 25.12(g)(3) (national banks) and 12 CFR 195.12(g)(3) (Federal savings associations), unless it is otherwise described in paragraph (1), (2)(i), (3) or (4) of this definition;
(3) The purchase or development of agricultural land, which includes all land known to be used or usable for agricultural purposes (such as crop and livestock production), provided that the valuation of the agricultural land is based on its value for agricultural purposes and the valuation does not take into consideration any potential use of the land for non-agricultural commercial development or residential development; or
(4) Commercial real estate projects in which:
(i) The loan-to-value ratio is less than or equal to the applicable maximum supervisory loan-to-value ratio in the Board's real estate lending standards at 12 CFR part 34, subpart D (national banks) and 12 CFR part 160, subparts A and B (Federal savings associations);
(ii) The borrower has contributed capital to the project in the form of cash or unencumbered readily marketable assets (or has paid development expenses out-of-pocket) of at least 15 percent of the real estate's appraised “as completed” value; and
(iii) The borrower contributed the amount of capital required by paragraph (4)(ii) of this definition before the Board-regulated institution advances funds under the credit facility, and the capital contributed by the borrower, or internally generated by the project, is contractually required to remain in the project throughout the life of the project. The life of a project concludes only when the credit facility is converted to permanent financing or is sold or paid in full. Permanent financing may be provided by the Board-regulated institution that provided the ADC facility as long as the permanent financing is subject to the Board-regulated institution's underwriting criteria for long-term mortgage loans.
(c) * * *
(4) * * *
(ii) * * *
(H) The credit equivalent amount of all off-balance sheet exposures of the national bank or Federal savings association, excluding repo-style transactions, repurchase or reverse repurchase or securities borrowing or lending transactions that qualify for sales treatment under U.S. GAAP, and derivative transactions, determined using the applicable credit conversion factor under § 3.33(b), provided, however, that the minimum credit conversion factor that may be assigned to an off-balance sheet exposure under this paragraph is 10 percent; and
(a) * * *
(2) * * *
(i)
(iv)
(3)
(A) The national bank or Federal savings association's common equity tier 1 capital ratio minus the national bank or Federal savings association's minimum common equity tier 1 capital ratio requirement under § 3.10;
(B) The national bank or Federal savings association's tier 1 capital ratio minus the national bank or Federal savings association's minimum tier 1 capital ratio requirement under § 3.10; and
(C) The national bank or Federal savings association's total capital ratio minus the national bank or Federal savings association's minimum total capital ratio requirement under § 3.10; or
(b) * * *
(4) Any common equity tier 1 minority interest, subject to the limitations in § 3.21.
(c) * * *
(1) * * *
(viii) Any cash dividend payments on the instrument are paid out of the national bank's or Federal savings association's net income or retained earnings.
(2) Tier 1 minority interest, subject to the limitations in § 3.21, that is not included in the national bank's or Federal savings association's common equity tier 1 capital.
(d) * * *
(2) Total capital minority interest, subject to the limitations set forth in § 3.21, that is not included in the national bank's or Federal savings association's tier 1 capital.
(5) For a national bank or Federal savings association that makes an AOCI opt-out election (as defined in paragraph (b)(2) of § 3.22), 45 percent of pretax net unrealized gains on available-for-sale preferred stock classified as an equity security under GAAP and available-for-sale equity exposures.
(a) (1)
(2)
(3)
(4)
(b) (1)
(i) A consolidated subsidiary of the advanced approaches national bank or Federal savings association has issued regulatory capital that is not owned by the national bank or Federal savings association; and
(ii) For each relevant regulatory capital ratio of the consolidated subsidiary, the ratio exceeds the sum of the subsidiary's minimum regulatory capital requirements plus its capital conservation buffer.
(2)
(3)
(i) The common equity tier 1 minority interest of the subsidiary; minus
(ii) The percentage of the subsidiary's common equity tier 1 capital that is not owned by the advanced approaches national bank or Federal savings association, multiplied by the difference between the common equity tier 1 capital of the subsidiary and the lower of:
(A) The amount of common equity tier 1 capital the subsidiary must hold, or would be required to hold pursuant to paragraph (b) of this section, to avoid restrictions on distributions and discretionary bonus payments under § 3.11 or equivalent standards established by the subsidiary's home country supervisor; or
(B)(
(
(4)
(i) The tier 1 minority interest of the subsidiary; minus
(ii) The percentage of the subsidiary's tier 1 capital that is not owned by the advanced approaches national bank or Federal savings association multiplied by the difference between the tier 1 capital of the subsidiary and the lower of:
(A) The amount of tier 1 capital the subsidiary must hold, or would be required to hold pursuant to paragraph (b) of this section, to avoid restrictions on distributions and discretionary bonus payments under § 3.11 or equivalent standards established by the subsidiary's home country supervisor, or
(B)(
(
(5)
(i) The total capital minority interest of the subsidiary; minus
(ii) The percentage of the subsidiary's total capital that is not owned by the advanced approaches national bank or Federal savings association multiplied by the difference between the total capital of the subsidiary and the lower of:
(A) The amount of total capital the subsidiary must hold, or would be required to hold pursuant to paragraph (b) of this section, to avoid restrictions on distributions and discretionary bonus payments under § 3.11 or equivalent standards established by the subsidiary's home country supervisor, or
(B)(
(
(a) * * *
(1)(i) Goodwill, net of associated deferred tax liabilities (DTLs) in accordance with paragraph (e) of this section; and
(ii) For an advanced approaches national bank or Federal savings association, goodwill that is embedded in the valuation of a significant investment in the capital of an unconsolidated financial institution in the form of common stock (and that is reflected in the consolidated financial statements of the advanced approaches national bank or Federal savings association), in accordance with paragraph (d) of this section;
(c)
(1)
(i) A national bank or Federal savings association must deduct an investment in the national bank's or Federal savings association's own common stock instruments from its common equity tier 1 capital elements to the extent such instruments are not excluded from regulatory capital under § 3.20(b)(1);
(ii) A national bank or Federal savings association must deduct an investment in the national bank's or Federal savings association's own additional tier 1 capital instruments from its additional tier 1 capital elements; and
(iii) A national bank or Federal savings association must deduct an investment in the national bank's or Federal savings association's own tier 2 capital instruments from its tier 2 capital elements.
(2)
(i) If an investment is in the form of an instrument issued by a financial institution that is not a regulated financial institution, the national bank or Federal savings association must treat the instrument as:
(A) A common equity tier 1 capital instrument if it is common stock or represents the most subordinated claim in liquidation of the financial institution; and
(B) An additional tier 1 capital instrument if it is subordinated to all creditors of the financial institution and is senior in liquidation only to common shareholders.
(ii) If an investment is in the form of an instrument issued by a regulated financial institution and the instrument does not meet the criteria for common equity tier 1, additional tier 1 or tier 2 capital instruments under § 3.20, the national bank or Federal savings association must treat the instrument as:
(A) A common equity tier 1 capital instrument if it is common stock included in GAAP equity or represents the most subordinated claim in liquidation of the financial institution;
(B) An additional tier 1 capital instrument if it is included in GAAP equity, subordinated to all creditors of the financial institution, and senior in a receivership, insolvency, liquidation, or similar proceeding only to common shareholders; and
(C) A tier 2 capital instrument if it is not included in GAAP equity but considered regulatory capital by the primary supervisor of the financial institution.
(iii) If an investment is in the form of a non-qualifying capital instrument (as defined in § 3.300(c)), the national bank or Federal savings association must treat the instrument as:
(A) An additional tier 1 capital instrument if such instrument was included in the issuer's tier 1 capital prior to May 19, 2010; or
(B) A tier 2 capital instrument if such instrument was included in the issuer's tier 2 capital (but not includable in tier 1 capital) prior to May 19, 2010.
(3)
(4)
(5)
(ii) The amount to be deducted under this section from a specific capital component is equal to:
(A) The advanced approaches national bank's or Federal savings association's non-significant investments in the capital of unconsolidated financial institutions exceeding the 10 percent threshold for non-significant investments, multiplied by
(B) The ratio of the advanced approaches national bank's or Federal
(6)
(d)
(1) A national bank or Federal savings association that is not an advanced approaches national bank or Federal savings association must make deductions from regulatory capital as described in this paragraph (d)(1).
(i) The national bank or Federal savings association must deduct from common equity tier 1 capital elements the amount of each of the items set forth in this paragraph (d)(1) that, individually, exceeds 25 percent of the sum of the national bank's or Federal savings association's common equity tier 1 capital elements, less adjustments to and deductions from common equity tier 1 capital required under paragraphs (a) through (c)(3) of this section (the 25 percent common equity tier 1 capital deduction threshold).
(ii) The national bank or Federal savings association must deduct from common equity tier 1 capital elements the amount of DTAs arising from temporary differences that the national bank or Federal savings association could not realize through net operating loss carrybacks, net of any related valuation allowances and net of DTLs, in accordance with paragraph (e) of this section. A national bank or Federal savings association is not required to deduct from the sum of its common equity tier 1 capital elements DTAs (net of any related valuation allowances and net of DTLs, in accordance with § 3.22(e)) arising from timing differences that the national bank or Federal savings association could realize through net operating loss carrybacks. The national bank or Federal savings association must risk weight these assets at 100 percent. For a national bank or Federal savings association that is a member of a consolidated group for tax purposes, the amount of DTAs that could be realized through net operating loss carrybacks may not exceed the amount that the national bank or Federal savings association could reasonably expect to have refunded by its parent holding company.
(iii) The national bank or Federal savings association must deduct from common equity tier 1 capital elements the amount of MSAs net of associated DTLs, in accordance with paragraph (e) of this section.
(iv) For purposes of calculating the amount of DTAs subject to deduction pursuant to paragraph (d)(1) of this section, a national bank or Federal savings association may exclude DTAs and DTLs relating to adjustments made to common equity tier 1 capital under paragraph (b) of this section. A national bank or Federal savings association that elects to exclude DTAs relating to adjustments under paragraph (b) of this section also must exclude DTLs and must do so consistently in all future calculations. A national bank or Federal savings association may change its exclusion preference only after obtaining the prior approval of the OCC.
(2) An advanced approaches national bank or Federal savings association must make deductions from regulatory capital as described in this paragraph (d)(2).
(i) An advanced approaches national bank or Federal savings association must deduct from common equity tier 1 capital elements the amount of each of the items set forth in this paragraph (d)(2) that, individually, exceeds 10 percent of the sum of the advanced approaches national bank's or Federal savings association's common equity tier 1 capital elements, less adjustments to and deductions from common equity tier 1 capital required under paragraphs (a) through (c) of this section (the 10 percent common equity tier 1 capital deduction threshold).
(A) DTAs arising from temporary differences that the advanced approaches national bank or Federal savings association could not realize through net operating loss carrybacks, net of any related valuation allowances and net of DTLs, in accordance with paragraph (e) of this section. An advanced approaches national bank or Federal savings association is not required to deduct from the sum of its common equity tier 1 capital elements DTAs (net of any related valuation allowances and net of DTLs, in accordance with § 3.22(e)) arising from timing differences that the advanced approaches national bank or Federal savings association could realize through net operating loss carrybacks. The advanced approaches national bank or Federal savings association must risk weight these assets at 100 percent. For a national bank or Federal savings association that is a member of a consolidated group for tax purposes, the amount of DTAs that could be realized through net operating loss carrybacks may not exceed the amount that the national bank or Federal savings association could reasonably expect to have refunded by its parent holding company.
(B) MSAs net of associated DTLs, in accordance with paragraph (e) of this section.
(C) Significant investments in the capital of unconsolidated financial institutions in the form of common stock, net of associated DTLs in accordance with paragraph (e) of this section.
(ii) An advanced approaches national bank or Federal savings association must deduct from common equity tier 1 capital elements the items listed in paragraph (d)(2)(i) of this section that are not deducted as a result of the application of the 10 percent common equity tier 1 capital deduction threshold, and that, in aggregate, exceed 17.65 percent of the sum of the advanced approaches national bank's or Federal savings association's common equity tier 1 capital elements, minus adjustments to and deductions from common equity tier 1 capital required under paragraphs (a) through (c) of this section, minus the items listed in paragraph (d)(2)(i) of this section (the 15 percent common equity tier 1 capital deduction threshold). Any goodwill that has been deducted under paragraph (a)(1) of this section can be excluded from the significant investments in the capital of unconsolidated financial institutions in the form of common stock.
(iii) For purposes of calculating the amount of DTAs subject to the 10 and 15 percent common equity tier 1 capital deduction thresholds, an advanced approaches national bank or Federal savings association may exclude DTAs and DTLs relating to adjustments made to common equity tier 1 capital under paragraph (b) of this section. An advanced approaches national bank or Federal savings association that elects to exclude DTAs relating to adjustments under paragraph (b) of this section also must exclude DTLs and must do so consistently in all future calculations. An advanced approaches national bank or Federal savings association may change its exclusion preference only after obtaining the prior approval of the OCC.
(g)
(h)
(2)
(i) For an equity exposure that is held directly, the adjusted carrying value as that term is defined in § 3.51(b);
(ii) For an exposure that is held directly and is not an equity exposure or a securitization exposure, the exposure amount as that term is defined in § 3.2;
(iii) For an indirect exposure, the national bank's or Federal savings association's carrying value of the investment in the investment fund, provided that, alternatively:
(A) A national bank or Federal savings association may, with the prior approval of the Board, use a conservative estimate of the amount of its investment in the national bank's or Federal savings association's own capital instruments or its investment in the capital of an unconsolidated financial institution held through a position in an index; or
(B) A national bank or Federal savings association may calculate the gross long position for investments in the national bank's or Federal savings association's own capital instruments or investments in the capital of an unconsolidated financial institution by multiplying the national bank's or Federal savings association's carrying value of its investment in the investment fund by either:
(
(
(iv) For a synthetic exposure, the amount of the national bank's or Federal savings association's loss on the exposure if the reference capital instrument were to have a value of zero.
(3)
(i) The maturity of the short position must match the maturity of the long position, or the short position has a residual maturity of at least one year (maturity requirement); or
(ii) For a position that is a trading asset or trading liability (whether on- or off-balance sheet) as reported on the national bank's or Federal savings association 's Call Report, if the national bank or Federal savings association has a contractual right or obligation to sell the long position at a specific point in time and the counterparty to the contract has an obligation to purchase the long position if the national bank or Federal savings association exercises its right to sell, this point in time may be treated as the maturity of the long position such that the maturity of the long position and short position are deemed to match for purposes of the maturity requirement, even if the maturity of the short position is less than one year; and
(iii) For an investment in the national bank's or Federal savings association's own capital instrument under paragraph (c)(1) of this section or an investment in the capital of an unconsolidated financial institution under paragraphs (c) and (d):
(A) A national bank or Federal savings association may only net a short position against a long position in an investment in the national bank's or Federal savings association's own capital instrument under paragraph (c) of this section if the short position involves no counterparty credit risk.
(B) A gross long position in an investment in the national bank's or Federal savings association's own capital instrument or an investment in the capital of an unconsolidated financial institution resulting from a position in an index may be netted against a short position in the same index. Long and short positions in the same index without maturity dates are considered to have matching maturities.
(C) A short position in an index that is hedging a long cash or synthetic position in an investment in the national bank's or Federal savings association's own capital instrument or an investment in the capital of an
(b)
(d) * * *
(2)
(ii) A national bank or Federal savings association must assign a 20 percent risk weight to an exposure to a foreign bank whose home country is a member of the OECD and does not have a CRC.
(iii) A national bank or Federal savings association must assign a 20 percent risk-weight to an exposure that is a self-liquidating, trade-related contingent item that arises from the movement of goods and that has a maturity of three months or less to a foreign bank whose home country has a CRC of 0, 1, 2, or 3, or is an OECD member with no CRC.
(iv) A national bank or Federal savings association must assign a 100 percent risk weight to an exposure to a foreign bank whose home country is not a member of the OECD and does not have a CRC, with the exception of self-liquidating, trade-related contingent items that arise from the movement of goods, and that have a maturity of three months or less, which may be assigned a 20 percent risk weight.
(v) A national bank or Federal savings association must assign a 150 percent risk weight to an exposure to a foreign bank immediately upon determining that an event of sovereign default has occurred in the bank's home country, or if an event of sovereign default has occurred in the foreign bank's home country during the previous five years.
(3) * * *
(ii) A significant investment in the capital of an unconsolidated financial institution in the form of common stock pursuant to § 3.22(d)(2)(1)(c);
(j)(1)
(2)
(k)
(1) A national bank or Federal savings association must assign a 150 percent risk weight to the portion of the exposure that is not guaranteed or that is unsecured;
(2) A national bank or Federal savings association may assign a risk weight to the guaranteed portion of a past due exposure based on the risk weight that applies under § 3.36 if the guarantee or credit derivative meets the requirements of that section; and
(3) A national bank or Federal savings association may assign a risk weight to the collateralized portion of a past due exposure based on the risk weight that applies under § 3.37 if the collateral meets the requirements of that section.
(l)
(ii) A national bank or Federal savings association must assign a zero percent risk weight to cash owned and held in all offices of the national bank or Federal savings association or in transit; to gold bullion held in the national bank's or Federal savings association's own vaults or held in another depository institution's vaults on an allocated basis, to the extent the gold bullion assets are offset by gold bullion liabilities; and to exposures that arise from the settlement of cash transactions (such as equities, fixed income, spot foreign exchange and spot commodities) with a central counterparty where there is no assumption of ongoing counterparty credit risk by the central counterparty after settlement of the trade and associated default fund contributions.
(2) A national bank or Federal savings association must assign a 20 percent risk weight to cash items in the process of collection.
(3) A national bank or Federal savings association must assign a 100 percent risk weight to DTAs arising from temporary differences that the national bank or Federal savings association could realize through net operating loss carrybacks.
(4) A national bank or Federal savings association must assign a 250 percent risk weight to the portion of each of the following items to the extent it is not deducted from common equity tier 1 capital pursuant to § 3.22(d):
(i) MSAs; and
(ii) DTAs arising from temporary differences that the national bank or Federal savings association could not realize through net operating loss carrybacks.
(5) A national bank or Federal savings association must assign a 100 percent risk weight to all assets not specifically assigned a different risk weight under this subpart and that are not deducted from tier 1 or tier 2 capital pursuant to § 3.22.
(6) Notwithstanding the requirements of this section, a national bank or
(i) The national bank or Federal savings association is not authorized to hold the asset under applicable law other than debt previously contracted or similar authority; and
(ii) The risks associated with the asset are substantially similar to the risks of assets that are otherwise assigned to a risk weight category of less than 100 percent under this subpart.
(c)
(2)
(ii) The provisions of this paragraph (c)(2) apply to all relevant counterparties for risk-based capital purposes unless the national bank or Federal savings association is treating the OTC credit derivative as a covered position under subpart F, in which case the national bank or Federal savings association must compute a supplemental counterparty credit risk capital requirement under this section.
(b) * * *
(3) * * *
(ii) For a cleared transaction with a CCP that is not a QCCP, a clearing member client national bank or Federal savings association must apply the risk weight appropriate for the CCP according to this subpart D.
(4) * * *
(ii) A clearing member client national bank or Federal savings association must calculate a risk-weighted asset amount for any collateral provided to a CCP, clearing member, or custodian in connection with a cleared transaction in accordance with the requirements under this subpart D.
(c) * * *
(3) * * *
(ii) For a cleared transaction with a CCP that is not a QCCP, a clearing member national bank or Federal savings association must apply the risk weight appropriate for the CCP according to this subpart D.
(4) * * *
(ii) A clearing member national bank or Federal savings association must calculate a risk-weighted asset amount for any collateral provided to a CCP, clearing member, or a custodian in connection with a cleared transaction in accordance with requirements under this subpart D.
(c)
(2)
(i) The national bank or Federal savings association may calculate the risk-weighted asset amount for the protected exposure under this subpart D, where the applicable risk weight is the risk weight applicable to the guarantor or credit derivative protection provider.
(ii) The national bank or Federal savings association must calculate the risk-weighted asset amount for the unprotected exposure under this subpart D, where the applicable risk weight is that of the unprotected portion of the hedged exposure.
(iii) The treatment provided in this section is applicable when the credit risk of an exposure is covered on a partial pro rata basis and may be applicable when an adjustment is made to the effective notional amount of the guarantee or credit derivative under paragraphs (d), (e), or (f) of this section.
(b)
(2)
(e) * * *
(2) From the business day after the national bank or Federal savings association has made its delivery until five business days after the counterparty delivery is due, the national bank or Federal savings association must calculate the risk-weighted asset amount for the transaction by treating the current fair value of the deliverables owed to the national bank or Federal savings association as an exposure to the counterparty and using the applicable counterparty risk weight under this subpart D.
(j) * * *
(2) * * *
(ii) * * *
(A) If the national bank or Federal savings association purchases credit protection from a counterparty that is not a securitization SPE, the national bank or Federal savings association must determine the risk weight for the exposure according to this subpart D.
(b) * * *
(1)
(4)
Sections 3.61 through 3.63 of this subpart establish public disclosure requirements related to the capital requirements described in subpart B of this part for a national bank or Federal savings association with total consolidated assets of $50 billion or more as reported on the national bank's or Federal savings association's most recent year-end Call Report that is not an advanced approaches national bank or Federal savings association making public disclosures pursuant to § 3.172. An advanced approaches national bank or Federal savings association that has not received approval from the OCC to exit parallel run pursuant to § 3.121(d) is subject to the disclosure requirements described in §§ 3.62 and 3.63. A national bank or Federal savings association with total consolidated assets of $50 billion or more as reported on the national bank's or Federal savings association's most recent year-end Call Report that is not an advanced approaches national bank or Federal savings association making public disclosures subject to § 3.172 must comply with § 3.62 unless it is a consolidated subsidiary of a bank holding company, savings and loan holding company, or depository institution that is subject to the disclosure requirements of § 3.62 or a subsidiary of a non-U.S. banking organization that is subject to comparable public disclosure requirements in its home jurisdiction. For purposes of this section, total consolidated assets are determined based on the average of the national bank's or Federal savings association 's total consolidated assets in the four most recent quarters as reported on the Call Report or the average of the national bank or Federal savings association's total consolidated assets in the most recent consecutive quarters as reported quarterly on the national bank's or Federal savings association 's Call Report if the national bank or Federal savings association has not filed such a report for each of the most recent four quarters.
(b) * * *
(1) One- to four-family residential properties;
(2) Real property that:
(i) Would qualify as an investment in community development under 12 U.S.C. 338a or 12 U.S.C. 24 (Eleventh), as applicable, or as a “qualified investment” under 12 CFR part 25 (national banks) and 195 (Federal savings associations), and
(ii) Is not an ADC loan to any entity described in 12 CFR 25.12(g)(3) (national banks) and 12 CFR 195.12(g)(3) (Federal savings associations), unless it is otherwise described in paragraph (1), (2)(i), (3) or (4) of this definition;
(3) The purchase or development of agricultural land, which includes all land known to be used or usable for agricultural purposes (such as crop and livestock production), provided that the valuation of the agricultural land is based on its value for agricultural purposes and the valuation does not take into consideration any potential use of the land for non-agricultural commercial development or residential development; or
(4) Commercial real estate projects in which:
(i) The loan-to-value ratio is less than or equal to the applicable maximum supervisory loan-to-value ratio in the OCC's real estate lending standards at 12 CFR part 34, subpart D (national banks) and 12 CFR part 160 (Federal savings associations);
(ii) The borrower has contributed capital to the project in the form of cash or unencumbered readily marketable assets (or has paid development expenses out-of-pocket) of at least 15 percent of the real estate's appraised “as completed” value; and
(iii) The borrower contributed the amount of capital required by paragraph (4)(ii) of this definition before the national bank or Federal savings association advances funds under the credit facility, and the capital contributed by the borrower, or internally generated by the project, is contractually required to remain in the project throughout the life of the project. The life of a project concludes only when the credit facility is converted to permanent financing or is sold or paid in full. Permanent financing may be provided by the national bank or Federal savings association that provided the ADC facility as long as the permanent financing is subject to the national bank's or Federal savings association 's underwriting criteria for long-term mortgage loans.
(d) * * *
(2)
(b)
(3) * * *
(ii) For a cleared transaction with a CCP that is not a QCCP, a clearing member client national bank or Federal savings association must apply the risk weight applicable to the CCP under subpart D of this part.
(c) * * *
(3) * * *
(ii) For a cleared transaction with a CCP that is not a QCCP, a clearing member national bank or Federal savings association must apply the risk weight applicable to the CCP according to subpart D of this part.
(b) * * *
(5)
(6)
(b) * * *
(b) * * *
(2) * * *
(ii)
(b)
(1)
(i) A national bank or Federal savings association must deduct the following items from common equity tier 1 and additional tier 1 capital in accordance with the percentages set forth in Table 2 to § 3.300: Goodwill (§ 3.22(a)(1)), DTAs that arise from net operating loss and tax credit carryforwards (§ 3.22(a)(3)), a gain-on-sale in connection with a securitization exposure (§ 3.22(a)(4)), defined benefit pension fund assets (§ 3.22(a)(5)), expected credit loss that exceeds eligible credit reserves (for advanced approaches national banks and Federal savings associations that have completed the parallel run process and that have received notifications from the OCC pursuant to § 3.121(d) of subpart E) and financial subsidiaries (§ 3.22(a)(7)), and nonincludable subsidiaries of a Federal savings association (§ 3.22(a)(8)).
(ii) A national bank or Federal savings association must deduct from common equity tier 1 capital any intangible assets other than goodwill and MSAs in accordance with the percentages set forth in Table 3 to § 3.300.
(iii) A national bank or Federal savings association must apply a 100 percent risk-weight to the aggregate amount of intangible assets other than goodwill and MSAs that are not required to be deducted from common equity tier 1 capital under this section.
(2)
(i) If the aggregate amount of the adjustment is positive, the national bank or Federal savings association must allocate the deduction between common equity tier 1 and tier 1 capital in accordance with Table 4 to § 3.300.
(ii) If the aggregate amount of the adjustment is negative, the national bank or Federal savings association must add back the adjustment to common equity tier 1 capital or to tier 1 capital, in accordance with Table 4 to § 3.300.
(3)
(i) The transition AOCI adjustment amount is the aggregate amount of a national bank's or Federal savings association's:
(A) Unrealized gains on available-for-sale securities that are preferred stock classified as an equity security under GAAP or available-for-sale equity exposures, plus
(B) Net unrealized gains or losses on available-for-sale securities that are not preferred stock classified as an equity security under GAAP or available-for-sale equity exposures, plus
(C) Any amounts recorded in AOCI attributed to defined benefit postretirement plans resulting from the initial and subsequent application of the relevant GAAP standards that pertain to such plans (excluding, at the national bank's or Federal savings association's option, the portion relating to pension assets deducted under section 22(a)(5)), plus
(D) Accumulated net gains or losses on cash flow hedges related to items that are reported on the balance sheet at fair value included in AOCI, plus
(E) Net unrealized gains or losses on held-to-maturity securities that are included in AOCI.
(ii) A national bank or Federal savings association must make the following adjustment to its common equity tier 1 capital:
(A) If the transition AOCI adjustment amount is positive, the appropriate amount must be deducted from common equity tier 1 capital in accordance with Table 5 to § 3.300.
(B) If the transition AOCI adjustment amount is negative, the appropriate amount must be added back to common equity tier 1 capital in accordance with Table 5 to § 3.300.
(iii) A national bank or Federal savings association may include in tier 2 capital the percentage of unrealized gains on available-for-sale preferred stock classified as an equity security under GAAP and available-for-sale equity exposures as set forth in Table 6 to § 3.300.
(d)
(2)
For the reasons set out in the joint preamble, part 217 of chapter II of title 12 of the Code of Federal Regulations is proposed to be amended as follows:
12 U.S.C. 248(a), 321-338a, 481-486, 1462a, 1467a, 1818, 1828, 1831n, 1831o, 1831p-l, 1831w, 1835, 1844(b), 1851, 3904, 3906-3909, 4808, 5365, 5368, 5371.
(1) An exposure to a sovereign, the Bank for International Settlements, the European Central Bank, the European Commission, the International Monetary Fund, the European Stability Mechanism, the European Financial Stability Facility, a multi-lateral development bank (MDB), a depository institution, a foreign bank, a credit union, or a public sector entity (PSE);
(2) An exposure to a GSE;
(3) A residential mortgage exposure;
(4) A pre-sold construction loan;
(5) A statutory multifamily mortgage;
(6) A high volatility acquisition, development, or construction (HVADC) exposure or a
(7) A cleared transaction;
(8) A default fund contribution;
(9) A securitization exposure;
(10) An equity exposure; or
(11) An unsettled transaction.
(12) A policy loan; or
(13) A separate account.
(1) A sovereign, the Bank for International Settlements, the International Monetary Fund, the European Central Bank, the European Commission, a Federal Home Loan Bank, Federal Agricultural Mortgage Corporation (Farmer Mac), the European Stability Mechanism, the European Financial Stability Facility, a multilateral development bank (MDB), a depository institution, a bank holding company, a savings and loan holding company, a credit union, a foreign bank, or a qualifying central counterparty; or
(2) An entity (other than a special purpose entity):
(i) That at the time the guarantee is issued or anytime thereafter, has issued and outstanding an unsecured debt security without credit enhancement that is investment grade;
(ii) Whose creditworthiness is not positively correlated with the credit risk of the exposures for which it has provided guarantees; and
(iii) That is not an insurance company engaged predominately in the business of providing credit protection (such as a monoline bond insurer or re-insurer).
(1) Primarily finances or refinances the:
(i) Acquisition of vacant or developed land;
(ii) Development of land to prepare to erect new structures including, but not limited to, the laying of sewers or water pipes and demolishing existing structures; or
(iii) Construction of buildings, dwellings, or other improvements including additions or alterations to existing structures; and
(2) Is not a credit facility that finances or refinances:
(i) One- to four-family residential properties;
(ii) Real property projects that would have the primary purpose of “community development” as defined under [12 CFR part 25 (national bank), 12 CFR part 195 (Federal savings association) (OCC); 12 CFR part 228 (Board); 12 CFR part 345 (FDIC)]; or
(iii) The purchase or development of agricultural land, including, but not limited to, all land used or usable for agricultural purposes (such as crop and livestock production), provided that the valuation of the agricultural land is based on its value for agricultural purposes and the valuation does not take into consideration any potential use of the land for commercial or residential development; and
(3) Is not a permanent loan. A permanent loan for purposes of this definition means a prudently underwritten loan that has a clearly identified ongoing source of repayment sufficient to service amortizing principal and interest payments aside from the sale of the property. For purposes of this section, a permanent loan does not include a loan that finances or refinances a stabilization period or unsold lots or units of for-sale projects.
(1) One- to four-family residential properties;
(2) Real property that:
(i) Would qualify as an investment in community development under 12 U.S.C. 338a or 12 U.S.C. 24 (Eleventh), as applicable, or as a “qualified investment” under 12 CFR part 228, and
(ii) Is not an ADC loan to any entity described in 12 CFR 208.22(a)(3) or 228.12(g)(3), unless it is otherwise described in paragraph (1), (2)(i), (3) or (4) of this definition;
(3) The purchase or development of agricultural land, which includes all land known to be used or usable for agricultural purposes (such as crop and livestock production), provided that the valuation of the agricultural land is based on its value for agricultural purposes and the valuation does not take into consideration any potential use of the land for non-agricultural commercial development or residential development; or
(4) Commercial real estate projects in which:
(i) The loan-to-value ratio is less than or equal to the applicable maximum supervisory loan-to-value ratio in the Board's real estate lending standards at 12 CFR part 208, appendix C;
(ii) The borrower has contributed capital to the project in the form of cash or unencumbered readily marketable assets (or has paid development expenses out-of-pocket) of at least 15 percent of the real estate's appraised “as completed” value; and
(iii) The borrower contributed the amount of capital required by paragraph (4)(ii) of this definition before the Board-regulated institution advances funds under the credit facility, and the capital contributed by the borrower, or internally generated by the project, is contractually required to remain in the project throughout the life of the project. The life of a project concludes only when the credit facility is converted to permanent financing or is sold or paid in full. Permanent financing may be provided by the Board-regulated institution that provided the ADC facility as long as the permanent financing is subject to the Board-regulated institution's underwriting criteria for long-term mortgage loans.
(c) * * *
(4) * * *
(ii) * * *
(H) The credit equivalent amount of all off-balance sheet exposures of the Board-regulated institution, excluding repo-style transactions, repurchase or reverse repurchase or securities borrowing or lending transactions that qualify for sales treatment under U.S. GAAP, and derivative transactions, determined using the applicable credit conversion factor under § 217.33(b), provided, however, that the minimum credit conversion factor that may be assigned to an off-balance sheet exposure under this paragraph is 10 percent; and
(a) * * *
(2) * * *
(i)
(iv)
(3) * * * (i) A Board-regulated institution's capital conservation buffer is equal to the lowest of the following ratios, calculated as of the last day of the previous calendar quarter:
(A) The Board-regulated institution's common equity tier 1 capital ratio minus the Board-regulated institution's minimum common equity tier 1 capital ratio requirement under § 217.10;
(B) The Board-regulated institution's tier 1 capital ratio minus the Board-regulated institution's minimum tier 1 capital ratio requirement under § 217.10; and
(C) The Board-regulated institution's total capital ratio minus the Board-regulated institution's minimum total capital ratio requirement under § 217.10; or
(b) * * *
(4) Any common equity tier 1 minority interest, subject to the limitations in § 217.21.
(c) * * *
(2) Tier 1 minority interest, subject to the limitations in § 217.21, that is not included in the Board-regulated institution's common equity tier 1 capital.
(d) * * *
(2) Total capital minority interest, subject to the limitations set forth in § 217.21, that is not included in the Board-regulated institution's tier 1 capital.
(5) For a Board-regulated institution that makes an AOCI opt-out election (as defined in paragraph (b)(2) of § 217.22), 45 percent of pretax net unrealized gains on available-for-sale preferred stock classified as an equity security under GAAP and available-for-sale equity exposures.
(f) A Board-regulated institution may not repurchase or redeem any common equity tier 1 capital, additional tier 1, or tier 2 capital instrument without the prior approval of the Board.
(a)(1)
(2)
(3)
(4)
(b)(1)
(i) A consolidated subsidiary of the advanced approaches Board-regulated institution has issued regulatory capital that is not owned by the Board-regulated institution; and
(ii) For each relevant regulatory capital ratio of the consolidated subsidiary, the ratio exceeds the sum of the subsidiary's minimum regulatory capital requirements plus its capital conservation buffer.
(2)
(3)
(i) The common equity tier 1 minority interest of the subsidiary; minus
(ii) The percentage of the subsidiary's common equity tier 1 capital that is not owned by the advanced approaches Board-regulated institution, multiplied by the difference between the common equity tier 1 capital of the subsidiary and the lower of:
(A) The amount of common equity tier 1 capital the subsidiary must hold, or would be required to hold pursuant to paragraph (b) of this section, to avoid restrictions on distributions and discretionary bonus payments under § 217.11 or equivalent standards established by the subsidiary's home country supervisor; or
(B)(
(
(4)
(i) The tier 1 minority interest of the subsidiary; minus
(ii) The percentage of the subsidiary's tier 1 capital that is not owned by the advanced approaches Board-regulated
(A) The amount of tier 1 capital the subsidiary must hold, or would be required to hold pursuant to paragraph (b) of this section, to avoid restrictions on distributions and discretionary bonus payments under § 217.11 or equivalent standards established by the subsidiary's home country supervisor, or
(B)(
(
(5)
(i) The total capital minority interest of the subsidiary; minus
(ii) The percentage of the subsidiary's total capital that is not owned by the advanced approaches Board-regulated institution multiplied by the difference between the total capital of the subsidiary and the lower of:
(A) The amount of total capital the subsidiary must hold, or would be required to hold pursuant to paragraph (b) of this section, to avoid restrictions on distributions and discretionary bonus payments under § 217.11 or equivalent standards established by the subsidiary's home country supervisor, or
(B)(
(
(a) * * *
(1) * * *
(i) Goodwill, net of associated deferred tax liabilities (DTLs) in accordance with paragraph (e) of this section; and
(ii) For an advanced approaches Board-regulated institution, goodwill that is embedded in the valuation of a significant investment in the capital of an unconsolidated financial institution in the form of common stock (and that is reflected in the consolidated financial statements of the advanced approaches Board-regulated institution), in accordance with paragraph (d) of this section;
(c)
(1)
(i) A Board-regulated institution must deduct an investment in the Board-regulated institution's own common stock instruments from its common equity tier 1 capital elements to the extent such instruments are not excluded from regulatory capital under § 217.20(b)(1);
(ii) A Board-regulated institution must deduct an investment in the Board-regulated institution's own additional tier 1 capital instruments from its additional tier 1 capital elements; and
(iii) A Board-regulated institution must deduct an investment in the Board-regulated institution's own tier 2 capital instruments from its tier 2 capital elements.
(2)
(i) If an investment is in the form of an instrument issued by a financial institution that is not a regulated financial institution, the Board-regulated institution must treat the instrument as:
(A) A common equity tier 1 capital instrument if it is common stock or represents the most subordinated claim in liquidation of the financial institution; and
(B) An additional tier 1 capital instrument if it is subordinated to all creditors of the financial institution and is senior in liquidation only to common shareholders.
(ii) If an investment is in the form of an instrument issued by a regulated financial institution and the instrument does not meet the criteria for common equity tier 1, additional tier 1 or tier 2 capital instruments under § 217.20, the Board-regulated institution must treat the instrument as:
(A) A common equity tier 1 capital instrument if it is common stock included in GAAP equity or represents the most subordinated claim in liquidation of the financial institution;
(B) An additional tier 1 capital instrument if it is included in GAAP equity, subordinated to all creditors of the financial institution, and senior in a receivership, insolvency, liquidation, or similar proceeding only to common shareholders; and
(C) A tier 2 capital instrument if it is not included in GAAP equity but considered regulatory capital by the primary supervisor of the financial institution.
(iii) If an investment is in the form of a non-qualifying capital instrument (as defined in § 217.300(c)), the Board-regulated institution must treat the instrument as:
(A) An additional tier 1 capital instrument if such instrument was included in the issuer's tier 1 capital prior to May 19, 2010; or
(B) A tier 2 capital instrument if such instrument was included in the issuer's tier 2 capital (but not includable in tier 1 capital) prior to May 19, 2010.
(3)
(4)
(5)
(ii) The amount to be deducted under this section from a specific capital component is equal to:
(A) The advanced approaches Board-regulated institution's non-significant investments in the capital of unconsolidated financial institutions exceeding the 10 percent threshold for non-significant investments, multiplied by
(B) The ratio of the advanced approaches Board-regulated institution's non-significant investments in the capital of unconsolidated financial institutions in the form of such capital component to the advanced approaches Board-regulated institution's total non-significant investments in unconsolidated financial institutions.
(6)
(d)
(1) A Board-regulated institution that is not an advanced approaches Board-regulated institution must make deductions from regulatory capital as described in this paragraph (d)(1).
(i) The Board-regulated institution must deduct from common equity tier 1 capital elements the amount of each of the items set forth in this paragraph (d)(1) that, individually, exceeds 25 percent of the sum of the Board-regulated institution's common equity tier 1 capital elements, less adjustments to and deductions from common equity tier 1 capital required under paragraphs (a) through (c)(3) of this section (the 25 percent common equity tier 1 capital deduction threshold).
(ii) The Board-regulated institution must deduct from common equity tier 1 capital elements the amount of DTAs arising from temporary differences that the Board-regulated institution could not realize through net operating loss carrybacks, net of any related valuation allowances and net of DTLs, in accordance with paragraph (e) of this section. A Board-regulated institution is not required to deduct from the sum of its common equity tier 1 capital elements DTAs (net of any related valuation allowances and net of DTLs, in accordance with § 217.22(e)) arising from timing differences that the Board-regulated institution could realize through net operating loss carrybacks. The Board-regulated institution must risk weight these assets at 100 percent. For a state member bank that is a member of a consolidated group for tax purposes, the amount of DTAs that
(iii) The Board-regulated institution must deduct from common equity tier 1 capital elements the amount of MSAs net of associated DTLs, in accordance with paragraph (e) of this section.
(iv) For purposes of calculating the amount of DTAs subject to deduction pursuant to paragraph (d)(1) of this section, a Board-regulated institution may exclude DTAs and DTLs relating to adjustments made to common equity tier 1 capital under paragraph (b) of this section. A Board-regulated institution that elects to exclude DTAs relating to adjustments under paragraph (b) of this section also must exclude DTLs and must do so consistently in all future calculations. A Board-regulated institution may change its exclusion preference only after obtaining the prior approval of the Board.
(2) An advanced approaches Board-regulated institution must make deductions from regulatory capital as described in this paragraph (d)(2).
(i) An advanced approaches Board-regulated institution must deduct from common equity tier 1 capital elements the amount of each of the items set forth in this paragraph (d)(2) that, individually, exceeds 10 percent of the sum of the advanced approaches Board-regulated institution's common equity tier 1 capital elements, less adjustments to and deductions from common equity tier 1 capital required under paragraphs (a) through (c) of this section (the 10 percent common equity tier 1 capital deduction threshold).
(A) DTAs arising from temporary differences that the advanced approaches Board-regulated institution could not realize through net operating loss carrybacks, net of any related valuation allowances and net of DTLs, in accordance with paragraph (e) of this section. An advanced approaches Board-regulated institution is not required to deduct from the sum of its common equity tier 1 capital elements DTAs (net of any related valuation allowances and net of DTLs, in accordance with § 217.22(e)) arising from timing differences that the advanced approaches Board-regulated institution could realize through net operating loss carrybacks. The advanced approaches Board-regulated institution must risk weight these assets at 100 percent. For a state member bank that is a member of a consolidated group for tax purposes, the amount of DTAs that could be realized through net operating loss carrybacks may not exceed the amount that the state member bank could reasonably expect to have refunded by its parent holding company.
(B) MSAs net of associated DTLs, in accordance with paragraph (e) of this section.
(C) Significant investments in the capital of unconsolidated financial institutions in the form of common stock, net of associated DTLs in accordance with paragraph (e) of this section.
(ii) An advanced approaches Board-regulated institution must deduct from common equity tier 1 capital elements the items listed in paragraph (d)(2)(i) of this section that are not deducted as a result of the application of the 10 percent common equity tier 1 capital deduction threshold, and that, in aggregate, exceed 17.65 percent of the sum of the advanced approaches Board-regulated institution's common equity tier 1 capital elements, minus adjustments to and deductions from common equity tier 1 capital required under paragraphs (a) through (c) of this section, minus the items listed in paragraph (d)(2)(i) of this section (the 15 percent common equity tier 1 capital deduction threshold). Any goodwill that has been deducted under paragraph (a)(1) of this section can be excluded from the significant investments in the capital of unconsolidated financial institutions in the form of common stock.
(iii) For purposes of calculating the amount of DTAs subject to the 10 and 15 percent common equity tier 1 capital deduction thresholds, an advanced approaches Board-regulated institution may exclude DTAs and DTLs relating to adjustments made to common equity tier 1 capital under paragraph (b) of this section. An advanced approaches Board-regulated institution that elects to exclude DTAs relating to adjustments under paragraph (b) of this section also must exclude DTLs and must do so consistently in all future calculations. An advanced approaches Board-regulated institution may change its exclusion preference only after obtaining the prior approval of the Board.
(g)
(h)
(2)
(i) For an equity exposure that is held directly, the adjusted carrying value as that term is defined in § 217.51(b);
(ii) For an exposure that is held directly and is not an equity exposure or a securitization exposure, the exposure amount as that term is defined in § 217.2;
(iii) For an indirect exposure, the Board-regulated institution's carrying value of the investment in the investment fund, provided that, alternatively:
(A) A Board-regulated institution may, with the prior approval of the Board, use a conservative estimate of the amount of its investment in the Board-
(B) A Board-regulated institution may calculate the gross long position for investments in the Board-regulated institution's own capital instruments or investments in the capital of an unconsolidated financial institution by multiplying the Board-regulated institution's carrying value of its investment in the investment fund by either:
(
(
(iv) For a synthetic exposure, the amount of the Board-regulated institution's loss on the exposure if the reference capital instrument were to have a value of zero.
(3)
(i) The maturity of the short position must match the maturity of the long position, or the short position has a residual maturity of at least one year (maturity requirement); or
(ii) For a position that is a trading asset or trading liability (whether on- or off-balance sheet) as reported on the Board-regulated institution's Call Report, for a state member bank, or FR Y-9C, for a bank holding company or savings and loan holding company, as applicable, if the Board-regulated institution has a contractual right or obligation to sell the long position at a specific point in time and the counterparty to the contract has an obligation to purchase the long position if the Board-regulated institution exercises its right to sell, this point in time may be treated as the maturity of the long position such that the maturity of the long position and short position are deemed to match for purposes of the maturity requirement, even if the maturity of the short position is less than one year; and
(iii) For an investment in the Board-regulated institution's own capital instrument under paragraph (c)(1) of this section or an investment in the capital of an unconsolidated financial institution under paragraphs (c) and (d):
(A) A Board-regulated institution may only net a short position against a long position in an investment in the Board-regulated institution's own capital instrument under paragraph (c) of this section if the short position involves no counterparty credit risk.
(B) A gross long position in an investment in the Board-regulated institution's own capital instrument or an investment in the capital of an unconsolidated financial institution resulting from a position in an index may be netted against a short position in the same index. Long and short positions in the same index without maturity dates are considered to have matching maturities.
(C) A short position in an index that is hedging a long cash or synthetic position in an investment in the Board-regulated institution's own capital instrument or an investment in the capital of an unconsolidated financial institution can be decomposed to provide recognition of the hedge. More specifically, the portion of the index that is composed of the same underlying instrument that is being hedged may be used to offset the long position if both the long position being hedged and the short position in the index are reported as a trading asset or trading liability (whether on- or off-balance sheet) on the Board-regulated institution's Call Report, for a state member bank, or FR Y-9C, for a bank holding company or savings and loan holding company, as applicable, and the hedge is deemed effective by the Board-regulated institution's internal control processes, which have not been found to be inadequate by the Board.
(b)
(d)
(2)
(ii) A Board-regulated institution must assign a 20 percent risk weight to an exposure to a foreign bank whose home country is a member of the OECD and does not have a CRC.
(iii) A Board-regulated institution must assign a 20 percent risk-weight to an exposure that is a self-liquidating, trade-related contingent item that arises from the movement of goods and that has a maturity of three months or less to a foreign bank whose home country has a CRC of 0, 1, 2, or 3, or is an OECD member with no CRC.
(iv) A Board-regulated institution must assign a 100 percent risk weight to an exposure to a foreign bank whose home country is not a member of the OECD and does not have a CRC, with the exception of self-liquidating, trade-related contingent items that arise from the movement of goods, and that have a maturity of three months or less, which may be assigned a 20 percent risk weight.
(v) A Board-regulated institution must assign a 150 percent risk weight to an exposure to a foreign bank immediately upon determining that an event of sovereign default has occurred in the bank's home country, or if an event of sovereign default has occurred in the foreign bank's home country during the previous five years.
(3) * * *
(ii) A significant investment in the capital of an unconsolidated financial institution in the form of common stock pursuant to § 217.22(d)(2)(1)(c);
(iii) and (iv) * * *
(j)(1)
(2)
(k) Past due exposures. Except for an exposure to a sovereign entity or a residential mortgage exposure or a policy loan, if an exposure is 90 days or more past due or on nonaccrual:
(1) A Board-regulated institution must assign a 150 percent risk weight to the portion of the exposure that is not guaranteed or that is unsecured;
(2) A Board-regulated institution may assign a risk weight to the guaranteed portion of a past due exposure based on the risk weight that applies under § 217.36 if the guarantee or credit derivative meets the requirements of that section; and
(3) A Board-regulated institution may assign a risk weight to the collateralized portion of a past due exposure based on the risk weight that applies under § 217.37 if the collateral meets the requirements of that section.
(l) Other assets. (1)(i) A bank holding company or savings and loan holding company must assign a zero percent risk weight to cash owned and held in all offices of subsidiary depository institutions or in transit, and to gold bullion held in a subsidiary depository institution's own vaults, or held in another depository institution's vaults on an allocated basis, to the extent the gold bullion assets are offset by gold bullion liabilities.
(ii) A state member bank must assign a zero percent risk weight to cash owned and held in all offices of the state member bank or in transit; to gold bullion held in the state member bank's own vaults or held in another depository institution's vaults on an allocated basis, to the extent the gold bullion assets are offset by gold bullion liabilities; and to exposures that arise from the settlement of cash transactions (such as equities, fixed income, spot foreign exchange and spot commodities) with a central counterparty where there is no assumption of ongoing counterparty credit risk by the central counterparty after settlement of the trade and associated default fund contributions.
(2) A Board-regulated institution must assign a 20 percent risk weight to cash items in the process of collection.
(3) A Board-regulated institution must assign a 100 percent risk weight to DTAs arising from temporary differences that the Board-regulated institution could realize through net operating loss carrybacks.
(4) A Board-regulated institution must assign a 250 percent risk weight to the portion of each of the following items to the extent it is not deducted from common equity tier 1 capital pursuant to § 217.22(d):
(i) MSAs; and
(ii) DTAs arising from temporary differences that the Board-regulated institution could not realize through net operating loss carrybacks.
(5) A Board-regulated institution must assign a 100 percent risk weight to all assets not specifically assigned a different risk weight under this subpart and that are not deducted from tier 1 or tier 2 capital pursuant to § 217.22.
(6) Notwithstanding the requirements of this section, a state member bank may assign an asset that is not included in one of the categories provided in this section to the risk weight category applicable under the capital rules applicable to bank holding companies and savings and loan holding companies under this part, provided that all of the following conditions apply:
(i) The Board-regulated institution is not authorized to hold the asset under applicable law other than debt previously contracted or similar authority; and
(ii) The risks associated with the asset are substantially similar to the risks of assets that are otherwise assigned to a risk weight category of less than 100 percent under this subpart.
(c)
(2)
(ii) The provisions of this paragraph (c)(2) apply to all relevant counterparties for risk-based capital purposes unless the Board-regulated institution is treating the OTC credit derivative as a covered position under subpart F, in which case the Board-regulated institution must compute a supplemental counterparty credit risk capital requirement under this section.
(b) * * *
(3) * * *
(ii) For a cleared transaction with a CCP that is not a QCCP, a clearing member client Board-regulated institution must apply the risk weight appropriate for the CCP according to this subpart D.
(4) * * *
(ii) A clearing member client Board-regulated institution must calculate a risk-weighted asset amount for any collateral provided to a CCP, clearing member, or custodian in connection with a cleared transaction in accordance with the requirements under this subpart D.
(c) * * *
(3) * * *
(ii) For a cleared transaction with a CCP that is not a QCCP, a clearing member Board-regulated institution must apply the risk weight appropriate for the CCP according to this subpart D.
(4) * * *
(ii) A clearing member Board-regulated institution must calculate a risk-weighted asset amount for any collateral provided to a CCP, clearing member, or a custodian in connection with a cleared transaction in accordance with requirements under this subpart D.
(c)
(2)
(i) The Board-regulated institution may calculate the risk-weighted asset amount for the protected exposure under this subpart D, where the applicable risk weight is the risk weight applicable to the guarantor or credit derivative protection provider.
(ii) The Board-regulated institution must calculate the risk-weighted asset amount for the unprotected exposure under this subpart D, where the applicable risk weight is that of the unprotected portion of the hedged exposure.
(iii) The treatment provided in this section is applicable when the credit risk of an exposure is covered on a partial pro rata basis and may be applicable when an adjustment is made to the effective notional amount of the guarantee or credit derivative under paragraphs (d), (e), or (f) of this section.
(b) * * *
(2) * * * (i) A Board-regulated institution may apply a risk weight to the portion of an exposure that is secured by the fair value of financial collateral (that meets the requirements of paragraph (b)(1) of this section) based on the risk weight assigned to the collateral under this subpart D. For repurchase agreements, reverse repurchase agreements, and securities lending and borrowing transactions, the collateral is the instruments, gold, and cash the Board-regulated institution has borrowed, purchased subject to resale, or taken as collateral from the counterparty under the transaction. Except as provided in paragraph (b)(3) of this section, the risk weight assigned to the collateralized portion of the exposure may not be less than 20 percent.
(e) * * *
(2) From the business day after the Board-regulated institution has made its delivery until five business days after the counterparty delivery is due, the Board-regulated institution must calculate the risk-weighted asset amount for the transaction by treating the current fair value of the deliverables owed to the Board-regulated institution as an exposure to the counterparty and using the applicable counterparty risk weight under this subpart D.
(j) * * *
(2) * * *
(ii) * * *
(A) If the Board-regulated institution purchases credit protection from a counterparty that is not a securitization SPE, the Board-regulated institution must determine the risk weight for the exposure according to this subpart D.
(b) * * *
(1)
(4)
(5) through (7) (ii) * * *
Sections 217.61 through 217.63 of this subpart establish public disclosure requirements related to the capital requirements described in subpart B of this part for a Board-regulated institution with total consolidated assets of $50 billion or more as reported on the Board-regulated institution's most recent year-end Call Report, for a state member bank, or FR Y-9C, for a bank holding company or savings and loan holding company, as applicable that is not an advanced approaches Board-regulated institution making public disclosures pursuant to § 217.172. An advanced approaches Board-regulated institution that has not received approval from the Board to exit parallel run pursuant to § 217.121(d) is subject to the disclosure requirements described in §§ 217.62 and 217.63. A Board-regulated institution with total consolidated assets of $50 billion or more as reported on the Board-regulated institution's most recent year-end Call Report, for a state member bank, or FR Y-9C, for a bank holding company or savings and loan holding company, as applicable, that is not an advanced approaches Board-regulated institution making public disclosures subject to § 217.172 must comply with § 217.62 unless it is a consolidated subsidiary of a bank holding company, savings and loan holding company, or depository institution that is subject to the disclosure requirements of § 217.62 or a subsidiary of a non-U.S. banking organization that is subject to comparable public disclosure requirements in its home jurisdiction. For purposes of this section, total consolidated assets are determined based on the average of the Board-regulated institution's total consolidated assets in the four most recent quarters as reported on the Call Report, for a state member bank, or FR Y-9C, for a bank holding company or savings and loan holding company, as applicable; or
(b) * * *
(1) One- to four-family residential properties;
(2) Real property that:
(i) Would qualify as an investment in community development under 12 U.S.C. 338a or 12 U.S.C. 24 (Eleventh), as applicable, or as a “qualified investment” under 12 CFR part 228, and
(ii) Is not an ADC loan to any entity described in 12 CFR 208.22(a)(3) or 228.12(g)(3), unless it is otherwise described in paragraph (1), (2)(i), (3) or (4) of this definition;
(3) The purchase or development of agricultural land, which includes all land known to be used or usable for agricultural purposes (such as crop and livestock production), provided that the valuation of the agricultural land is based on its value for agricultural purposes and the valuation does not take into consideration any potential use of the land for non-agricultural commercial development or residential development; or
(4) Commercial real estate projects in which:
(i) The loan-to-value ratio is less than or equal to the applicable maximum supervisory loan-to-value ratio in the Board's real estate lending standards at 12 CFR part 208, appendix C;
(ii) The borrower has contributed capital to the project in the form of cash or unencumbered readily marketable assets (or has paid development expenses out-of-pocket) of at least 15 percent of the real estate's appraised “as completed” value; and
(iii) The borrower contributed the amount of capital required by paragraph (4)(ii) of this definition before the Board-regulated institution advances funds under the credit facility, and the capital contributed by the borrower, or internally generated by the project, is contractually required to remain in the project throughout the life of the project. The life of a project concludes only when the credit facility is converted to permanent financing or is sold or paid in full. Permanent financing may be provided by the Board-regulated institution that provided the ADC facility as long as the permanent financing is subject to the Board-regulated institution's underwriting criteria for long-term mortgage loans.
(d) * * *
(2)
(b) * * *
(3) * * *
(ii) For a cleared transaction with a CCP that is not a QCCP, a clearing member client Board-regulated institution must apply the risk weight applicable to the CCP under subpart D of this part.
(c) * * *
(3) * * *
(ii) For a cleared transaction with a CCP that is not a QCCP, a clearing member Board-regulated institution must apply the risk weight applicable to the CCP according to subpart D of this part.
(b) * * *
(5)
(6)
(b) * * *
(b) * * *
(2) * * *
(ii)
(vii) * * * (A) General requirements. (
(
(
(b)
(1)
(i) A Board-regulated institution must deduct the following items from common equity tier 1 and additional tier 1 capital in accordance with the percentages set forth in Table 2 to § 217.300: Goodwill (§ 217.22(a)(1)), DTAs that arise from net operating loss and tax credit carryforwards (§ 217.22(a)(3)), a gain-on-sale in connection with a securitization exposure (§ 217.22(a)(4)), defined benefit pension fund assets (§ 217.22(a)(5)), expected credit loss that exceeds eligible credit reserves (for advanced approaches Board-regulated institutions that have completed the parallel run process and that have received notifications from the Board pursuant to § 217.121(d) of subpart E) (§ 217.22(a)(6)), and financial subsidiaries (§ 217.22(a)(7)).
(ii) A Board-regulated institution must deduct from common equity tier 1 capital any intangible assets other than goodwill and MSAs in accordance with the percentages set forth in Table 3 to § 217.300.
(iii) A Board-regulated institution must apply a 100 percent risk-weight to the aggregate amount of intangible assets other than goodwill and MSAs that are not required to be deducted from common equity tier 1 capital under this section.
(2)
(i) If the aggregate amount of the adjustment is positive, the Board-regulated institution must allocate the deduction between common equity tier 1 and tier 1 capital in accordance with Table 4 to § 217.300.
(ii) If the aggregate amount of the adjustment is negative, the Board-regulated institution must add back the adjustment to common equity tier 1 capital or to tier 1 capital, in accordance with Table 4 to § 217.300.
(3)
(i) The transition AOCI adjustment amount is the aggregate amount of a Board-regulated institution's:
(A) Unrealized gains on available-for-sale securities that are preferred stock classified as an equity security under GAAP or available-for-sale equity exposures, plus
(B) Net unrealized gains or losses on available-for-sale securities that are not preferred stock classified as an equity security under GAAP or available-for-sale equity exposures, plus
(C) Any amounts recorded in AOCI attributed to defined benefit postretirement plans resulting from the initial and subsequent application of the relevant GAAP standards that pertain to such plans (excluding, at the Board-regulated institution's option, the portion relating to pension assets deducted under section 22(a)(5)), plus
(D) Accumulated net gains or losses on cash flow hedges related to items that are reported on the balance sheet at fair value included in AOCI, plus
(E) Net unrealized gains or losses on held-to-maturity securities that are included in AOCI.
(ii) A Board-regulated institution must make the following adjustment to its common equity tier 1 capital:
(A) If the transition AOCI adjustment amount is positive, the appropriate amount must be deducted from common equity tier 1 capital in accordance with Table 5 to § 217.300.
(B) If the transition AOCI adjustment amount is negative, the appropriate amount must be added back to common equity tier 1 capital in accordance with Table 5 to § 217.300.
(iii) A Board-regulated institution may include in tier 2 capital the percentage of unrealized gains on available-for-sale preferred stock classified as an equity security under GAAP and available-for-sale equity exposures as set forth in Table 6 to § 217.300.
(c) * * *
(2)
(ii) If a depository institution holding company under $15 billion acquires after December 31, 2013 a depository institution holding company under $15 billion or a 2010 MHC, and the resulting organization has total consolidated assets of $15 billion or more as reported on the resulting organization's FR Y-9C for the period in which the transaction occurred, the resulting organization may include in regulatory capital non-qualifying instruments of the resulting organization up to the applicable percentages set forth in Table 8 to § 217.300.
(3)
(ii) Non-qualifying capital instruments includable in tier 1 capital are subject to a limit of 25 percent of tier 1 capital elements, excluding any non-qualifying capital instruments and after applying all regulatory capital deductions and adjustments to tier 1 capital.
(iii) Non-qualifying capital instruments that are not included in tier 1 as a result of the limitation in paragraph (c)(3)(ii) of this section are includable in tier 2 capital.
(d) * * *
(1) [Reserved]
(2)
For the reasons set out in the joint preamble, the FDIC proposes to amend 12 CFR part 324 as follows.
12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b), 1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n), 1828(o), 1831o, 1835, 3907, 3909, 4808; 5371; 5412; Pub. L. 102-233, 105 Stat. 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub. L. 102-242, 105 Stat. 2236, 2355, as amended by Pub. L. 103-325, 108 Stat. 2160, 2233 (12 U.S.C. 1828 note); Pub. L. 102-242, 105 Stat. 2236, 2386, as amended by Pub. L. 102-550, 106 Stat. 3672, 4089 (12 U.S.C. 1828 note); Pub. L. 111-203, 124 Stat. 1376, 1887 (15 U.S.C. 78o-7 note).
(1) An exposure to a sovereign, the Bank for International Settlements, the European Central Bank, the European Commission, the International Monetary Fund, the European Stability Mechanism, the European Financial Stability Facility, a multi-lateral development bank (MDB), a depository institution, a foreign bank, a credit union, or a public sector entity (PSE);
(2) An exposure to a GSE;
(3) A residential mortgage exposure;
(4) A pre-sold construction loan;
(5) A statutory multifamily mortgage;
(6) A high volatility acquisition, development, or construction (HVADC) exposure or a
(7) A cleared transaction;
(8) A default fund contribution;
(9) A securitization exposure;
(10) An equity exposure; or
(11) An unsettled transaction.
(1) A sovereign, the Bank for International Settlements, the International Monetary Fund, the European Central Bank, the European Commission, a Federal Home Loan Bank, Federal Agricultural Mortgage Corporation (Farmer Mac), the European Stability Mechanism, the European Financial Stability Facility, a multilateral development bank (MDB), a depository institution, a bank holding company, a savings and loan holding company, a credit union, a foreign bank, or a qualifying central counterparty; or
(2) An entity (other than a special purpose entity):
(i) That at the time the guarantee is issued or anytime thereafter, has issued and outstanding an unsecured debt security without credit enhancement that is investment grade;
(ii) Whose creditworthiness is not positively correlated with the credit risk of the exposures for which it has provided guarantees; and
(iii) That is not an insurance company engaged predominately in the business of providing credit protection (such as a monoline bond insurer or re-insurer).
(1) Primarily finances or refinances the:
(i) Acquisition of vacant or developed land;
(ii) Development of land to prepare to erect new structures including, but not limited to, the laying of sewers or water pipes and demolishing existing structures; or
(iii) Construction of buildings, dwellings, or other improvements including additions or alterations to existing structures; and
(2) Is not a credit facility that finances or refinances:
(i) One- to four-family residential properties;
(ii) Real property projects that would have the primary purpose of “community development” as defined under 12 CFR part 25 (national bank), 12 CFR part 195 (Federal savings association) (OCC); 12 CFR part 228 (Board); 12 CFR part 345 (FDIC); or
(iii) The purchase or development of agricultural land, including, but not limited to, all land used or usable for agricultural purposes (such as crop and livestock production), provided that the valuation of the agricultural land is based on its value for agricultural purposes and the valuation does not take into consideration any potential use of the land for commercial or residential development; and
(3) Is not a permanent loan. A permanent loan for purposes of this definition means a prudently underwritten loan that has a clearly identified ongoing source of repayment sufficient to service amortizing principal and interest payments aside from the sale of the property. For purposes of this section, a permanent loan does not include a loan that finances or refinances a stabilization period or unsold lots or units of for-sale projects.
(1) One- to four-family residential properties;
(2) Real property that:
(i) Would qualify as an investment in community development under 12 U.S.C. 338a or 12 U.S.C. 24 (Eleventh), as applicable, or as a “qualified investment” under 12 CFR part 345, and
(ii) Is not an ADC loan to any entity described in 12 CFR 345.12(g)(3), unless it is otherwise described in paragraph (1), (2)(i), (3) or (4) of this definition;
(3) The purchase or development of agricultural land, which includes all land known to be used or usable for agricultural purposes (such as crop and livestock production), provided that the valuation of the agricultural land is based on its value for agricultural purposes and the valuation does not take into consideration any potential use of the land for non-agricultural commercial development or residential development; or
(4) Commercial real estate projects in which:
(i) The loan-to-value ratio is less than or equal to the applicable maximum supervisory loan-to-value ratio in the FDIC's real estate lending standards at 12 CFR part 365, subpart A (state non-member banks), 12 CFR 390.264 and 390.265 (state savings associations);
(ii) The borrower has contributed capital to the project in the form of cash or unencumbered readily marketable assets (or has paid development expenses out-of-pocket) of at least 15 percent of the real estate's appraised “as completed” value; and
(iii) The borrower contributed the amount of capital required by paragraph (4)(ii) of this definition before the FDIC-supervised institution advances funds under the credit facility, and the capital contributed by the borrower, or internally generated by the project, is contractually required to remain in the project throughout the life of the project. The life of a project concludes only when the credit facility is converted to permanent financing or is sold or paid in full. Permanent financing may be provided by the FDIC-supervised institution that provided the ADC facility as long as the permanent financing is subject to the FDIC-supervised institution's underwriting criteria for long-term mortgage loans.
(c) * * *
(4) * * *
(ii) * * *
(H) The credit equivalent amount of all off-balance sheet exposures of the FDIC-supervised institution, excluding repo-style transactions, repurchase or reverse repurchase or securities borrowing or lending transactions that qualify for sales treatment under U.S. GAAP, and derivative transactions, determined using the applicable credit conversion factor under § 324.33(b), provided, however, that the minimum credit conversion factor that may be assigned to an off-balance sheet exposure under this paragraph is 10 percent; and
(a) * * *
(2) * * *
(i)
(iv)
(3)
(A) The FDIC-supervised institution's common equity tier 1 capital ratio minus the FDIC-supervised institution's minimum common equity tier 1 capital ratio requirement under § 324.10;
(B) The FDIC-supervised institution's tier 1 capital ratio minus the FDIC-supervised institution's minimum tier 1 capital ratio requirement under § 324.10; and
(C) The FDIC-supervised institution's total capital ratio minus the FDIC-supervised institution's minimum total capital ratio requirement under § 324.10; or
(b) * * *
(4) Any common equity tier 1 minority interest, subject to the limitations in § 324.21.
(c) * * *
(1) * * *
(viii) Any cash dividend payments on the instrument are paid out of the FDIC-supervised institution's net income or retained earnings. An FDIC-supervised institution must obtain prior FDIC approval for any dividend payment involving a reduction or retirement of capital stock in accordance with 12 CFR 303.241.
(2) Tier 1 minority interest, subject to the limitations in § 324.21, that is not included in the FDIC-supervised institution's common equity tier 1 capital.
(d) * * *
(2) Total capital minority interest, subject to the limitations set forth in § 324.21, that is not included in the FDIC-supervised institution's tier 1 capital.
(a) (1)
(2)
(3)
(4)
(b) (1)
(i) A consolidated subsidiary of the advanced approaches FDIC-supervised institution has issued regulatory capital that is not owned by the FDIC-supervised institution; and
(ii) For each relevant regulatory capital ratio of the consolidated subsidiary, the ratio exceeds the sum of the subsidiary's minimum regulatory capital requirements plus its capital conservation buffer.
(2)
(3)
(i) The common equity tier 1 minority interest of the subsidiary; minus
(ii) The percentage of the subsidiary's common equity tier 1 capital that is not owned by the advanced approaches FDIC-supervised institution, multiplied by the difference between the common equity tier 1 capital of the subsidiary and the lower of:
(A) The amount of common equity tier 1 capital the subsidiary must hold, or would be required to hold pursuant to paragraph (b) of this section, to avoid restrictions on distributions and discretionary bonus payments under § 324.11 or equivalent standards established by the subsidiary's home country supervisor; or
(B)(
(
(4)
(i) The tier 1 minority interest of the subsidiary; minus
(ii) The percentage of the subsidiary's tier 1 capital that is not owned by the advanced approaches FDIC-supervised institution multiplied by the difference between the tier 1 capital of the subsidiary and the lower of:
(A) The amount of tier 1 capital the subsidiary must hold, or would be required to hold pursuant to paragraph (b) of this section, to avoid restrictions on distributions and discretionary bonus payments under § 324.11 or equivalent standards established by the subsidiary's home country supervisor, or
(B)(
(
(5)
(i) The total capital minority interest of the subsidiary; minus
(ii) The percentage of the subsidiary's total capital that is not owned by the advanced approaches FDIC-supervised institution multiplied by the difference between the total capital of the subsidiary and the lower of:
(A) The amount of total capital the subsidiary must hold, or would be required to hold pursuant to paragraph (b) of this section, to avoid restrictions on distributions and discretionary bonus payments under § 324.11 or equivalent standards established by the subsidiary's home country supervisor, or
(B)(
(
(a) * * *
(1)(i) Goodwill, net of associated deferred tax liabilities (DTLs) in accordance with paragraph (e) of this section; and
(ii) For an advanced approaches FDIC-supervised institution, goodwill that is embedded in the valuation of a significant investment in the capital of an unconsolidated financial institution in the form of common stock (and that is reflected in the consolidated financial statements of the advanced approaches FDIC-supervised institution), in accordance with paragraph (d) of this section;
(c)
(1)
(i) An FDIC-supervised institution must deduct an investment in the FDIC-supervised institution's own common stock instruments from its common equity tier 1 capital elements to the extent such instruments are not excluded from regulatory capital under § 324.20(b)(1);
(ii) An FDIC-supervised institution must deduct an investment in the FDIC-supervised institution's own additional tier 1 capital instruments from its additional tier 1 capital elements; and
(iii) An FDIC-supervised institution must deduct an investment in the FDIC-supervised institution's own tier 2 capital instruments from its tier 2 capital elements.
(2)
(i) If an investment is in the form of an instrument issued by a financial institution that is not a regulated financial institution, the FDIC-supervised institution must treat the instrument as:
(A) A common equity tier 1 capital instrument if it is common stock or represents the most subordinated claim in liquidation of the financial institution; and
(B) An additional tier 1 capital instrument if it is subordinated to all creditors of the financial institution and is senior in liquidation only to common shareholders.
(ii) If an investment is in the form of an instrument issued by a regulated financial institution and the instrument does not meet the criteria for common equity tier 1, additional tier 1 or tier 2 capital instruments under § 324.20, the FDIC-supervised institution must treat the instrument as:
(A) A common equity tier 1 capital instrument if it is common stock included in GAAP equity or represents the most subordinated claim in liquidation of the financial institution;
(B) An additional tier 1 capital instrument if it is included in GAAP equity, subordinated to all creditors of the financial institution, and senior in a receivership, insolvency, liquidation, or similar proceeding only to common shareholders; and
(C) A tier 2 capital instrument if it is not included in GAAP equity but considered regulatory capital by the primary supervisor of the financial institution.
(iii) If an investment is in the form of a non-qualifying capital instrument (as defined in § 324.300(c)), the FDIC-supervised institution must treat the instrument as:.
(A) An additional tier 1 capital instrument if such instrument was included in the issuer's tier 1 capital prior to May 19, 2010; or
(B) A tier 2 capital instrument if such instrument was included in the issuer's tier 2 capital (but not includable in tier 1 capital) prior to May 19, 2010.
(3)
(4)
(5)
(ii) The amount to be deducted under this section from a specific capital component is equal to:
(A) The advanced approaches FDIC-supervised institution's non-significant investments in the capital of unconsolidated financial institutions exceeding the 10 percent threshold for non-significant investments, multiplied by
(B) The ratio of the advanced approaches FDIC-supervised institution's non-significant investments in the capital of unconsolidated financial institutions in the form of such capital component to the advanced approaches FDIC-supervised institution's total non-significant investments in unconsolidated financial institutions.
(6)
(d)
(1) An FDIC-supervised institution that is not an advanced approaches FDIC-supervised institution must make deductions from regulatory capital as described in this paragraph (d)(1).
(i) The FDIC-supervised institution must deduct from common equity tier 1 capital elements the amount of each of the items set forth in this paragraph (d)(1) that, individually, exceeds 25 percent of the sum of the FDIC-supervised institution's common equity tier 1 capital elements, less adjustments to and deductions from common equity tier 1 capital required under paragraphs (a) through (c)(3) of this section (the 25 percent common equity tier 1 capital deduction threshold).
(ii) The FDIC-supervised institution must deduct from common equity tier 1 capital elements, as set forth in (d)(1), the amount of DTAs arising from temporary differences that the FDIC-supervised institution could not realize through net operating loss carrybacks, net of any related valuation allowances and net of DTLs, in accordance with paragraph (e) of this section. An FDIC-supervised institution is not required to deduct from the sum of its common equity tier 1 capital elements DTAs (net of any related valuation allowances and net of DTLs, in accordance with § 324.22(e)) arising from timing differences that the FDIC-supervised institution could realize through net operating loss carrybacks. The FDIC-supervised institution must risk weight these assets at 100 percent. For an FDIC-supervised institution that is a member of a consolidated group for tax purposes, the amount of DTAs that could be realized through net operating loss carrybacks may not exceed the amount that the FDIC-supervised institution could reasonably expect to have refunded by its parent holding company.
(iii) The FDIC-supervised institution must deduct from common equity tier 1 capital elements the amount of MSAs net of associated DTLs, in accordance with paragraph (e) of this section.
(iv) For purposes of calculating the amount of DTAs subject to deduction pursuant to paragraph (d)(1) of this section, an FDIC-supervised institution may exclude DTAs and DTLs relating to adjustments made to common equity tier 1 capital under paragraph (b) of this section. An FDIC-supervised institution that elects to exclude DTAs relating to adjustments under paragraph (b) of this section also must exclude DTLs and must do so consistently in all future calculations. An FDIC-supervised institution may change its exclusion preference only after obtaining the prior approval of the FDIC.
(2) An advanced approaches FDIC-supervised institution must make deductions from regulatory capital as described in this paragraph (d)(2).
(i) An advanced approaches FDIC-supervised institution must deduct from common equity tier 1 capital elements the amount of each of the items set forth in this paragraph (d)(2) that, individually, exceeds 10 percent of the sum of the advanced approaches FDIC-supervised institution's common equity tier 1 capital elements, less adjustments to and deductions from common equity tier 1 capital required under paragraphs (a) through (c) of this section (the 10 percent common equity tier 1 capital deduction threshold).
(A) DTAs arising from temporary differences that the advanced approaches FDIC-supervised institution could not realize through net operating loss carrybacks, net of any related valuation allowances and net of DTLs, in accordance with paragraph (e) of this section. An advanced approaches FDIC-supervised institution is not required to deduct from the sum of its common equity tier 1 capital elements DTAs (net of any related valuation allowances and net of DTLs, in accordance with § 324.22(e)) arising from timing differences that the advanced approaches FDIC-supervised institution could realize through net operating loss carrybacks. The advanced approaches FDIC-supervised institution must risk weight these assets at 100 percent. For an FDIC-supervised institution that is a member of a consolidated group for tax purposes, the amount of DTAs that could be realized through net operating loss carrybacks may not exceed the amount that the FDIC-supervised institution could reasonably expect to have refunded by its parent holding company.
(B) MSAs net of associated DTLs, in accordance with paragraph (e) of this section.
(C) Significant investments in the capital of unconsolidated financial institutions in the form of common stock, net of associated DTLs in accordance with paragraph (e) of this section.
(ii) An advanced approaches FDIC-supervised institution must deduct from common equity tier 1 capital elements the items listed in paragraph (d)(2)(i) of this section that are not deducted as a result of the application of the 10 percent common equity tier 1 capital deduction threshold, and that, in aggregate, exceed 17.65 percent of the sum of the advanced approaches FDIC-supervised institution's common equity tier 1 capital elements, minus adjustments to and deductions from common equity tier 1 capital required under paragraphs (a) through (c) of this section, minus the items listed in paragraph (d)(2)(i) of this section (the 15 percent common equity tier 1 capital deduction threshold). Any goodwill that has been deducted under paragraph (a)(1) of this section can be excluded from the significant investments in the capital of unconsolidated financial institutions in the form of common stock.
(iii) For purposes of calculating the amount of DTAs subject to the 10 and 15 percent common equity tier 1 capital deduction thresholds, an advanced approaches FDIC-supervised institution may exclude DTAs and DTLs relating to adjustments made to common equity tier 1 capital under paragraph (b) of this section. An advanced approaches FDIC-supervised institution that elects to exclude DTAs relating to adjustments under paragraph (b) of this section also must exclude DTLs and must do so consistently in all future calculations. An advanced approaches FDIC-supervised institution may change its exclusion preference only after obtaining the prior approval of the FDIC.
(g)
(h)
(2)
(i) For an equity exposure that is held directly, the adjusted carrying value as that term is defined in § 324.51(b);
(ii) For an exposure that is held directly and is not an equity exposure or a securitization exposure, the exposure amount as that term is defined in § 324.2;
(iii) For an indirect exposure, the FDIC-supervised institution's carrying value of the investment in the investment fund, provided that, alternatively:
(A) An FDIC-supervised institution may, with the prior approval of the FDIC, use a conservative estimate of the amount of its investment in the FDIC-supervised institution's own capital instruments or its investment in the capital of an unconsolidated financial institution held through a position in an index; or
(B) An FDIC-supervised institution may calculate the gross long position for investments in the FDIC-supervised institution's own capital instruments or investments in the capital of an unconsolidated financial institution by multiplying the FDIC-supervised institution's carrying value of its investment in the investment fund by either:
(
(
(iv) For a synthetic exposure, the amount of the FDIC-supervised institution's loss on the exposure if the reference capital instrument were to have a value of zero.
(3)
(i) The maturity of the short position must match the maturity of the long position, or the short position has a residual maturity of at least one year (maturity requirement); or
(ii) For a position that is a trading asset or trading liability (whether on- or off-balance sheet) as reported on the FDIC-supervised institution's Call Report if the FDIC-supervised institution has a contractual right or obligation to sell the long position at a specific point in time and the counterparty to the contract has an obligation to purchase the long position if the FDIC-supervised institution exercises its right to sell, this point in time may be treated as the maturity of the long position such that the maturity of the long position and short position are deemed to match for purposes of the maturity requirement, even if the maturity of the short position is less than one year; and
(iii) For an investment in the FDIC-supervised institution's own capital instrument under paragraph (c)(1) of this section or an investment in the capital of an unconsolidated financial institution under paragraphs (c) and (d):
(A) An FDIC-supervised institution may only net a short position against a long position in an investment in the FDIC-supervised institution's own capital instrument under paragraph (c) of this section if the short position involves no counterparty credit risk.
(B) A gross long position in an investment in the FDIC-supervised institution's own capital instrument or an investment in the capital of an unconsolidated financial institution resulting from a position in an index may be netted against a short position in the same index. Long and short positions in the same index without maturity dates are considered to have matching maturities.
(C) A short position in an index that is hedging a long cash or synthetic
(b)
(d) * * *
(2)
(ii) An FDIC-supervised institution must assign a 20 percent risk weight to an exposure to a foreign bank whose home country is a member of the OECD and does not have a CRC.
(iii) An FDIC-supervised institution must assign a 20 percent risk-weight to an exposure that is a self-liquidating, trade-related contingent item that arises from the movement of goods and that has a maturity of three months or less to a foreign bank whose home country has a CRC of 0, 1, 2, or 3, or is an OECD member with no CRC.
(iv) An FDIC-supervised institution must assign a 100 percent risk weight to an exposure to a foreign bank whose home country is not a member of the OECD and does not have a CRC, with the exception of self-liquidating, trade-related contingent items that arise from the movement of goods, and that have a maturity of three months or less, which may be assigned a 20 percent risk weight.
(v) An FDIC-supervised institution must assign a 150 percent risk weight to an exposure to a foreign bank immediately upon determining that an event of sovereign default has occurred in the bank's home country, or if an event of sovereign default has occurred in the foreign bank's home country during the previous five years.
(3) * * *
(ii) A significant investment in the capital of an unconsolidated financial institution in the form of common stock pursuant to § 324.22(d)(2)(i)(c);
(j)(1)
(2)
(k)
(1) An FDIC-supervised institution must assign a 150 percent risk weight to the portion of the exposure that is not guaranteed or that is unsecured;
(2) An FDIC-supervised institution may assign a risk weight to the guaranteed portion of a past due exposure based on the risk weight that applies under § 324.36 if the guarantee or credit derivative meets the requirements of that section; and
(3) An FDIC-supervised institution may assign a risk weight to the collateralized portion of a past due exposure based on the risk weight that applies under § 324.37 if the collateral meets the requirements of that section.
(l)
(2) An FDIC-supervised institution must assign a 20 percent risk weight to cash items in the process of collection.
(3) An FDIC-supervised institution must assign a 100 percent risk weight to DTAs arising from temporary differences that the FDIC-supervised institution could realize through net operating loss carrybacks.
(4) An FDIC-supervised institution must assign a 250 percent risk weight to the portion of each of the following items to the extent it is not deducted from common equity tier 1 capital pursuant to § 324.22(d):
(i) MSAs; and
(ii) DTAs arising from temporary differences that the FDIC-supervised institution could not realize through net operating loss carrybacks.
(5) An FDIC-supervised institution must assign a 100 percent risk weight to all assets not specifically assigned a different risk weight under this subpart and that are not deducted from tier 1 or tier 2 capital pursuant to § 324.22.
(6) Notwithstanding the requirements of this section, an FDIC-supervised institution may assign an asset that is not included in one of the categories provided in this section to the risk weight category applicable under the capital rules applicable to bank holding companies and savings and loan holding companies under 12 CFR part 217, provided that all of the following conditions apply:
(i) The FDIC-supervised institution is not authorized to hold the asset under applicable law other than debt previously contracted or similar authority; and
(ii) The risks associated with the asset are substantially similar to the risks of assets that are otherwise assigned to a
(c)
(2)
(ii) The provisions of this paragraph (c)(2) apply to all relevant counterparties for risk-based capital purposes unless the FDIC-supervised institution is treating the OTC credit derivative as a covered position under subpart F, in which case the FDIC-supervised institution must compute a supplemental counterparty credit risk capital requirement under this section.
(b) * * *
(3) * * *
(ii) For a cleared transaction with a CCP that is not a QCCP, a clearing member client FDIC-supervised institution must apply the risk weight appropriate for the CCP according to this subpart D.
(4) * * *
(ii) A clearing member client FDIC-supervised institution must calculate a risk-weighted asset amount for any collateral provided to a CCP, clearing member, or custodian in connection with a cleared transaction in accordance with the requirements under this subpart D.
(c) * * *
(3) * * *
(ii) For a cleared transaction with a CCP that is not a QCCP, a clearing member FDIC-supervised institution must apply the risk weight appropriate for the CCP according to this subpart D.
(4) * * *
(ii) A clearing member FDIC-supervised institution must calculate a risk-weighted asset amount for any collateral provided to a CCP, clearing member, or a custodian in connection with a cleared transaction in accordance with requirements under this subpart D.
(c)
(2)
(i) The FDIC-supervised institution may calculate the risk-weighted asset amount for the protected exposure under this subpart D, where the applicable risk weight is the risk weight applicable to the guarantor or credit derivative protection provider.
(ii) The FDIC-supervised institution must calculate the risk-weighted asset amount for the unprotected exposure under this subpart D, where the applicable risk weight is that of the unprotected portion of the hedged exposure.
(iii) The treatment provided in this section is applicable when the credit risk of an exposure is covered on a partial pro rata basis and may be applicable when an adjustment is made to the effective notional amount of the guarantee or credit derivative under paragraphs (d), (e), or (f) of this section.
(b) * * *
(2)
(e) * * *
(2) From the business day after the FDIC-supervised institution has made its delivery until five business days after the counterparty delivery is due, the FDIC-supervised institution must calculate the risk-weighted asset amount for the transaction by treating the current fair value of the deliverables owed to the FDIC-supervised institution as an exposure to the counterparty and
(j) * * *
(2) * * *
(ii) * * *
(A) If the FDIC-supervised institution purchases credit protection from a counterparty that is not a securitization SPE, the FDIC-supervised institution must determine the risk weight for the exposure according to this subpart D.
(b) * * *
(1)
(4)
Sections 324.61 through 324.63 of this subpart establish public disclosure requirements related to the capital requirements described in subpart B of this part for an FDIC-supervised institution with total consolidated assets of $50 billion or more as reported on the FDIC-supervised institution's most recent year-end Call Report that is not an advanced approaches FDIC-supervised institution making public disclosures pursuant to § 324.172. An advanced approaches FDIC-supervised institution that has not received approval from the FDIC to exit parallel run pursuant to § 324.121(d) is subject to the disclosure requirements described in §§ 324.62 and 324.63. An FDIC-supervised institution with total consolidated assets of $50 billion or more as reported on the FDIC-supervised institution's most recent year-end Call Report that is not an advanced approaches FDIC-supervised institution making public disclosures subject to § 324.172 must comply with § 324.62 unless it is a consolidated subsidiary of a bank holding company, savings and loan holding company, or depository institution that is subject to the disclosure requirements of § 324.62 or a subsidiary of a non-U.S. banking organization that is subject to comparable public disclosure requirements in its home jurisdiction. For purposes of this section, total consolidated assets are determined based on the average of the FDIC-supervised institution's total consolidated assets in the four most recent quarters as reported on the Call Report; or the average of the FDIC-supervised institution's total consolidated assets in the most recent consecutive quarters as reported quarterly on the FDIC-supervised institution's Call Report if the FDIC-supervised institution has not filed such a report for each of the most recent four quarters.
(b) * * *
(1) One- to four-family residential properties;
(2) Real property that:
(i) Would qualify as an investment in community development under 12 U.S.C. 338a or 12 U.S.C. 24 (Eleventh), as applicable, or as a “qualified investment” under 12 CFR part 345, and
(ii) Is not an ADC loan to any entity described in 12 CFR 345.12(g), unless it is otherwise described in paragraph (1), (2)(i), (3) or (4) of this definition;
(3) The purchase or development of agricultural land, which includes all land known to be used or usable for agricultural purposes (such as crop and livestock production), provided that the valuation of the agricultural land is based on its value for agricultural purposes and the valuation does not take into consideration any potential use of the land for non-agricultural commercial development or residential development; or
(4) Commercial real estate projects in which:
(i) The loan-to-value ratio is less than or equal to the applicable maximum supervisory loan-to-value ratio in the FDIC's real estate lending standards at 12 CFR part 365, appendix C;
(ii) The borrower has contributed capital to the project in the form of cash or unencumbered readily marketable assets (or has paid development expenses out-of-pocket) of at least 15 percent of the real estate's appraised “as completed” value; and
(iii) The borrower contributed the amount of capital required by paragraph (4)(ii) of this definition before the FDIC-supervised institution advances funds under the credit facility, and the capital contributed by the borrower, or internally generated by the project, is contractually required to remain in the project throughout the life of the project. The life of a project concludes only when the credit facility is converted to permanent financing or is sold or paid in full. Permanent financing may be provided by the FDIC-supervised institution that provided the ADC facility as long as the permanent financing is subject to the FDIC-supervised institution's underwriting criteria for long-term mortgage loans.
(d) * * *
(2)
(b) * * *
(3) * * *
(ii) For a cleared transaction with a CCP that is not a QCCP, a clearing member client FDIC-supervised institution must apply the risk weight applicable to the CCP under subpart D of this part.
(c) * * *
(3) * * *
(ii) For a cleared transaction with a CCP that is not a QCCP, a clearing member FDIC-supervised institution must apply the risk weight applicable to the CCP according to subpart D of this part.
(b) * * *
(5)
(6)
(b) * * *
(b) * * *
(2) * * *
(ii)
(b)
(1)
(i) An FDIC-supervised institution must deduct the following items from common equity tier 1 and additional tier 1 capital in accordance with the percentages set forth in Table 2 to § 324.300: Goodwill (§ 324.22(a)(1)), DTAs that arise from net operating loss and tax credit carryforwards (§ 324.22(a)(3)), a gain-on-sale in connection with a securitization exposure (§ 324.22(a)(4)), defined benefit pension fund assets (§ 324.22(a)(5)), expected credit loss that exceeds eligible credit reserves (for advanced approaches FDIC-supervised institutions that have completed the parallel run process and that have received notifications from the FDIC pursuant to § 324.121(d) of subpart E) (§ 324.22(a)(6)), and financial subsidiaries (§ 324.22(a)(7)).
(ii) An FDIC-supervised institution must deduct from common equity tier 1 capital any intangible assets other than goodwill and MSAs in accordance with the percentages set forth in Table 3 to § 324.300.
(iii) An FDIC-supervised institution must apply a 100 percent risk-weight to the aggregate amount of intangible assets other than goodwill and MSAs that are not required to be deducted from common equity tier 1 capital under this section.
(2)
(i) If the aggregate amount of the adjustment is positive, the FDIC-supervised institution must allocate the deduction between common equity tier 1 and tier 1 capital in accordance with Table 4 to § 324.300.
(ii) If the aggregate amount of the adjustment is negative, the FDIC-supervised institution must add back
(3)
(i) The transition AOCI adjustment amount is the aggregate amount of an FDIC-supervised institution's:
(A) Unrealized gains on available-for-sale securities that are preferred stock classified as an equity security under GAAP or available-for-sale equity exposures, plus
(B) Net unrealized gains or losses on available-for-sale securities that are not preferred stock classified as an equity security under GAAP or available-for-sale equity exposures, plus
(C) Any amounts recorded in AOCI attributed to defined benefit postretirement plans resulting from the initial and subsequent application of the relevant GAAP standards that pertain to such plans (excluding, at the FDIC-supervised institution's option, the portion relating to pension assets deducted under § 324.22(a)(5)), plus
(D) Accumulated net gains or losses on cash flow hedges related to items that are reported on the balance sheet at fair value included in AOCI, plus
(E) Net unrealized gains or losses on held-to-maturity securities that are included in AOCI.
(ii) An FDIC-supervised institution must make the following adjustment to its common equity tier 1 capital:
(A) If the transition AOCI adjustment amount is positive, the appropriate amount must be deducted from common equity tier 1 capital in accordance with Table 5 to § 324.300.
(B) If the transition AOCI adjustment amount is negative, the appropriate amount must be added back to common equity tier 1 capital in accordance with Table 5 to § 324.300.
(iii) An FDIC-supervised institution may include in tier 2 capital the percentage of unrealized gains on available-for-sale preferred stock classified as an equity security under GAAP and available-for-sale equity exposures as set forth in Table 6 to § 324.300.
(d)
(1) [Reserved]
(2)
By order of the Board of Directors.
(b) I hereby delegate to the Secretary of State, in consultation with the Secretary of the Treasury, the functions and authorities vested in the President by the following provisions of the Act:
(c) I hereby delegate to the Secretary of the Treasury the functions and authorities vested in the President by the following provisions of the Act:
(d) I hereby delegate to the Secretary of the Treasury, in consultation with the Secretary of State, the functions and authorities vested in the President by the following provisions of the Act:
(e) I hereby delegate to the Secretary of State and the Secretary of the Treasury the functions and authorities vested in the President by the following sections of the Act:
(f) I hereby delegate to the Secretary of State, the Secretary of the Treasury, and the Secretary of Homeland Security the functions and authorities vested in the President by the following sections of the Act:
(b) Section 5 of Executive Order 13780 of March 6, 2017 (Protecting the Nation from Foreign Terrorist Entry into the United States), directed the Secretary of State, the Attorney General, the Secretary of Homeland Security, and the Director of National Intelligence to develop a uniform baseline for screening and vetting standards and procedures applicable to all travelers who seek to enter the United States. A working group was established to satisfy this directive.
(c) Section 6(a) of Executive Order 13780 directed a review to strengthen the vetting process for the USRAP. It also instructed the Secretary of State to suspend the travel of refugees into the United States under that program, and the Secretary of Homeland Security to suspend decisions on applications for refugee status, subject to certain exceptions. Section 6(a) also required the Secretary of State, in conjunction with the Secretary of Homeland Security and in consultation with the Director of National Intelligence, to conduct a 120-day review of the USRAP application and adjudication process in order to determine, and implement, additional procedures to ensure that individuals seeking admission as refugees do not pose a threat to the security and welfare of the United States. Executive Order 13780 noted that terrorist groups have sought to infiltrate several nations through refugee programs and that the Attorney General had reported that more than 300 persons who had entered the United States as refugees were then the subjects of counterterrorism investigations by the Federal Bureau of Investigation.
(d) The Secretary of State convened a working group to implement the review process under section 6(a) of Executive Order 13780. This review was informed by the development of uniform baseline screening and vetting standards and procedures for all travelers under section 5 of Executive Order 13780. The section 6(a) working group compared the process for screening and vetting refugees with the uniform baseline standards and procedures established by the section 5 working group. The section 6(a) working group identified several ways to enhance the process for screening and vetting refugees and began implementing those improvements.
(e) The review process for refugees required by Executive Order 13780 has made our Nation safer. The improvements the section 6(a) working group has identified will strengthen the data-collection process for all refugee applicants considered for resettlement in the United States. They will also
(f) Section 2 of Proclamation 9645 of September 24, 2017 (Enhancing Vetting Capabilities and Processes for Detecting Attempted Entry into the United States by Terrorists or Other Public-Safety Threats), suspended and limited, subject to exceptions and case-by-case waivers, the entry into the United States of foreign nationals of eight countries. As noted in that Proclamation, those suspensions and limitations are in the interest of the United States because of certain deficiencies in those countries' identity-management and information-sharing protocols and procedures, and because of the national security and public-safety risks that emanate from their territory, including risks that result from the significant presence of terrorists within the territory of several of those countries.
(g) The entry restrictions and limitations in Proclamation 9645 apply to the immigrant and nonimmigrant visa application and adjudication processes, which foreign nationals use to seek authorization to travel to the United States and apply for admission. Pursuant to section 3(b)(iii) of Proclamation 9645, however, those restrictions and limitations do not apply to those who seek to enter the United States through the USRAP.
(h) Foreign nationals who seek to enter the United States with an immigrant or nonimmigrant visa stand in a different position from that of refugees who are considered for entry into this country under the USRAP. For a variety of reasons, including substantive differences in the risk factors presented by the refugee population and in the quality of information available to screen and vet refugees, the refugee screening and vetting process is different from the process that applies to most visa applicants. At the same time, the entry of certain refugees into the United States through the USRAP poses unique security risks and considerable domestic challenges that require the application of substantial resources.
(b) With the improvements identified by the section 6(a) working group and implemented by the participating agencies, the refugee screening and vetting process generally meets the uniform baseline for immigration screening and vetting established by the section 5 working group. Accordingly, a general resumption of the USRAP, subject to the conditions set forth in section 3 of this order, is consistent with the security and welfare of the United States.
(c) The suspension of the USRAP and other processes specified in section 6(a) of Executive Order 13780 are no longer in effect. Subject to the conditions set forth in section 3 of this order, the Secretary of State may resume
(b) Within 180 days of the date of this order, the Attorney General shall, in consultation with the Secretary of State and the Secretary of Homeland Security, and in cooperation with the heads of other executive departments and agencies as he deems appropriate, provide a report to the President on the effect of refugee resettlement in the United States on the national security, public safety, and general welfare of the United States. The report shall include any recommendations the Attorney General deems necessary to advance those interests.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Category | Regulatory Information | |
Collection | Federal Register | |
sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
Publisher | Office of the Federal Register, National Archives and Records Administration |