Federal Register Vol. 82, No.224,

I. Background

Title VII of the Consolidated Natural Resources Act of 2008 (CNRA) extended U.S. immigration law, with limited exceptions, to the CNMI and provided CNMI-specific provisions affecting foreign workers. See Public Law 110-229, 122 Stat. 754, 853-854. The CNRA provided for a transition period to phase out the CNMI's nonresident contract worker program and phase in the U.S. Federal immigration system in a manner that minimizes adverse economic and fiscal effects and maximizes the CNMI's potential for future economic and business growth. See sections 701 and 702(a) of the CNRA.

The CNRA authorized the Secretary of Homeland Security to create a nonimmigrant classification that would ensure adequate employment in the CNMI during the transition period. See section 702(a) of the CNRA; 48 U.S.C. 1806(d). The Department of Homeland Security (DHS) published a final rule on September 7, 2011, amending the regulations at 8 CFR 214.2(w) to implement a temporary, CNMI-only transitional worker nonimmigrant classification (CW classification, which includes CW-1 for principal workers and CW-2 for spouses and minor children). See Commonwealth of the Northern Mariana Islands Transitional Worker Classification, 76 FR 55502 (Sept. 7, 2011).

The CNRA mandated an annual reduction in the number of permits issued per year and the total elimination of the CW nonimmigrant classification by the end of the transition period. See 48 U.S.C. 1806(d)(2). At the outset of the transitional worker program, DHS set the CW-1 numerical limitation (also known as the CW-1 cap) for FY 2011 at 22,417 and for FY 2012 at 22,416. DHS announced these annual caps in DHS regulations at 8 CFR 214.2(w)(1)(viii)(A) and (B). DHS subsequently published annual caps by Federal Register notice. See 8 CFR 214.2(w)(1)(viii)(C).

The CNRA directed the U.S. Secretary of Labor to determine whether an extension of the CW program for an additional period of up to 5 years beyond the expiration of the initial transition period on December 31, 2014, was necessary to ensure that an adequate number of workers will be available for legitimate businesses in the CNMI. The CNRA further provided the Secretary of Labor with the authority to provide for such an extension through notice in the Federal Register. On June 3, 2014, the Secretary of Labor extended the CW program for an additional 5 years, through December 31, 2019. See Secretary of Labor Extends the Transition Period of the Commonwealth of the Northern Mariana Islands-Only Transitional Worker Program, 79 FR 31988 (June 3, 2014). Since the Secretary of Labor extended the CW program at least until December 31, 2019, DHS decided to preserve the status quo, or current conditions, rather than aggressively reduce CW-1 numbers for FY 2015. DHS therefore reduced the CW-1 cap nominally by one, resulting in an FY 2015 limit of 13,999. See Commonwealth of the Northern Mariana Islands Transitional Worker Classification (CNMI)-Only Transitional Worker Numerical Limitation for Fiscal Year 2015, 79 FR 58241 (Sept. 29, 2014).

On December 16, 2014, Congress amended the law to extend the transition period until December 31, 2019. See Consolidated and Further Continuing Appropriations Act, 2015, Public Law 113-235, sec. 10, 128 Stat. 2130, 2134 (codified at 48 U.S.C. 1806(d)). Congress also eliminated the Secretary of Labor's authority to provide for future extensions of the CW-1 program, requiring the CW-1 program to end (or sunset) on December 31, 2019. See id.

For FY 2016, DHS reduced the cap by 1,000 to a limit of 12,999. See Commonwealth of the Northern Mariana Islands Transitional Worker Classification (CNMI)-Only Transitional Worker Numerical Limitation for Fiscal Year 2016, 80 FR 63911 (Oct. 22, 2015). The CW-1 cap was met for the first time in FY 2016.1 As a result, DHS preserved the status quo and reduced the cap for FY 2017 by only one to 12,998. See Commonwealth of the Northern Mariana Islands Transitional Worker Classification (CNMI)-Only Transitional Worker Numerical Limitation for Fiscal Year 2017, 81 FR 60581 (Sept. 2, 2016). In the Federal Register notice announcing the CW-1 cap for FY 2017, DHS explained that the nominal reduction would help preserve access to foreign labor in the CNMI, and emphasized the statutory requirement to reduce the annual cap to zero no later than the end of calendar year 2019. DHS also provided notice to CNMI employers and CW-1 workers warning of potential significant reductions in the number in the annual cap in the years ahead. Shortly thereafter, on October 14, 2016, the CW cap was met for FY 2017, only 2 weeks into the fiscal year.2

The CNRA requires an annual reduction in the number of transitional workers but does not mandate a specific numerical reduction. See 48 U.S.C. 1806(d)(2). In addition, DHS regulations provide that the CW-1 cap for any fiscal year will be less than the number established for the previous fiscal year, and that the adjusted number will be reasonably calculated in DHS's discretion to reduce the number of CW-1 nonimmigrant workers to zero by the end of the program. 8 CFR 214.2(w)(1)(viii)(C). DHS may adjust the cap for a fiscal year or any other period, at any time by publishing a document in the Federal Register, as long as the number is less than the cap for the previous fiscal year. See 8 CFR 214.2(w)(1)(viii)(D).

As noted previously, Congress has mandated that the transition period end on December 31, 2019, without the possibility of an administrative extension. See Public Law 113-235, sec. 10 (codified at 48 U.S.C. 1806(a)(2), (d)). Given this firm sunset date and the CNRA's requirement to reduce the number of transitional workers to zero by the end of the transition period, DHS believes it is now appropriate to publish a reduction plan to inform the public of the number of CW-1 workers available during each of the fiscal years for the remainder of the transition period. See 48 U.S.C. 1806(d)(2). DHS believes that publishing a reduction plan of the CW-1 cap over the remaining two and one-quarter fiscal years will provide employers with knowledge of the availability of CW workers and help them adjust their workforce needs before the transition period ends.

DHS has set the CW-1 cap for FY 2018 at 9,998. For FY 2019, the cap is set at 4,999. For FY 2020, the cap is set at 2,499 and will be in effect until the transition period ends on December 31, 2019. DHS considered an approach similar to FY 2017 of a nominal reduction only for the next fiscal year, consistent with DHS's prior goal of best ensuring that there are enough CW-1 workers for future fiscal years until the end of the program. However, at this point in time, with little over two years remaining in the transition period, DHS has decided that an orderly reduction over the remaining years of the transition period is the most appropriate course of action. DHS made this decision based on the need to reduce the number of CW-1 nonimmigrant workers to zero by the end of the transition period, and consistent with the warning DHS provided in the September 2016 Federal Register document that CNMI employers and CW-1 workers should plan for more significant reductions in the annual numerical limitation in the years ahead. DHS believes that this approach will further encourage the recruitment of U.S. workers and the transition into the U.S. immigration system, consistent with the goals of the CNRA and the general policy in Executive Order 13,788, Buy American and Hire American, 82 FR 18837, 18838 (Apr. 21, 2017), “to protect the interests of United States workers in the administration of our immigration system.”

DHS also notes that Congress recently revised the CW-1 statute without extending the transition period. The Northern Mariana Islands Economic Expansion Act 3 (the NMIEEA), which was enacted into law on August 22, 2017, revised the CW-1 visa classification to, among other things, (1) add 350 CW-1 visas to the fiscal year (FY) 2017 CW-1 cap for purposes of extending certain existing CW-1 permits, thus raising the total number of visas that may be issued from 12,998 to 13,348; 4 and (2) prohibit the CW-1 classification from being available to workers who will be performing jobs classified as “construction and extraction occupations” as defined in the U.S. Department of Labor's Standard Occupational Classification (SOC) system other than to extend CW-1 permits of such workers first issued before October 1, 2015.

DHS reviewed this new legislation to consider its effect, if any, on the CW-1 FY 2018 cap. Congress added CW-1 visas to the FY 2017 cap, creating a new baseline of 13,448, yet it did not extend the transition period beyond the current sunset of December 31, 2019. Although the increase in the FY 2017 cap meant that DHS could have set the FY 2018 cap as high as 13,347, DHS did not do so for the reasons set forth above.

Notably, Congress also banned employers of new construction and extraction occupation workers from using the CW-1 classification. As described by the NMIEEA's sponsor in the Congressional Record, the bar on construction and extraction workers intends to require construction companies to fill new positions (including those filled by CW-1 workers after October 1, 2015) with non-CW-1 workers.5 As the construction worker bar will significantly reduce demand for the program compared to what it would be absent enactment of the NMIEEA, the new law will help mitigate potential harmful effects on CNMI employers resulting from the cap reductions for FY 2018 and subsequent years provided in this document. In setting the FY 2018 at 9,998, DHS is reducing the CW-1 cap by 3,000, which represents a reduction of about a quarter of the number for FY 2017. The FY 2019 cap, set to 4,999, reduces the FY 2018 cap by half. The final allocation for the first quarter of FY 2020 reduces the FY 2019 cap by half and is set to 2,499. A cap reduction in this manner complies with the regulatory requirement that the number in each fiscal year be reasonably calculated in DHS's discretion to reduce the number of CW-1 nonimmigrants to zero by the end of the transition period.

The FY 2018 cap for CW-1 nonimmigrant workers will be in effect beginning on October 1, 2017. DHS retains the ability to use its discretion to adjust the cap for a fiscal year or other period at any time by notice in the Federal Register, as long as the new cap is less than the one established for the previous fiscal year, and is a number reasonably calculated to reduce the number of CW-1 nonimmigrants to zero by the end of the transition period. See 8 CFR 214.2(w)(1)(viii)(C) and (D). Consistent with the rules that apply to other nonimmigrant worker visa classifications, if the cap for the fiscal year is not reached, the unused numbers do not carry over to the next fiscal year. See 8 CFR 214.2(w)(1)(viii)(E).

Generally, each CW-1 nonimmigrant worker with an approved employment start date that falls within FY 2018 (October 1, 2017-September 30, 2018) will be counted against the new cap of 9,998. Counting each CW-1 nonimmigrant worker in this manner will help ensure that USCIS does not approve requests that would exceed the cap of 9,998 CW-1 nonimmigrant workers granted such status in FY 2018.

This document does not affect the current immigration status of foreign workers who have CW-1 nonimmigrant status. Such foreign workers, however, will be affected by this document when their CNMI employers file:

• For an extension of their CW-1 nonimmigrant classification; or

• A change of status from another nonimmigrant status to that of CW-1 nonimmigrant status.

This document does not affect the status of any individual currently holding CW-2 nonimmigrant status as the spouse or minor child of a CW-1 nonimmigrant worker. This document also does not directly affect the ability of any individual to extend or otherwise obtain CW-2 status, as the cap applies to CW-1 principals only. This document, however, may indirectly affect individuals seeking CW-2 status since their status depends on the CW-1 principal's ability to obtain or retain CW-1 status.

The Board consists of up to seven members appointed by the President, by and with the advice and consent of the Senate, as provided in the Federal Reserve Act (Act).1 The Act does not define a quorum of the Board, and authorizes the Board to make all rules and regulations necessary to enable the Board effectively to perform its duties and functions.2 For many years, the Board defined a quorum to be a majority (four members) of its authorized strength of seven members. In 2003, the Board revised its definition of quorum of the Board to be a majority of the Board members currently in office, unless there are five members in office, in which case a quorum would be four members.3 This modification allowed the Board to function with fewer than four members in office and enhanced the Board's ability to function during emergencies.

Over the past decade, the Board has had to operate with fewer than five members on several occasions.4 Based on this experience, the Board has determined that substantial vacancies present administrative and logistical challenges that make it difficult to conduct routine business and efficiently manage operations, particularly with the Board's traditional reliance on a 3-member committee structure. In light of these considerations, the Board has reconsidered its quorum practice and decided to amend its definition of a quorum 5 to provide that a quorum of the Board is four members, unless there are three or fewer members in office, in which case a quorum would be all members in office. This revised definition will facilitate the Board's ability to continue to function efficiently during periods of substantial vacancies on the Board. This revision does not alter the number of Board members required to constitute a quorum or the functioning of the Board's committee structure in normal operating environments (that is, when five or more members are in office).

Since this revision may make it more difficult to convene a quorum of the Board under exigent circumstances, the Board also has added a modified definition of quorum providing that, in an emergency situation, a quorum of the Board consists of a majority of the Board members in office.6 An emergency situation is defined as a situation when action on a matter is necessary to prevent, correct, or mitigate serious harm to the economy or the stability of the financial system, and action is required before the full Board can convene. As part of this final rule, the Board is adding a provision to its regulations specifying that the Chair (or the Vice Chair, if the Chair is unavailable) would be authorized to determine when an emergency situation exists.

The revised rule relates solely to the internal procedure of the Board, and, accordingly, the public notice, public comment and delayed effective date provisions of the Administrative Procedure Act do not apply. See 5 U.S.C. 553(b) and (d). Because public notice and comment is not required, the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) also does not apply to this action.

For the reasons set forth in the preamble, the Board amends 12 CFR part 265 as follows:

The Board consists of up to seven members appointed by the President, by and with the advice and consent of the Senate, as provided in the Federal Reserve Act (Act).1 The Act does not define a quorum of the Board, and authorizes the Board to make all rules and regulations necessary to enable the Board effectively to perform its duties and functions.2 For many years, the Board defined a quorum to be a majority (four members) of its authorized strength of seven members. In 2003, the Board revised its definition of a quorum of the Board to be a majority of the Board members currently in office, unless there are five members in office, in which case a quorum would be four members.3 This modification allowed the Board to function with fewer than four members in office and enhanced the Board's ability to function during emergencies.

Over the past decade, the Board has had to operate with fewer than five members on several occasions.4 Based on this experience, the Board has determined that substantial vacancies present administrative and logistical challenges that make it difficult to conduct routine business and efficiently manage operations, particularly with the Board's traditional reliance on a 3-member committee structure. In light of these considerations, the Board has reconsidered its quorum practice and decided to amend its definition of a quorum to provide that a quorum of the Board is four members, unless there are three or fewer members in office, in which case a quorum would be all members in office. This revised definition will facilitate the Board's ability to continue to function efficiently during periods of substantial vacancies on the Board. This revision does not alter the number of Board members required to constitute a quorum or the functioning of the Board's committee structure in normal operating environments (that is, when five or more members are in office).

Increasing the quorum requirement for a four-member and three-member Board may make it more difficult to convene a quorum if a member of the Board is recused or disqualified from a particular matter. To address this concern, the Board also has amended its Rules of Organization to clarify that Board members who are recused or disqualified from participating in a particular matter will be excluded from calculations of the quorum requirement for that matter.

Since the revisions may make it more difficult to convene a quorum of the Board under exigent circumstances, the Board also has added a modified definition of quorum providing that, in an emergency situation, a quorum of the Board consists of a majority of the Board members in office. An emergency situation is defined as a situation when action on a matter is necessary to prevent, correct, or mitigate serious harm to the economy or the stability of the financial system, and action is required before the full Board can convene. The Board is amending its Rules Regarding Delegation of Authority (12 CFR part 265), published elsewhere in this Federal Register, to authorize the Chair (or the Vice Chair, if the Chair is unavailable) to determine when an emergency situation exists.

The Board has incorporated these revisions into its Rules of Organization and Rules Regarding Delegation of Authority,5 published elsewhere in this Federal Register. The revisions relate solely to the internal procedure of the Board, and, accordingly, the public notice, public comment and delayed effective date provisions of the Administrative Procedure Act do not apply. See 5 U.S.C. 553(b) and (d). Because public notice and comment is not required, the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) also does not apply to this action.

I. Background The Financial Crisis of 2007-2009

The financial crisis of 2007-2009 took a heavy toll on the corporate credit union system. The crisis, largely mortgage related, greatly affected the investment portfolios of many corporates, causing widespread liquidity problems, instability in the system, and failures. During this period, the NCUA took extraordinary short and mid-term measures to stabilize the corporate system. Among other things, it: (1) Made capital injections; (2) approved the Temporary Corporate Credit Union Share Guarantee Program, which guaranteed uninsured shares at participating corporates; (3) retained an independent third party to analyze expected non-recoverable credit losses for distressed securities held by corporates; (4) conserved five corporates; and (5) created the NCUA Guaranteed Note Program.1

In 2010, the Board comprehensively revised the regulations governing corporates and their activities to provide longer term structural enhancements to the corporate system.2 The 2010 rule established a regulatory framework that provides a foundation for a healthy corporate system that: (1) Delivers important services to the corporates' natural person credit union members, such as payment systems and liquidity; and (2) builds and attracts sufficient capital.3 The 2010 rule also sought to prevent the recurrence of financial losses similar to those that led to the failure of the referenced five corporates and weakened the financial condition of others.

The 2010 rule curtailed several practices that contributed to the corporate failures. Specifically, it established investment concentration limits, limited asset maturities, and prohibited investments in subordinated and private label mortgage-backed securities. The 2010 rule also implemented a prompt corrective action (PCA) regime stipulating capital adequacy for corporates. Largely based on the Basel I requirements, the capital requirements of the 2010 rule emphasized corporates holding tangible and durable capital.

The provisions of the 2010 rule have successfully stabilized the corporate system and improved the corporates' ability to function and provide services to natural person credit unions. Additionally, since 2010, the overall economy has improved greatly, thereby improving the economic landscape in which corporates operate. Further, the large concentration of troubled assets within the corporate system has been reduced through portfolio repositioning or the NCUA's intervention. The corporate system has significantly contracted and consolidated, with assets declining from approximately $81.7 billion prior to the 2010 rule to approximately $24.9 billion today. In that same time period, the number of corporates has decreased from 26 to 11. Given these developments, the Board decided to revisit the 2010 rule's capital standards.

As a result of its review of the corporate capital standards, in July 2017, the Board published amendments to the corporate rule, which primarily affect the calculation of capital after corporates consolidate and set a retained earnings ratio target in meeting PCA standards.4

Specifically, the Board proposed incorporating “GAAP equity acquired in a merger” as a component of retained earnings. This amendment to the definition of “retained earnings” in turn affects the definition of “Tier 1 capital,” which includes retained earnings as one component of Tier 1 capital. In the proposal, the Board stated that expressly including such equity acquired in a merger as retained earnings and referencing GAAP clarifies that this capital is available to cover losses, enhances transparency, and reduces ambiguity.5 The Board also proposed deleting the phrase “the retained earnings of any acquired credit union, or an integrated set of activities and assets, calculated at the point of acquisition, if the acquisition is a mutual combination” from the current definition of “Tier 1 capital,” given that it would be redundant as a result of the proposal.

In the 2010 rule, the Board encouraged corporates to build retained earnings, which has generally yielded positive results. Nevertheless, in the July 2017 proposal, the Board proposed amending this aspect of the regulation for three reasons: (1) The 2010 rule's language did not expressly reference “GAAP equity acquired in mergers” as a component of retained earnings; (2) the 2010 rule's language limited perpetual contributed capital (PCC) for regulatory capital purposes; and (3) the 2010 rule's language was inconsistent with other capital regulations. Specifically, the Board proposed removing the requirement 6 to limit PCC counted as Tier 1 capital to the amount of retained earnings. Further, the Board proposed permitting a corporate to include in its Tier 1 capital all PCC that is sourced from an entity not covered by federal share insurance.

Further, as discussed in greater detail below, the Board proposed adding a definition of “retained earnings ratio” to the regulation. Under the proposal, that term would mean “the corporate credit union's retained earnings divided by its moving daily average net assets.” The Board proposed requiring all corporates to achieve an eventual retained earnings ratio of 250 basis points, recognizing the importance of retained earnings to the corporate system and the National Credit Union Share Insurance Fund. Under the proposal, upon attaining this benchmark, a corporate would be permitted to include all PCC in its Tier 1 capital, regardless of source. Until a corporate achieved that benchmark, it would be required to deduct PCC exceeding retained earnings by 200 basis points from its Tier 1 capital. As noted in the proposal, the Board believes this requirement provides an inducement to build retained earnings and promotes clarity as to the minimum amount of retained earnings held by a corporate to account for potential losses.

Lastly, in Appendix B to part 704, the Board proposed adding a “retained earnings ratio” requirement to the Part I expanded investment authorities. The Board believed that by doing so, the retained earnings ratio requirement would limit the risk of the expanded investment portfolios. Specifically, the Board proposed to employ an indexed retained earnings requirement, thereby correlating with actual risk taking.

The NCUA received 38 comments on the proposal, including those from corporates, individual credit unions, trade associations, and credit union leagues. These commenters uniformly supported the proposed rule. No commenter opposed the proposal.

As an overview, commenters stated that the proposed rule: (1) Enhances transparency; reduces ambiguity; and better aligns capital regulations with the financial marketplace, GAAP accounting standards, and treatment by other financial institutions and their regulators; (2) provides greater flexibility in calculating and treating capital and promotes increased certainty and stability in the credit union system; (3) enhances the safety and soundness of corporate credit unions, which are essential for the credit union system; (4) provides greater liquidity to the benefit of natural person credit unions; and (5) reflects the improved health of the economy, the credit union system, and the corporates since 2010.

Each specific proposal and the corresponding public comments are discussed below in more detail.

As noted above, the Board proposed amending the definition of “retained earnings.” The definition of “retained earnings” prior to the proposal included undivided earnings, regular reserve, reserve for contingencies, supplemental reserves, reserve for leases, and other appropriations from undivided earnings as designated by management or the NCUA. The proposal added “GAAP equity acquired in a merger” to that list. The Board stated that expressly including equity acquired in a merger as retained earnings and referencing GAAP would clarify that this capital is available to cover losses, enhances transparency, and reduce ambiguity.

No commenter objected to this proposal. Approximately 30 commenters specifically supported it. These commenters stated that including such equity acquired in a merger as retained earnings and referencing GAAP provides consistency with other regulators and will help match regulatory principles with GAAP and other financial measurements within the industry. In turn, this enhances transparency of capital adequacy and eliminates confusion for users of financial statements. A few commenters stated that the change would not increase risk to the corporate system.

Consistent with the proposal and the comments, the Board amends the definition of “retained earnings” to incorporate “GAAP equity acquired in a merger” as proposed.

As mentioned above, in 2010, the Board comprehensively modified Part 704, with particular focus on providing incentives to increase retained earnings. The 2010 rule's PCA provisions require corporates to meet a leverage ratio. This leverage ratio consists of retained earnings and PCC.7 While noting that this effort to increase retained earnings has been successful, the Board also stated that the language in the current rule is indirect and may disadvantage corporates working with third parties. Specifically, the limitation on PCC for regulatory capital purposes does not recognize the full value of PCC that stands to absorb losses and protect counterparties. Accordingly, in the 2017 proposal, the Board proposed modifying the manner in which PCC is treated during a ten-year phase-in period. The phase-in period for PCC is intended to provide an incentive to corporates to increase retained earnings.

In the 2017 proposal, the Board proposed to remove the current requirement 8 to limit PCC counted as Tier 1 capital to the amount of retained earnings. Further, the Board proposed to permit a corporate to include in its Tier 1 capital all PCC that is sourced from an entity not covered by federal share insurance. Recognizing that retained earnings is critical to the health of the corporate system and the share insurance fund, the Board proposed adding a provision to part 704 requiring all corporates to achieve eventual retained earnings of 250 basis points. To this end, the Board proposed adding a definition of retained earnings ratio to mean “the corporate credit union's retained earnings divided by its moving daily average of net assets.” Upon attaining the benchmark of 250 basis points, a corporate would be permitted to include all PCC, regardless of its source, in its Tier 1 capital. Prior to attaining the benchmark, the corporate would be required to deduct the amount of PCC exceeding retained earnings by 200 basis points as an inducement to build retained earnings.

No commenter objected to this proposal. Approximately 30 commenters expressly supported it. These commenters stated that the 2010 amendments resulted in corporates accumulating sufficient retained earnings to meet or exceed adequate capitalization under PCA through the 2016 phase-in adjustment. Thus, they agreed with the NCUA's proposal to remove the requirement to limit PCC counted as Tier 1 capital, stating that the amendment enhances clarity, helps ensure capital adequacy, and provides the first layer of insulation to protect the share insurance fund. They stated that the change would better align a corporate's use of capital with the expectations of member credit unions.

One commenter requested modifying the proposed definition of Tier 1 capital as follows: “If a corporate credit union's retained earnings ratio is less than two and a half percent, deduct the amount of PCC received from federally insured credit unions less retained earnings that exceeds two percent of moving daily average net assets (MDANA).” It believed that this change would clarify the NCUA's acceptance of capital received by corporates from members. The Board has compared this recommended language with the proposed regulatory text and has determined that the Board's proposed language is more direct and more readily understandable. Accordingly, the Board is adopting the proposed language in the final rule without change.

Another commenter suggested that the corporate call report continue to clearly reflect the amount of PCC that is not being counted in the leverage ratio, as it currently does in the “PCC calculation” section of the call report. The Board notes that it will continue to require this information in the call report.

Appendix B to part 704 enumerates the expanded authorities available to corporates and procedures that a corporate must follow to be granted such authorities. Specifically, the Board proposed adding a retained earnings ratio requirement to the expanded investment authorities. The Board believed such an addition would limit the risk of the expanded investment portfolios.

No commenters addressed this issue. The Board is adopting this amendment as proposed.

Several commenters requested that the NCUA conduct a comprehensive review of Part 704 in 2018. The commenters stated that such a review is overdue considering the last comprehensive review of the corporate rule occurred in 2010. The commenters stated that such a review would allow stakeholders to explore other rule modernization opportunities. One commenter suggested such a review might result in “thoughtful loosening” of the corporate rules. One commenter requested that the NCUA improve coordination with state credit union regulators and reinforce the dual chartering system and joint supervision.

The Regulatory Flexibility Act requires the NCUA to prepare an analysis of any significant economic impact a regulation may have on a substantial number of small entities (primarily those under $100 million in assets).9 This rule only affects corporate credit unions, all of which have more than $100 million in assets. Accordingly, the NCUA certifies the rule will not have a significant economic impact on a substantial number of small credit unions.

The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in which an agency by rule creates a new paperwork burden or modifies the existing burden.10 For purposes of the PRA, a paperwork burden may take the form of a reporting or recordkeeping or third party disclosure requirement, both referred to as information collections. The rule does not contain information collection requirements that require approval by OMB under the PRA (44 U.S.C. 3501).

The Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121) (SBREFA) provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where NCUA issues a final rule as defined by Section 551 of the Administrative Procedure Act. After reviewing the rule and its likely impacts, NCUA believes that the rule is mostly technical and will not lead to a measurable change to (1) credit union lending to consumers or businesses, (2) net worth of natural person credit unions, or (3) interest rates paid or received by natural person credit unions. Accordingly, NCUA believes this final rule is a not “major rule” within the meaning of the relevant sections of SBREFA. As required by SBREFA, NCUA has filed the appropriate reports so that this final rule may be reviewed.

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

The NCUA has determined that this rule will not affect family well-being within the meaning of § 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105-277, 112 Stat. 2681 (1998).

For the reasons discussed above, the National Credit Union Administration Board amends 12 CFR part 704 as follows:

I. Background

Pursuant to section 1028(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203), on July 10, 2017, the Bureau issued a final rule titled Arbitration Agreements to regulate pre-dispute arbitration agreements in contracts for specified consumer financial products and services. The Bureau published the arbitration agreements rule in the Federal Register on July 19, 2017 (82 FR 33210), establishing 12 CFR part 1040. As required by section 1028(a) of the Dodd-Frank Act, the arbitration agreements rule followed the publication and delivery to Congress of the Bureau's March 2015 study concerning the use of pre-dispute arbitration agreements. The arbitration agreements rule would have imposed two sets of limitations on the use of pre-dispute arbitration agreements by providers of certain consumer financial products and services. First, the arbitration agreements rule would have prohibited providers from using a pre-dispute arbitration agreement to block consumer class actions in court and would have required providers to include a provision reflecting this limitation in arbitration agreements they entered into. Second, the arbitration agreements rule would have required providers to redact and submit to the Bureau certain records relating to arbitral proceedings and relating to the use of pre-dispute arbitration agreements in court, and would have required the Bureau to publish these records on its Web site. While the arbitration agreements rule became effective on September 18, 2017, the arbitration agreements rule would have applied only to pre-dispute arbitration agreements entered into after March 19, 2018.

The United States House of Representative passed House Joint Resolution 111 disapproving the arbitration agreements rule under the Congressional Review Act (5 U.S.C. 801 et seq.) on July 25, 2017. The United States Senate passed the joint resolution on October 24, 2017. President Donald J. Trump signed the joint resolution into law as Public Law 115-74 on November 1, 2017. Under the joint resolution and by operation of the Congressional Review Act, the arbitration agreements rule has no force or effect. Accordingly, the Bureau is hereby removing the final rule titled Arbitration Agreements from the CFR.

This action is not an exercise of the Bureau's rulemaking authority under the Administrative Procedure Act (APA) because the Bureau is not “formulating, amending, or repealing a rule” under 5 U.S.C. 551(5). Rather, the Bureau is effectuating changes to the CFR to reflect what congressional action has already accomplished. Accordingly, the Bureau is not soliciting comments on this action.

The FAA has determined that notice of, and opportunity for prior public comment on, these special conditions is unnecessary because the substance of these special conditions has been subject to the public-comment process in several prior instances with no substantive comments received. The FAA finds good cause that prior notice and comment are unnecessary, and for the same reason finds that good cause exists for adopting these special conditions upon publication in the Federal Register.

The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above. We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.

We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.

On August 19, 2009, Mitsubishi applied for a type certificate for their new Model MRJ-200 airplane. The Model MRJ-200 airplane is a low-wing, conventional-tail design with two wing-mounted turbofan engines. The airplane is equipped with an electronic flight-control system, has seating for 96 passengers and a maximum takeoff weight of 98,800 lbs.

Under the provisions of title 14, Code of Federal Regulations (14 CFR) 21.17, Mitsubishi must show that the Model MRJ-200 airplane meets the applicable provisions of part 25, as amended by Amendments 25-1 through 25-141; part 36, as amended by Amendments 36-1 through 36-30; and part 34, as amended by Amendments 34-1 through the amendment effective at the time of design approval.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the Model MRJ-200 airplane because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the Model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.

In addition to the applicable airworthiness regulations and special conditions, the model MRJ-200 airplane must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36.

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type certification basis under § 21.17(a)(2).

The Model MRJ-200 airplane will incorporate the following novel or unusual design feature:

An electronic flight-control system that provides control of the airplane through pilot inputs to the flight computer. Current part 25 airworthiness regulations account for control laws where aileron deflection is proportional to control-stick deflection. They do not address any nonlinearities, i.e., situations where output does not change in the same proportion as input, or other effects on aileron actuation that may be caused by electronic flight controls.

The flight-control system for the Model MRJ-200 airplane does not have a direct mechanical link, nor a linear gain, between the airplane flight-control surface and the pilot's flight-deck control device, which is not accounted for in § 25.349(a). Instead, a flight-control computer commands the airplane flight-control surfaces, based on input received from the flight-deck control device. The flight-control computer modifies pilot input before the command is given to the flight-control surface.

These special conditions differ from current regulatory requirements in that they require that the roll maneuvers result from defined movements of the flight-deck roll control as opposed to defined aileron deflections. Also, these special conditions require an additional load condition at design maneuvering speed (VA), in which the flight-deck roll control is returned to neutral following the initial roll input.

These special conditions differ from similar special conditions previously issued on this topic. These special conditions are limited to the roll axis only, whereas other special conditions also included pitch and yaw axes. Special conditions are no longer needed for the yaw axis because § 25.351 was revised at Amendment 25-91 to take into account effects of an electronic flight-control system. No special conditions are needed for the pitch axis because the method that Mitsubishi proposed for the pitch maneuver takes into account effects of an electronic flight-control system.

These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

As discussed above, these special conditions are applicable to the Model MRJ-200 airplanes. Should Mitsubishi apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, these special conditions would apply to that model as well.

This action affects only certain novel or unusual design features on one model of airplanes. It is not a rule of general applicability.

The authority citation for these special conditions is as follows:

Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Mitsubishi Model MRJ-200 airplanes.

In lieu of compliance to 14 CFR 25.349(a), the following conditions, speeds, and flight-deck roll-control motions (except as the motions may be limited by pilot effort) must be considered in combination with an airplane load factor of zero, and of two-thirds of the positive maneuvering factor used in design. In determining the resulting control-surface deflections, the torsional flexibility of the wing must be considered in accordance with § 25.301(b).

(a) Conditions corresponding to steady rolling velocities must be investigated. In addition, conditions corresponding to maximum angular acceleration must be investigated for airplanes with engines or other weight concentrations outboard of the fuselage. For the angular acceleration conditions, zero rolling velocity may be assumed in the absence of a rational time-history investigation of the maneuver.

(b) At VA, sudden movement of the flight-deck roll control up to the limit is assumed. The position of the flight-deck roll control must be maintained until a steady roll rate is achieved, and then must be returned suddenly to the neutral position.

(c) At VC, the flight-deck roll control must be moved suddenly and maintained so as to achieve a roll rate not less than that obtained in special condition (b).

(d) At VD, the flight-deck roll control must be moved suddenly and maintained so as to achieve a roll rate not less than one third of that obtained in special condition (b).

I. Background

On March 12, 2015, NOAA expanded the boundaries of Gulf of the Farallones National Marine Sanctuary (now renamed Greater Farallones National Marine Sanctuary or GFNMS) and Cordell Bank National Marine Sanctuary (CBNMS) to an area north and west of their previous boundaries with a final rule (80 FR 13078). The final rule entered into effect on June 9, 2015 (80 FR 34047). In the course of the rulemaking to expand GFNMS and CBNMS, NOAA learned from U.S. Coast Guard (USCG) that the discharge regulations had the potential to impair the operations of USCG vessels and aircraft conducting law enforcement and on-water training exercises in GFNMS and CBNMS expansion areas. The USCG supports national marine sanctuary management by providing routine surveillance and dedicated law enforcement of the National Marine Sanctuaries Act (NMSA) and sanctuary regulations. To ensure that the March 12, 2015, rule did not undermine USCG's ability to perform its duties, at that time, NOAA postponed the effectiveness of the discharge requirements in both sanctuaries' regulations with regard to USCG activities in the expansion areas for six months. Four additional six-month postponements of the effectiveness of the discharge requirements were published in the Federal Register on December 1, 2015 (80 FR 74985), May 31, 2016 (81 FR 34268), December 6, 2016 (81 FR 87803), and June 7, 2017 (82 FR 26339) to provide adequate time for completion of an environmental assessment and to determine NOAA's next steps. Without further NOAA action, the discharge regulations will become effective, with regard to USCG activities, on December 9, 2017.

However, NOAA is currently considering whether, among other things, to exempt certain USCG activities in sanctuary regulations and is concurrently publishing a proposed rule and draft environmental analysis to seek comment on the potential exemption. NOAA is therefore postponing the effectiveness of the discharge requirements in the expansion areas of both sanctuaries with regard to USCG activities for one year until December 9, 2018, or 30 days after publication of a final rule, whichever comes first, to provide adequate time for completion of a final environmental assessment and final rule, as appropriate. The proposed rule and related environmental analysis associated with this action will give the public, other federal agencies, and interested stakeholders an opportunity to comment on various alternatives that are being considered.

NOAA previously conducted an environmental analysis under the National Environmental Policy Act (NEPA) as part of the rulemaking process leading to the expansion of CBNMS and GFNMS, which addressed regulations regarding the discharge of any matter or material in the sanctuaries. Potential environmental impacts of the decision to postpone effectiveness are sufficiently encompassed within the impacts analysis of the environmental baseline and the no action alternative presented in that analysis. Should NOAA decide to amend the regulations governing discharges for USGS activities in CBNMS and GFNMS, any additional environmental analysis required under NEPA would be prepared and released for public comment.

This action has been determined to be not significant under Executive Order 12866.

This action is not expected to be an Executive Order 13771 regulatory action because this action is not significant under Executive Order 12866.

The Assistant Administrator of National Ocean Service (NOS) finds good cause pursuant to 5 U.S.C. 553(b)(B) to waive the notice and comment requirements of the Administrative Procedure Act (APA) because this action is administrative in nature. This action postpones the effectiveness of the discharge requirements in the regulations for CBNMS and GFNMS in the areas added to the sanctuaries' boundaries in 2015, that underwent notice and comment review, with regard to USCG activities for one year to provide adequate time for public scoping, completion of an environmental assessment, and concurrent rulemaking on how to address the USCG activities, as appropriate. The substance of the underlying regulations currently remains unchanged. Therefore, providing notice and opportunity for public comment under the APA would serve no useful purpose. For the reasons above, the Assistant Administrator also finds good cause under 5 U.S.C. 553(d) to waive the 30-day delay in effectiveness and make this action effective immediately upon publication.

In the Federal Register of April 6, 2016 (81 FR 20091), we issued a final rule entitled “Sanitary Transportation of Human and Animal Food” (the final rule) that establishes requirements for shippers, loaders, carriers by motor vehicle and rail vehicle, and receivers engaged in the transportation of food, including food for animals, to use sanitary transportation practices to ensure the safety of the food they transport. The final rule, which is codified at 21 CFR part 1, subpart O, became effective June 6, 2016, and has compliance dates that started April 6, 2017.

We examined the economic implications of the final rule as required by the Regulatory Flexibility Act (5 U.S.C. 601-612) and determined that the final rule will have a significant economic impact on a substantial number of small entities. In compliance with section 212 of the Small Business Regulatory Enforcement Fairness Act (Pub. L. 104-121, as amended by Pub. L. 110-28), we are making available the SECG to reduce the burden of determining how to comply by further explaining and clarifying the actions that a small entity must take to comply with the rule.

We are issuing the SECG consistent with our good guidance practices regulation (21 CFR 10.115(c)(2)). The SECG represents the current thinking of FDA on this topic. 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 found in FDA regulations. These collections of information 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 part 1, subpart O have been approved under OMB control number 0910-0773.

Persons with access to the internet may obtain the SECG at either https://www.fda.gov/FoodGuidances or https://www.regulations.gov. Use the FDA Web site listed in the previous sentence to find the most current version of the guidance.

Background

On March 23, 2017, the DEA published an interim final rule to make FDA-approved products containing dronabinol in an oral solution a schedule II controlled substance. 82 FR 14815. The interim final rule provided an opportunity for interested persons to file written comments as well as a request for hearing or waiver of hearing, on or before April 24, 2017.

In response to the interim final rule, the DEA received 10 comments.

1. Support for rulemaking: Four commenters supported the interim final rule.

• DEA Response: The DEA appreciates the comments supporting the interim final rule.

2. Opposition for rulemaking: One commenter indicated that FDA-approved products of oral solutions containing dronabinol are in schedule II, but marijuana is in schedule I. Two commenters expressed concern that pharmaceutical companies are making a profit from approved drugs containing marijuana constituents. One commenter indicated that FDA should not approve drugs containing constituents of marijuana because, as the commenter alleged, of the lethality of those drugs.

• DEA Response: The DEA notes that FDA-approved products of oral solutions containing dronabinol have an approved medical use, whereas marijuana does not have an approved medical use and therefore remains in schedule I. Regarding the comments related to pharmaceutical companies and the approval of FDA drugs, these comments are outside the scope of this rulemaking because they do not relate to the factors determinative of control of a substance [21 U.S.C. 811(c)] or the criteria for placement of a substance in a particular schedule [21 U.S.C. 812(b)].

3. Request for clarification: One other commenter wanted clarification of the approval process, including effectiveness on a long-term basis. One commenter indicated hope that the regulation would clarify hiring practices for people testing positive for THC.

• DEA Response: The DEA notes that the comment regarding the approval process is written in vague terms; we interpret the comment to pertain to the FDA-approved drug product Syndros, rather than the regulatory process for the interim final rule, and respond accordingly. As such, the DEA notes that the FDA approved a New Drug Application (NDA) for Syndros which is an oral product containing dronabinol and provided the DEA with a scheduling recommendation for Syndros. The scheduling recommendation by HHS and the FDA approval of the NDA initiated the DEA review and scheduling action. As stated in the interim final rule, after careful consideration of data from preclinical and clinical studies, the DEA concurred with the HHS recommendation that Syndros has abuse potential comparable to other schedule II substances and therefore supported—and continues to support in this final rule—placement of FDA-approved products containing dronabinol in an oral solution in Schedule II under the Controlled Substances Act (CSA). Regarding the commenter seeking clarification on hiring practices, this comment is outside the scope of this rulemaking because it does not relate to the factors determinative of control of a substance [21 U.S.C. 811(c)] or the criteria for placement of a substance in a particular schedule [21 U.S.C. 812(b)].

The DEA did not receive any requests for hearing or waiver. Based on the rationale set forth in the interim final rule, the DEA adopts the interim final rule, without change.

As DEA stated in the interim final rule, it should be noted as a preliminary matter that any form of dronabinol other than in an FDA-approved drug product remains a schedule I controlled substance, and those who handle such material remain subject to the regulatory controls, and administrative, civil, and criminal sanctions, applicable to schedule I controlled substances set forth in the CSA and DEA regulations. However, for those who handle dronabinol oral solution exclusively in the form of an FDA-approved drug product, the following is a summary of the schedule II regulatory requirements that remain in effect as a result of this final rule.

FDA-approved products containing dronabinol in an oral solution have been controlled as a schedule II controlled substance since March 23, 2017. With publication of this final rule, such products remain subject to the CSA's schedule II regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, reverse distribution, dispensing, importing, exporting, research, and conduct of instructional activities and chemical analysis with, and possession involving schedule II substances, including the following:

1. Registration. Any person who handles (manufactures, distributes, reverse distributes, dispenses, imports, exports, engages in research, or conducts instructional activities or chemical analysis with, or possesses) FDA-approved products containing dronabinol in an oral solution, or who desires to handle such products, must be registered with the DEA to conduct such activities pursuant to 21 U.S.C. 822, 823, 957, and 958 and in accordance with 21 CFR parts 1301 and 1312.

2. Quota. Only registered manufacturers are permitted to manufacture FDA-approved products containing dronabinol in an oral solution in accordance with a quota assigned pursuant to 21 U.S.C. 826 and in accordance with 21 CFR part 1303.

3. Disposal of stocks. Upon obtaining a schedule II registration to handle FDA-approved products containing dronabinol in an oral solution, any person who does not desire or is not able to maintain such registration must surrender all quantities of such products, or may transfer all quantities of such products to a person registered with the DEA in accordance with 21 CFR part 1317, in addition to all other applicable federal, state, local, and tribal laws.

4. Security. FDA-approved products containing dronabinol in an oral solution are subject to schedule II security requirements and must be handled and stored pursuant to 21 U.S.C. 821, 823, and in accordance with 21 CFR 1301.71-1301.93.

5. Labeling and Packaging. All labels, labeling, and packaging for commercial containers of FDA-approved products containing dronabinol in an oral solution must comply with 21 U.S.C. 825 and 958(e), and be in accordance with 21 CFR part 1302.

6. Inventory. Every DEA registrant who possesses any quantity of FDA-approved products containing dronabinol in an oral solution must take an inventory of such products on hand, pursuant to 21 U.S.C. 827 and 958, and in accordance with 21 CFR 1304.03, 1304.04, and 1304.11.

7. Records and Reports. Every DEA registrant must maintain records and submit reports for FDA-approved products containing dronabinol in an oral solution, pursuant to 21 U.S.C. 827 and 958(e), and in accordance with 21 CFR parts 1304, 1312, and 1317.

8. Order Forms. Every DEA registrant who distributes FDA-approved products containing dronabinol in an oral solution is required to comply with order form requirements, pursuant to 21 U.S.C. 828, and in accordance with 21 CFR part 1305.

9. Prescriptions. All prescriptions for FDA-approved products containing dronabinol in an oral solution must comply with 21 U.S.C. 829, and be issued in accordance with 21 CFR parts 1306 and 1311, subpart C.

10. Manufacturing and Distributing. In addition to the general requirements of the CSA and DEA regulations that are applicable to manufacturers and distributors of schedule II controlled substances, such registrants should be advised that (consistent with the foregoing considerations) any manufacturing or distribution of FDA-approved products containing dronabinol in an oral solution may only be for the legitimate purposes authorized by the FDCA and CSA.

11. Importation and Exportation. All importation and exportation of FDA-approved products containing dronabinol in an oral solution must be in compliance with 21 U.S.C. 952, 953, 957, and 958, and in accordance with 21 CFR part 1312.

12. Liability. Any activity involving FDA-approved products containing dronabinol in an oral solution not authorized by, or in violation of, the CSA or its implementing regulations, is unlawful, and may subject the person to administrative, civil, and/or criminal sanctions.

This final rule, without change, affirms the amendment made by the interim final rule that is already in effect. Section 553 of the Administrative Procedure Act (APA) (5 U.S.C. 553) generally requires notice and comment for rulemakings. However, Public Law 114-89 was signed into law, amending 21 U.S.C. 811. This amendment provides that in cases where a new drug is (1) approved by the Department of Health and Human Services (HHS) and (2) HHS recommends control in CSA schedule II-V, the DEA shall issue an interim final rule scheduling the drug within 90 days. This action was taken March 23, 2017. Additionally, the law specifies that the rulemaking shall become immediately effective as an interim final rule without requiring the DEA to demonstrate good cause.

In accordance with 21 U.S.C. 811(j), this scheduling action is subject to formal rulemaking procedures performed “on the record after opportunity for a hearing,” which are conducted pursuant to the provisions of 5 U.S.C. 556 and 557. The CSA sets forth the procedures and criteria for scheduling a drug or other substance. Such actions are exempt from review by the Office of Management and Budget (OMB) pursuant to section 3(d)(1) of Executive Order 12866 and the principles reaffirmed in Executive Order 13563.

This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate drafting errors and ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.

This rulemaking does not have federalism implications warranting the application of Executive Order 13132. The rule does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

This rule does not have tribal implications warranting the application of Executive Order 13175. It does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) applies to rules that are subject to notice and comment under section 553(b) of the APA. As noted in the above discussion regarding applicability of the Administrative Procedure Act, the DEA was not required to publish a general notice of proposed rulemaking prior to this final rule. Consequently, the RFA does not apply.

In accordance with the Unfunded Mandates Reform Act (UMRA) of 1995, 2 U.S.C. 1501 et seq., the DEA has determined that this action would not result in any Federal mandate that may result “in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted for inflation) in any one year.” Therefore, neither a Small Government Agency Plan nor any other action is required under UMRA of 1995.

This action does not impose a new collection of information requirement under the Paperwork Reduction Act of 1995. 44 U.S.C. 3501-3521. This action would not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (Congressional Review Act (CRA)). This rule will not result in: An annual effect on the economy of $100,000,000 or more; a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of U.S.-based companies to compete with foreign based companies in domestic and export markets. However, pursuant to the CRA, the DEA has submitted a copy of this final rule to both Houses of Congress and to the Comptroller General.

As a result of Hurricane Maria, participants and beneficiaries covered by group health plans, disability or other welfare plans, and pension plans may encounter problems in exercising their health coverage portability and continuation coverage rights, or in filing or perfecting their benefit claims. Recognizing the numerous challenges already facing affected participants and beneficiaries, it is important that plans and the Employee Benefits Security Administration, Department of Labor and Internal Revenue Service, Department of the Treasury (the Agencies) take steps to minimize the possibility of individuals losing benefits because of a failure to comply with certain pre-established time frames. Similarly, the Agencies recognize that affected group health plans may have difficulty in complying with certain notice obligations.

Accordingly, under the authority of section 518 of the Employee Retirement Income Security Act of 1974 (ERISA), and section 7508A of the Internal Revenue Code of 1986 (the Code), the Agencies are extending certain time frames otherwise applicable to group health plans, disability and other welfare plans, pension plans, and their participants and beneficiaries under ERISA and the Code.1

The Agencies believe that such relief is immediately needed to preserve and protect the benefits of participants and beneficiaries in affected plans. Accordingly, the Agencies have determined, pursuant to section 553 of the Administrative Procedure Act, 5 U.S.C. 553(b) and (d), that there is good cause for granting the relief provided by this notice effective immediately upon publication and that notice and public participation may result in undue delay and, therefore, be contrary to the public interest.

This document has been reviewed by the Department of Health and Human Services (HHS), which concurs with the relief. HHS encourages plan sponsors of nonfederal governmental group health plans to provide the relief specified in this guidance. HHS also encourages States, and health insurance issuers, to enforce and operate, respectively, in a manner consistent with the relief provided in this guidance.2

The relief provided by this Notice supplements other disaster relief guidance, which can be accessed on the Internet at: https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/disaster-relief and https://www.irs.gov/newsroom/tax-relief-in-disaster-situations.

Title I of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) provides portability of group health coverage by, among other things, requiring special enrollment rights. ERISA section 701, Code section 9801, 29 CFR 2590.701-6, 26 CFR 54.9801-6. Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) permits qualified beneficiaries who lose coverage under a group health plan to elect continuation health coverage. ERISA section 601, Code section 4980B, 26 CFR 54.4980B-1. Section 503 of ERISA and 29 CFR 2560.503-1 require employee benefit plans subject to Title I of ERISA to establish and maintain reasonable procedures governing the determination and appeal of claims for benefits under the plan. Section 2719 of the Public Health Service Act (PHS Act), incorporated into ERISA by ERISA section 715 and into the Code by Code section 9815, imposes additional rights and obligations with respect to claims, appeals, and external review for nongrandfathered group health plans and health insurance issuers offering nongrandfathered coverage. See also 29 CFR 2590.715-2719 and 26 CFR 54.9815-2719. All of the foregoing provisions include timing requirements for certain acts in connection with employee benefit plans, some of which are being modified by this notice.

In general, the HIPAA special enrollment provisions require that a special enrollment period must be provided in certain circumstance including circumstances in which an employee or dependent loses eligibility for any group health plan or other health insurance coverage in which the employee or the employee's dependents were previously enrolled (including coverage under Medicaid and the Children's Health Insurance Program), and upon certain life events such as when a person becomes a dependent of an eligible employee by birth, marriage, or adoption. ERISA section 701(f), Code section 9801(f), 29 CFR 2590.701-6, and 26 CFR 54.9801-6. Generally, group health plans must allow such individuals to enroll in the group health plan if they are otherwise eligible and if enrollment is requested within 30 days of the occurrence of the event (or within 60 days, in the case of the special enrollment rights added by the Children's Health Insurance Program Reauthorization Act of 2009). ERISA section 701(f), Code section 9801(f), 29 CFR 2590.701-6, and 26 CFR 54.9801-6.

The COBRA continuation coverage provisions generally provide a qualified beneficiary a period of at least 60 days to elect COBRA continuation coverage under a group health plan. ERISA section 605 and Code section 4980B(f)(5). Plans are required to allow payment of premiums in monthly installments, and plans cannot require payment of premiums before 45 days after the day of the initial COBRA election. ERISA section 602(3) and Code section 4980B(f)(2)(C). COBRA continuation coverage may be terminated for failure to pay premiums timely. ERISA section 602(2)(C) and Code section 4980B(f)(2)(B)(iii). Under the COBRA rules, a premium is considered paid timely if it is made not later than 30 days after the first day of the period for which payment is being made. ERISA section 602(2)(C), Code section 4980B(f)(2)(B)(iii), and 26 CFR 54.4980B-8 Q&A-5(a). Notice requirements prescribe time periods for employers to notify the plan of certain qualifying events and for individuals to notify the plan of certain qualifying events or a determination of disability; notice requirements also prescribe a time period for plans to notify qualified beneficiaries of their rights to elect COBRA continuation coverage. ERISA section 606, Code section 4980B(f)(6), and 29 CFR 2590.606-3.

Section 503 of ERISA and 29 CFR 2560.503-1, as well as section 2719 of the PHS Act, incorporated into ERISA by ERISA section 715 and into the Code by Code section 9815, 29 CFR 2590.715-2719, and 26 CFR 54.9815-2719, require ERISA-covered employee benefit plans and nongrandfathered group health plans and health insurance issuers to establish and maintain a procedure governing the filing and initial disposition of benefit claims, and to provide claimants with a reasonable opportunity to appeal an adverse benefit determination to an appropriate named fiduciary. Plans may not have provisions that unduly inhibit or hamper the initiation or processing of claims for benefits. Further, group health plans and disability plans must provide claimants at least 180 days following receipt of an adverse benefit determination to appeal (60 days in the case of pension plans and other welfare benefit plans). 29 CFR 2560.503-1(h)(2)(i), 29 CFR 2560.503-1(h)(3)(i), 29 CFR 2590.715-2719(b)(2)(ii)(C), and 26 CFR 54.9815-2719(b)(2)(ii)(C).

PHS Act section 2719, incorporated into ERISA by ERISA section 715 and into the Code by Code section 9815, sets out standards for external review that apply to nongrandfathered group health plans and health coverage and provides for either a State external review process or a Federal external review process. Standards for external review processes and timeframes for submitting claims to the independent reviewer for group health plans or health insurance issuers may vary depending on whether a plan uses a State external review process or a Federal external review process. For plans or issuers that use the Federal external review process, the process must allow at least four months after the receipt of a notice of an adverse benefit determination or final internal adverse benefit determination for a request for an external review to be filed. 29 CFR 2590.715-2719(d)(2)(i) and 26 CFR 54.9815-2719(d)(2)(i). The Federal external review process also provides for a preliminary review of a request for external review. The regulation provides that if such request is not complete, the Federal process must provide for a notification that describes the information or materials needed to make the request complete, and the plan or issuer must allow a claimant to perfect the request for external review within the four-month filing period or within the 48 hour period following the receipt of the notification, whichever is later. 29 CFR 2590.715-2719(d)(2)(ii)(B) and 26 CFR 54.9815-2719(d)(2)(ii)(B).

With respect to plan participants, beneficiaries, qualified beneficiaries, or claimants directly affected by Hurricane Maria (as defined in paragraph III.C.(1)), group health plans, disability and other welfare plans, pension plans, and health insurance issuers offering coverage in connection with a group health plan must disregard the period from September 17, 2017 through March 16, 2018 for such plan participants, beneficiaries, qualified beneficiaries, or claimants located in Puerto Rico, and must disregard the period from September 16, 2017 through March 15, 2018 for such plan participants, beneficiaries, qualified beneficiaries, or claimants located in the United States Virgin Islands, when determining any of the following time periods and dates—

(1) The 30-day period (or 60-day period, if applicable) to request special enrollment under ERISA section 701(f) and Code section 9801(f),

(2) The 60-day election period for COBRA continuation coverage under ERISA section 605 and Code section 4980B(f)(5),3

(3) The date for making COBRA premium payments pursuant to ERISA section 602(2)(C) and (3) and Code section 4980B(f)(2)(B)(iii) and (C),

(4) The date for individuals to notify the plan of a qualifying event or determination of disability under ERISA section 606(a)(3) and Code section 4980B(f)(6)(C),

(5) The date within which individuals may file a benefit claim under the plan's claims procedure pursuant to 29 CFR 2560.503-1,

(6) The date within which claimants may file an appeal of an adverse benefit determination under the plan's claims procedure pursuant to 29 CFR 2560.503-1(h),

(7) The date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination pursuant to 29 CFR 2590.715-2719(d)(2)(i) and 26 CFR 54.9815-2719(d)(2)(i), and

(8) The date within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete pursuant to 29 CFR 2590.715-2719(d)(2)(ii) and 26 CFR 54.9815-2719(d)(2)(ii).

With respect to group health plans, and their sponsors and administrators, that are directly affected by Hurricane Maria (as defined in paragraph III.C.(3)), the period from September 17, 2017 through March 16, 2018 for those located in Puerto Rico, and the period from September 16, 2017 through March 15, 2018 for those located in the United States Virgin Islands, shall be disregarded when determining the date for providing a COBRA election notice under ERISA section 606(c) and Code section 4980B(f)(6)(D).

For purposes of this notice—

(1) A participant, beneficiary, qualified beneficiary, or claimant directly affected by Hurricane Maria means an individual who resided, lived, or worked in one of the disaster areas (as defined in paragraph III.C.(2)) at the time of the hurricane, or whose employee benefit plan was directly affected (as defined in paragraph III.C.(3)), but solely with respect to that employee benefit plan.

(2) The term “disaster areas” means the counties in Puerto Rico and the counties and county equivalents in the United States Virgin Islands that have been or are later designated as disaster areas eligible for Individual Assistance by the Federal Emergency Management Agency because of the devastation caused by Hurricane Maria.

(3) An employee benefit plan is directly affected by Hurricane Maria if the principal place of business of the employer that maintains the plan (in the case of a single-employer plan, determined disregarding the rules of section 414(b) and (c) of the Code); the principal place of business of employers that employ more than 50 percent of the active participants covered by the plan (in the case of a plan covering employees of more than one employer, determined disregarding the rules of section 414(b) and (c) of the Code); the office of the plan or the plan administrator; or the relevant office of the primary recordkeeper serving the plan was located in one of the disaster areas (as defined in paragraph III.C.(2)) at the time of the hurricane.

The Agencies will continue to monitor the effects of Hurricane Maria and may provide additional relief as warranted.

The following examples illustrate the timeframe for extensions required by this notice. In each example, assume that the individual described is directly affected by the hurricane.

Example 1 (Electing COBRA). (i) Facts. Individual A works for Employer X in Puerto Rico and participates in X's group health plan. On September 20, 2017, the day Hurricane Maria made landfall, X's business is destroyed, and the plan ceases to function. A has no other coverage. Employer Y is part of the same controlled group as X and continues to operate and sponsor a group health plan. A is provided a COBRA election notice on December 1, 2017. What is the deadline for A to elect COBRA?

(ii) Conclusion. In this Example 1, A is eligible to elect COBRA coverage under Employer Y's plan because Employer Y is in the same controlled group as Employer X. 4 The period from September 17, 2017 through March 16, 2018 is disregarded for purposes of determining A's COBRA election period. The last day of A's COBRA election period is 60 days after March 16, 2018, which is May 15, 2018.

Example 2 (Special enrollment period). (i) Facts. Individual B resides in the United States Virgin Islands. B is eligible for, but previously declined participation in, her employer-sponsored group health plan. On October 31, 2017, B gives birth and would like to enroll herself and the child into her employer's plan; however, open enrollment does not begin until November 15.

(ii) Conclusion. In this Example 2, the period from September 16, 2017 through March 15, 2018 is disregarded for purposes of determining B's special enrollment period. B may special enroll herself and her child into her employer's plan as early as the date of the child's birth, and the last day B may special enroll herself and her child into her employer's plan is 30 days after March 15, 2018, which is April 14, 2018.

Example 3 (COBRA premium payments). (i) Facts. Individual C resides in Puerto Rico. Before the hurricane, C was receiving COBRA continuation coverage under a group health plan. More than 45 days had passed since C had elected COBRA. Monthly premium payments are due by the first of the month. The plan does not permit qualified beneficiaries longer than the statutory 30-day grace period for making premium payments. C made a timely September payment, but did not make an October payment before the hurricane.

(ii) Conclusion. In this Example 3, the period from September 17, 2017 through March 16, 2018 is disregarded for purposes of making monthly COBRA premium installment payments. Premium payments made by 30 days after March 16, 2018, which would be April 15, 2018 for October, November, and December of 2017, and January, February, and March of 2018, are timely, and C is entitled to COBRA continuation coverage for these months.

Example 4 (COBRA premium payments). (i) Facts. Same facts as Example 3. By April 15, 2018, a payment equal to two months' premium has been made for C.

(ii) Conclusion. C is entitled to COBRA continuation coverage for October and November 2017, the two months for which timely premium payments were made, and C is not entitled to COBRA continuation coverage for any month after November 2017.

Example 5 (Claims for medical treatment under a group health plan). (i) Facts. Individual D resides in the United States Virgin Islands and is a participant in a group health plan. On October 1, 2017, D received medical treatment for a condition covered under the plan, but a claim relating to the medical treatment was not submitted until later. Under the plan, claims must be submitted within 365 days of the participant's receipt of the medical treatment.

(ii) Conclusion. For purposes of determining the 365-day period applicable to D's claim, the period from October 1, 2017 through March 15, 2018 is disregarded. Therefore, D's last day to submit a claim is 365 days after March 15, 2018, which is March 15, 2019.

Example 6 (Internal appeal). (i) Facts. Individual E resides in Puerto Rico. E received a notification of an adverse benefit determination from E's disability plan on August 15, 2017. The notification advised E that there are 180 days within which to file an appeal.

(ii) Conclusion. When determining the 180-day period within which E's appeal must be filed, the period from September 17, 2017 through March 16, 2018 is disregarded. Therefore, E's last day to submit an appeal is 148 days after March 16, 2018, which is August 11, 2018.

On September 26, 2017, the Coast Guard published a temporary deviation entitled “Drawbridge Operation Regulation; Southern Branch of the Elizabeth River, Chesapeake, VA” in the Federal Register (82 FR 44733). That document resulted from Virginia State Department of Transportation's request for a temporary deviation, occurring from 7 a.m. on October 2, 2017, through 11 p.m. on November 22, 2017, from the normal operation of the drawbridge to accommodate routine maintenance to bridge. Subsequent to the approval of that request, Virginia State Department of Transportation requested a modification to the temporary deviation, starting from 11:01 p.m. on November 22, 2017, through 11 p.m. on December 3, 2017, to allow more time to remove and replace the center locks and install new electrical wiring and lubrication piping. Therefore, through this document, the Coast Guard modifies the dates of the previously approved temporary deviation to allow the I-64 (High Rise) Bridge across the Atlantic Intracoastal Waterway, Southern Branch of the Elizabeth River, mile 7.1, at Chesapeake, VA, to remain in the closed-to-navigation position from Midnight on November 29, 2017, through 11 p.m. on December 3, 2017. At all other times, the bridge will open on signal if at least 24 hours notice is given. The bridge has a vertical clearance of 65 feet above mean high water in the closed position. The current operating schedule is set out in 33 CFR 117.997(e).

Vessels able to pass through the bridge in the closed position may do so if at least 15 minutes notice is given. The bridge will not be able to open for emergencies and there is no immediate alternate route for vessels unable to pass through the bridge in the closed position. The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notice to Mariners of the change in operating schedule for the bridge so that vessel operators can arrange their transits to minimize any impact caused by this temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of this effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

On May 8, 2017, the Maryland Department of the Environment (MDE) submitted on behalf of the State of Maryland a formal revision, requesting EPA's approval for the SIP of its NNSR Certification for the 2008 Ozone Standard (Revision 17-01). The SIP revision is in response to EPA's final 2008 8-hour ozone NAAQS Findings of Failure to Submit for NNSR requirements. See 82 FR 9158 (February 3, 2017). Specifically, Maryland is certifying that its existing NNSR program, covering the Baltimore Nonattainment Area (which includes Anne Arundel, Baltimore, Carroll, Harford, and Howard Counties and the city of Baltimore), the Philadelphia-Wilmington-Atlantic City Nonattainment Area (which includes Cecil County in Maryland), and the Washington, DC Nonattainment Area (which includes Calvert, Charles, Frederick, Montgomery, and Prince Georges Counties in Maryland) for the 2008 8-hour ozone NAAQS, is at least as stringent as the requirements at 40 CFR 51.165, as amended by the final rule titled “Implementation of the 2008 National Ambient Air Quality Standards for Ozone: State Implementation Plan Requirements” (SIP Requirements Rule), for ozone and its precursors.1 See 80 FR 12264 (March 6, 2015).

Please see additional information provided in the direct final action published in the Federal Register on September 29, 2017 (82 FR 45475) and in the companion proposed rule which was also published on September 29, 2017 (82 FR 45547). In the DFR, we stated that if we received adverse comment by October 30, 2017, the rule would be withdrawn and not take effect. EPA subsequently received an adverse comment. As a result of the comment received, EPA is withdrawing the direct final rule approving Maryland's SIP revision related to NNSR requirements for the 2008 8-hour ozone standard.

On December 20, 2016, the State of Maryland submitted the 2011 base year emission inventory through the Maryland Department of the Environment (MDE) to meet the nonattainment requirements for moderate ozone nonattainment areas for the 2008 8-hour ozone NAAQS. In the direct final rule published on October 3, 2017 (82 FR 45997), EPA stated that if EPA received adverse comments by November 2, 2017, the rule would be withdrawn and not take effect. EPA subsequently received adverse comments from anonymous commenters.

Because adverse comments were received, EPA is withdrawing the direct final rule approving the revisions to the Maryland SIP that approves the 2011 base year inventory for the Baltimore, Maryland moderate nonattainment area for the 2008 8-hour ozone NAAQS on October 3, 2017 (82 FR 45997). EPA will respond to the adverse comments in a separate final rulemaking action.

The Atlantic commercial shark fisheries are managed under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). The 2006 Consolidated HMS Fishery Management Plan (FMP) and its amendments are implemented by regulations at 50 CFR part 635. For the Atlantic commercial shark fisheries, the 2006 Consolidated HMS FMP and its amendments established, among other things, commercial shark retention limits, commercial quotas for species and management groups, accounting measures for under- and overharvests for the shark fisheries, and adaptive management measures such as flexible opening dates for the fishing season and inseason adjustments to shark trip limits, which provide management flexibility in furtherance of equitable fishing opportunities, to the extent practicable, for commercial shark fishermen in all regions and areas.

On August 22, 2017 (82 FR 39735), NMFS published a proposed rule for the 2018 opening dates for the Atlantic commercial shark fisheries, commercial shark fishing quotas based on shark landings information reported as of July 14, 2017, and the commercial shark retention limits for each region and sub-region. The August 2017 proposed rule (82 FR 39735; August 22, 2017) for the 2018 season contains details about the action that are not repeated here. The comment period on the proposed rule ended on September 21, 2017.

During the comment period, NMFS received approximately 13 written and oral comments on the proposed rule. Those comments, along with the Agency's responses, are summarized below. As further detailed in the Response to Comments section below, after considering all the comments, NMFS is opening the fishing seasons for all shark management groups on January 1, 2018, as proposed. For directed shark limited access permit holders, the blacktip, aggregated LCS, and hammerhead management groups in the entire Gulf of Mexico region will start the fishing season with a retention limit of 45 LCS other than sandbar sharks per vessel per trip, which is a change from the proposed rule's retention limit of 50 LCS other than sandbar sharks per vessel per trip. The aggregated LCS and hammerhead shark management groups in the Atlantic region will start the fishing season with a retention limit of 25 LCS other than sandbar sharks per vessel per trip for directed shark limited access permit holders, as proposed. The retention limit for incidental shark limited access permit holders for all regions has not changed from the proposed rule and remains at 3 LCS other than sandbar sharks per trip and a combined total of 16 small coastal sharks (SCS) and pelagic sharks, combined per trip consistent with § 635.24(a)(3) and (4). Additionally, the retention limit for blacknose sharks for all permit holders in the Atlantic region south of 34°00′ N. lat. has not changed from the proposed rule and is 8 blacknose sharks per trip consistent with § 635.24 (a)(4).

This final rule serves as notification of the 2018 opening dates for the Atlantic commercial shark fisheries and 2018 retention limits and quotas, based on shark landings data updated as of October 23, 2017, and considering the “opening commercial fishing season” criteria at § 635.27(b)(3). Criteria considered include available annual quotas for the current fishing season, estimated season length and average weekly catch rates from previous years, length of the season and fishermen participation in past years, impacts to accomplishing objectives of the 2006 Consolidated HMS FMP and its amendments, temporal variation in behavior or biology of target species (e.g., seasonal distribution or abundance), impact of catch rates in one region on another, and effects of delayed season openings. While this action adjusts certain quotas as allowable, this action does not establish or change the annual baseline commercial quotas established under the 2006 Consolidated HMS FMP and its amendments for any shark management group. The baselines quotas were established under previous actions, and any changes to those baseline quotas would be performed through a separate action. Rather, this action adjusts the annual commercial quotas for 2018 based on over- and/or underharvests that occurred in 2017 and previous fishing seasons, consistent with existing regulations, and establishes the opening dates for the fisheries. All of the shark management group adjusted quotas remain the same as proposed.

NMFS received approximately 13 written and oral comments on the proposed rule from fishermen, dealers, and other interested parties. All written comments can be found at http://www.regulations.gov/ by searching for RIN 0648-XF486. NMFS received approximately six oral comments through phone conversations or at the HMS Advisory Panel meeting on September 6, 2017. All of the comments received are summarized below.

Comment 1: NMFS received comments regarding the proposed opening date of January 1 for the western Gulf of Mexico LCS fisheries. Some commenters supported the proposed January 1 opening date for both Gulf of Mexico sub-regions, while other commenters supported a delayed western Gulf of Mexico opening date of January 15 or February 1 to coincide with the religious holiday of Lent, which is often associated with higher ex-vessel prices.

Response: After considering public comment and the “opening commercial fishing season” criteria (§ 635.27(b)(3)) described in the proposed rule, NMFS has determined that opening the Gulf of Mexico blacktip, aggregated LCS, and hammerhead shark management groups on January 1, as proposed, will promote equitable fishing opportunities throughout the Gulf of Mexico region. In reaching this determination, NMFS considered, in particular, the regulatory criterion regarding the length of the season in previous years for the different species and/or management groups and whether fishermen had been able to participate in the fishery in those years (§ 635.27(b)(3)(iii)), and found that with a January 1 opening date in 2016, the length of the fishing season provided all fishermen with equitable fishing opportunities to participate in the fishery in 2016. Specifically, in 2016, NMFS opened the season on January 1 and closed it on March 12, 2016 (81 FR 12602). In other words, in 2016, while the fishery closed before April 1 (which is when the State of Louisiana annually plans a state-water closure), all fishermen in the sub-region had the same opportunities. In 2017, NMFS opened the season on February 1 and closed it on May 2, 2017 (82 FR 20447). The delayed opening in 2017 allowed Louisiana state-water fishermen only two months to fish given the State of Louisiana's annual state-water closure from April 1 through June 30; fishermen in other parts of the sub-region could continue fishing after April 1. Thus, opening the season in January should give all fishermen in the sub-region a fishing season of equal duration given the State of Louisiana closure, and an equitable opportunity to harvest the quota before the state-water closure.

Comment 2: NMFS received comments regarding the proposed change in the commercial retention limit for the blacktip, aggregated LCS, and hammerhead management groups in the eastern Gulf of Mexico sub-region from the default (and current) level of 45 to 50 LCS other than sandbar sharks per vessel per trip. NMFS received a comment in support of the proposed higher retention limit of 50 LCS other than sandbar sharks per vessel per trip and a comment in support of the current retention limit of 45 LCS other than sandbar sharks per vessel per trip to ensure the season lasts most of the year.

Response: NMFS has determined that the default retention limit of 45 LCS other than sandbar sharks per vessel per trip at the start of the season will ensure equitable fishing opportunities in the eastern Gulf of Mexico sub-region. In the proposed rule, because the management groups remained open all of 2016 and because the relevant management groups were underharvested in 2016, NMFS proposed a higher trip limit (50 LCS other than sandbar sharks per vessel per trip) in order to allow fishermen to fully harvest the blacktip, aggregated LCS, and hammerhead management group quotas, presuming that future catch rates might be expected to be similar. However, as of October 23, 2017, the landings in 2017 are higher than at that time in 2016, and NMFS is considering whether it will be necessary to close the fishery to avoid overharvest of the quota. With the updated information showing an increase in the 2017 eastern Gulf of Mexico blacktip, aggregated LCS, and hammerhead management group landings, NMFS has decided to start the commercial retention limit at 45 LCS other than sandbar sharks per vessel per trip. However, NMFS may adjust the retention limit during the fishing season as appropriate after considering the relevant regulatory criteria.

Comment 3: NMFS received comments in support the proposed opening date of January 1, retention limit, and inseason retention limit adjustments for the aggregated LCS and hammerhead management groups in the Atlantic region as long as majority of the quota is available later in the year.

Response: After considering the “opening commercial fishing season” regulatory criteria in light of the comments, which reflected support of the proposed opening date, NMFS has decided to open the fisheries in the Atlantic region on January 1, as proposed. Specifically, on January 1, 2018, the LCS fisheries in the Atlantic region will open with a retention limit of 25 LCS other than sandbar sharks per vessel per trip for directed shark limited access permit holders. The January 1 opening date should allow fishermen in the southern and northern portions of the Atlantic region the opportunity to fish at the beginning of the year. NMFS will consider further adjusting the commercial retention limit during the season as appropriate, after considering the applicable criteria, to provide all fishermen in the Atlantic region fishing opportunities later in the year as well, since the majority of the quota should still be available and the majority of fishing occurs later in the year. The proposed rule stated that, if it appears that the quota is being harvested too quickly to allow fishermen throughout the entire region an opportunity to fish, NMFS will consider reducing the commercial retention limit after a portion of the quota is harvested (e.g., 20 percent) and later consider raising the commercial retention limit to 36 LCS other than sandbar sharks per vessel per trip around July 15 to allow greater fishing opportunities later in the year. This is the same approach that has been used in 2016 and 2017. Specifically, in 2017, NMFS started with a retention limit of 25 LCS other than sandbar sharks per vessel per trip on January 1 and then reduced the commercial retention to 3 LCS other than sandbar sharks per vessel per trip on April 15, 2017 (82 FR 17765; April 13, 2017) when the aggregated LCS quota reached 19.5% of the available quota. NMFS increased the retention limit to 36 LCS other than sandbar sharks per vessel per trip on July 16, 2017 (82 FR 32490; July 14, 2017) and, as of the drafting of this final rule, the current fishing season remains open. Thus, based on how the most recent previous seasons have operated to date, NMFS has determined that a lower retention limit at the start of the season will allow NMFS to more easily and closely monitor the quota and catch rates in the beginning of the year to help ensure equitable fishing opportunities later in the year, while acknowledging that the majority of quota generally is harvested later in the year (see the criteria listed at § 635.24(a)(8)(iii)).

Comment 4: NMFS received several comments in support of the proposed rule and more generally in favor of regulating commercial shark fishing, while other commenters opposed any regulations that allow shark fishing. Commenters who supported the regulation of shark fisheries stated the importance of sharks to the ecosystem. However, one commenter expressed concern about adequate enforcement of the quotas and retention limits including concerns about falsified reporting. The commenters who were opposed to the proposed rule specifically requested a closure of all shark fisheries; wanted more scientific justification of the LCS retention limit change; and were concerned about the mortality of prohibited sharks and other bycatch, shark finning, and consistency with unspecified provisions in international agreements, such as the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

Response: In this rule, NMFS's goal is to establish quotas for the Atlantic shark fisheries based upon the baseline quotas previously established in the 2006 Consolidated HMS FMP and its amendments (http://www.nmfs.noaa.gov/sfa/hms/documents/fmp/index.html), and based on allowable adjustments as a result of over- or underharvests in 2017 and previous years. Generally, when establishing the shark commercial baseline quotas, NMFS uses the total allowable catch (TAC) calculated during the stock assessment. NMFS then subtracts all other sources of mortality, including recreational landings, commercial discards, post-release mortality, and research set-aside mortality; the remaining portion is the commercial baseline quota. In establishing these baseline quotas through an FMP amendment, NMFS takes into account the fishery impacts on essential fish habitat, protected resources, and the environment in general in order to fulfill requirements for the associated FMP amendment along with socioeconomic value of these shark species to various groups. Thus, the commenter's concern that the impacts of fishing for sharks on the environment and other protected species have not been properly analyzed nor considered are not warranted.

Regarding the comment about adequate enforcement and falsified reporting, NMFS takes enforcement of these regulations seriously. If suspected illegal activities are observed in any fishery and/or region, specific information regarding such incidents can be reported to NOAA Office of Law Enforcement Division (http://www.nmfs.noaa.gov/ole/) through the national enforcement hotline at 1-800-853-1964. All commercial shark landings and quotas are monitored with the HMS electronic dealer reporting system, which has been in use since 2013. This improvement in commercial quota monitoring technology and the weekly reporting provides more information on each dealer transaction, including all shark landings to the species level, and ensures that quotas are not exceeded. Overall, this improvement helps with monitoring of commercial landings of all shark species and with closing management groups in an efficient and timely manner. In addition, NMFS can verify and detect falsified reporting by dealers and fishermen by cross-checking dealer reports to fishermen's logbooks.

Regarding comments that requested a closure of all sharks fisheries or that raised concerns regarding the scientific justification of the range of allowable retention limits adopted in an earlier rulemaking (Amendment 6 to the 2006 Consolidated HMS FMP) and the mortality of prohibited sharks and other bycatch, the comments are outside the scope of this rulemaking because the purpose of this rulemaking is to adjust quotas for the 2018 shark seasons based on over- and underharvests from the previous years and set opening dates and commercial retention limits for the 2018 shark seasons. The quotas and general management measures were established in previous rulemakings, which were the final rules to implement Amendment 2 to the 2006 Consolidated HMS FMP (73 FR 35778, June 24, 2008; corrected on 73 FR 40658; July 15, 2008), Amendment 5a to the 2006 Consolidated HMS FMP (78 FR 40318; July 3, 2013), Amendment 6 to the 2006 Consolidated HMS FMP (80 FR 50073; August 18, 2015), Amendment 9 to the 2006 Consolidated HMS FMP (80 FR 73128; November 24, 2015), and Amendment 5b to the 2006 Consolidated HMS FMP (82 FR 16478; April 4, 2017). In Amendment 6 to the 2006 Consolidated HMS FMP, NMFS analyzed, among other things, the impacts and justification for increasing the LCS retention limit to a maximum of 55 LCS other than sandbar sharks per vessel per trip. In Amendment 5b to the 2006 Consolidated HMS FMP, NMFS implemented management measures to end overfishing of dusky sharks, which is a prohibited species, and clarified the annual catch limits (ACLs) for the prohibited shark species complex. Management of the Atlantic shark fisheries is based on the best available science to achieve optimum yield while rebuilding overfished shark stocks and preventing overfishing.

Regarding the concerns about shark finning, the United States by federal law has prohibited shark finning since 2000. The Shark Finning Prohibition Act of 2000 amended the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) to prohibit any person under U.S. jurisdiction from engaging in the finning of sharks, possessing shark fins aboard a fishing vessel without the corresponding carcass, or landing shark fins without the corresponding carcass. Since 2008 in Atlantic HMS fisheries and then in 2011 nationally via the Shark Conservation Act, fishermen have been required to land sharks with fins naturally attached, with one narrow exception related to smooth dogfish so long as certain requirements are met (see Amendment 9 to the 2006 Consolidated HMS FMP).

Regarding the concerns about violating international agreements, NMFS management of the Atlantic shark fisheries is undertaken consistent with applicable international agreements and both international and domestic legal requirements are considered in our development of FMPs. NMFS continues to work with the International Commission for the Conservation of Atlantic Tunas (ICCAT) and other international entities such as CITES to appropriately and effectively manage the stocks throughout their range. Although the commenter did not specify the international agreement provisions about which they were concerned, there are no international agreement provisions that would directly affect the actions undertaken in this rulemaking related to LCS and SCS quotas, allocations, or fishing mortality levels. NMFS will continue to work with the international community to promote conservation in fisheries that span international jurisdictions.

NMFS made one change to the proposed rule. Specifically, NMFS changed the retention limit for directed shark limited access permit holders at the start of the commercial shark fishing season for the blacktip, aggregated LCS, and hammerhead shark management groups in the eastern Gulf of Mexico region from 50 LCS other than sandbar sharks per vessel per trip to 45 LCS other than sandbar sharks per vessel per trip. As explained above, NMFS changed the retention limit after considering the “opening commercial fishing season” criteria (§ 635.27(b)(3)), public comment, and the 2017 landings data in order to promote equitable fishing opportunities throughout the sub-region. We clearly noted in the proposed rule that retention limits might change in response to public comment, and this level is within the allowable range and consistent with the range established in recent years. Thus, the regulated community had sufficient notice of this possible change between the proposed and final rule.

This final rule adjusts the 2018 commercial quotas due to over- and/or underharvests in 2017 and previous fishing seasons, based on landings data through October 23, 2017. The 2018 annual quotas by species and management group are summarized in Table 1. Any dealer reports that are received by NMFS after October 23, 2017, will be used to adjust the 2019 quotas, if necessary. A description of the quota calculations is provided in the proposed rule and is not repeated here. Any changes are described in the “Changes from the Proposed Rule” section.

NMFS considered the seven “opening commercial fishing season” criteria listed in § 635.27(b)(3), as discussed above and as described in the proposed rule (82 FR 39735; August 22, 2017). These include, among other things: The available annual quotas based on any over- and/or underharvests experienced during the previous seasons; the estimated season length based on available quotas and catch rates from previous years; the length of the season in the previous years and whether fishermen were able to participate in the fishery in those years; and the effects of catch rates in one part of a region precluding vessels in another part of that region from having a reasonable opportunity to harvest a portion of the different species and/or management quotas.

Regarding the LCS retention limit, as shown in Table 2, for directed shark limited access permit holders, the Gulf of Mexico blacktip shark, aggregated LCS, and hammerhead shark management groups will start the commercial fishing season at 45 LCS other than sandbar sharks per vessel per trip, and the Atlantic aggregated LCS and hammerhead shark management groups will start the commercial fishing season at 25 LCS other than sandbar sharks per vessel per trip. These retention limits could be changed throughout the year based on consideration of the inseason trip limit adjustment criteria at 50 CFR 635.24(a)(8). In the Atlantic region specifically, as described above, NMFS will closely monitor the quota at the beginning of the year. If it appears that either the quota for the Atlantic aggregated LCS or the hammerhead shark management groups is being harvested too quickly to allow fishermen throughout the entire region an opportunity to fish (e.g., if approximately 20 percent of the quota is caught at the beginning of the year), NMFS will consider reducing the commercial retention limit, then consider raising it later in the season. Based on prior years' fishing activity, to allow more consistent fishing opportunities later in the year, NMFS anticipates considering raising the commercial retention limit to the default limit of 36 LCS other than sandbar sharks per vessel per trip around July 15, 2018.

All of the shark management groups will remain open until December 31, 2018, or until NMFS determines that the fishing season landings for any shark management group has reached, or is projected to reach, 80 percent of the available quota; however, consistent with § 635.28(b)(5), NMFS may close the Gulf of Mexico blacktip shark management group before landings reach, or are expected to reach, 80 percent of the quota. Additionally, NMFS has previously established non-linked and linked quotas; linked quotas are explicitly designed to concurrently close multiple shark management groups that are caught together to prevent incidental catch mortality from exceeding the total allowable catch. The linked and non-linked quotas are shown in Table 2. NMFS will file for publication with the Office of the Federal Register a notice of closure for that shark species, shark management group including any linked quotas, and/or region that will be effective no fewer than 5 days from date of filing. From the effective date and time of the closure until NMFS announces, via the publication of a notice in the Federal Register, that additional quota is available and the season is reopened, the fisheries for the shark species or management group are closed, even across fishing years.

The NMFS Assistant Administrator has determined that the final rule is consistent with the 2006 Consolidated HMS FMP and its amendments, other provisions of the Magnuson-Stevens Act, and other applicable law.

This final rule is exempt from review under Executive Order 12866.

In compliance with section 604 of the Regulatory Flexibility Act (RFA), NMFS prepared a Final Regulatory Flexibility Analysis (FRFA) for this final rule. The FRFA analyzes the anticipated economic impacts of the final actions and any significant economic impacts on small entities. The FRFA is below.

Section 604(a)(1) of the RFA requires an explanation of the purpose of the rulemaking. The purpose of this final rulemaking is, consistent with the Magnuson-Stevens Act and the 2006 Consolidated HMS FMP and its amendments, to establish the 2018 Atlantic commercial shark fishing quotas, retention limits, and fishing seasons. Without this rule, the Atlantic commercial shark fisheries would close on December 31, 2017, and would not reopen until another action was taken. This final rule will be implemented according to the regulations implementing the 2006 Consolidated HMS FMP and its amendments. Thus, NMFS expects few, if any, economic impacts to fishermen other than those already analyzed in the 2006 Consolidated HMS FMP and its amendments. While there may be some direct negative economic impacts associated with the opening dates for fishermen in certain areas, there could also be positive effects for other fishermen in the region. The opening dates were chosen to allow for an equitable distribution of the available quotas among all fishermen across regions and states, to the extent practicable.

Section 604(a)(2) of the RFA requires NMFS to summarize significant issues raised by the public in response to the Initial Regulatory Flexibility Analysis (IRFA), provide a summary of NMFS' assessment of such issues, and provide a statement of any changes made as a result of the comments. The IRFA was done as part of the proposed rule for the 2018 Atlantic Commercial Shark Season Specifications. NMFS did not receive any comments specific to the IRFA. However, NMFS received comments related to the overall economic impacts of the proposed rule, and those comments and NMFS' assessment of and response to them are summarized previously in the preamble (see Comment 1). As described in the responses to those comments relating to the season opening dates, consistent with § 635.27(b)(3), the opening date for all of the commercial shark fisheries will be implemented as proposed (January 1, 2018).

Section 604(a)(3) of the RFA requires NMFS 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 fish harvesters. 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 Federal Register (FR), which NMFS did on December 29, 2015 (80 FR 81194, December 29, 2015). In this final rule effective on July 1, 2016, NMFS established a small business size standard of $11 million in annual gross receipts for all businesses in the commercial fishing industry (NAICS 11411) for RFA compliance purposes (80 FR 81194, December 29, 2015). NMFS considers all HMS permit holders to be small entities because they had average annual receipts of less than $11 million for commercial fishing.

As of October 2017, the final rule would apply to the approximately 222 directed commercial shark permit holders, 269 incidental commercial shark permit holders, 148 smoothhound shark permit holders, and 113 commercial shark dealers. Not all permit holders are active in the fishery in any given year. Active directed commercial shark permit holders are defined as those with valid permits that landed one shark based on HMS electronic dealer reports. Of the 491 directed and incidental commercial shark permit holders, only 36 permit holders landed sharks in the Gulf of Mexico region and only 97 landed sharks in the Atlantic region. Of the 148 smoothhound shark permit holders, only 77 permit holders landed smoothhound sharks in the Atlantic region and none landed smoothhound sharks in the Gulf of Mexico region. NMFS has determined that the final rule would not likely affect any small governmental jurisdictions.

Section 604(a)(4) of the RFA requires NMFS to describe the projected reporting, recordkeeping, and other compliance requirements of the final rule, including an estimate of the classes of small entities which would be subject to the requirements of the report or record. None of the actions in this final rule would result in additional reporting, recordkeeping, or compliance requirements beyond those already analyzed in the 2006 Consolidated HMS FMP and its amendments.

Section 604(a)(5) of the RFA requires NMFS to describe the steps taken to minimize the economic impact on small entities, consistent with the stated objectives of applicable statutes. Additionally, the RFA (5 U.S.C. 603(c)(1)-(4)) lists four general categories of “significant” alternatives that would assist an agency in the development of significant alternatives that would accomplish the stated objectives of applicable statutes and minimize any significant economic impact of the rule on small entities. These categories of alternatives are: (1) Establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) use of performance rather than design standards; and (4) exemptions from coverage of the rule, or any part thereof, for small entities.

In order to meet the objectives of this rule, consistent with the Magnuson-Stevens Act, NMFS cannot exempt small entities or change the reporting requirements only for small entities because all the entities affected are small entities. Thus, there are no alternatives discussed that fall under the first, second, and fourth categories described above. NMFS does not know of any performance or design standards that would satisfy the aforementioned objectives of this rulemaking while, concurrently, complying with the Magnuson-Stevens Act; therefore, there are no alternatives considered under the third category.

This rulemaking does not establish management measures to be implemented, but rather implements previously adopted and analyzed measures as adjustments, as specified in the 2006 Consolidated HMS FMP and its amendments and the Environmental Assessment (EA) for the 2011 shark quota specifications rule (75 FR 76302; December 8, 2010). Thus, in this rulemaking, NMFS adjusted the baseline quotas established and analyzed in the 2006 Consolidated HMS FMP and its amendments by subtracting the underharvest or adding the overharvest, as specified and allowable in existing regulations. Under current regulations (§ 635.27(b)(2)), all shark fisheries close on December 31 of each year, or when NMFS determines that the fishing season landings for any shark management group has reached, or is projected to reach, 80 percent of the available quota, and do not open until NMFS takes action, such as this rulemaking to re-open the fisheries. Thus, not implementing these management measures would negatively affect shark fishermen and related small entities, such as dealers, and also would not provide management flexibility in furtherance of equitable fishing opportunities, to the extent practicable, for commercial shark fishermen in all regions and areas.

Based on the 2016 ex-vessel price, fully harvesting the unadjusted 2018 Atlantic shark commercial baseline quotas could result in total fleet revenues of $7,779,285 (see Table 3). For the Gulf of Mexico blacktip shark management group, NMFS will increase the baseline sub-regional quotas due to the underharvests in 2017. The increase for the western Gulf of Mexico blacktip shark management group would result in a $218,647 gain in total revenues for fishermen in that sub-region, while the increase for the eastern Gulf of Mexico blacktip shark management group would result in a $32,902 gain in total revenues for fishermen in that sub-region. For the Gulf of Mexico and Atlantic smoothhound shark management groups, NMFS will increase the baseline quotas due to the underharvest in 2017. This would cause a potential gain in revenue of $581,718 for the fleet in the Gulf of Mexico region and a potential gain in revenue of $1,084,557 for the fleet in the Atlantic region.

All of these changes in gross revenues are similar to the changes in gross revenues analyzed in the 2006 Consolidated HMS FMP and its amendments. The FRFAs for those amendments concluded that the economic impacts on these small entities are expected to be minimal. In the 2006 Consolidated HMS FMP and its amendments and the EA for the 2011 shark quota specifications rule, NMFS stated it would be conducting annual rulemakings and considering the potential economic impacts of adjusting the quotas for under- and overharvests at that time.

For this final rule, NMFS reviewed the “opening commercial fishing season” criteria at § 635.27(b)(3)(i) through (vii) to determine when opening each fishery will provide equitable opportunities for fishermen while also considering the ecological needs of the different species. Over- and/or underharvests of 2017 and previous fishing season quotas were examined for the different species/complexes to determine the effects of the 2018 final quotas on fishermen across regional fishing areas. The potential season lengths and previous catch rates were examined to ensure that equitable fishing opportunities would be provided to fishermen. Lastly, NMFS examined the seasonal variation of the different species/complexes and the effects on fishing opportunities. In addition to these criteria, NMFS also considered updated landings data and public comments on the proposed rule before arriving at the final opening dates for the 2018 Atlantic shark management groups. For the 2018 fishing season, NMFS is opening the shark management groups on January 1, 2018. The direct and indirect economic impacts will be neutral on a short- and long-term basis for the Gulf of Mexico blacktip shark, Gulf of Mexico aggregated LCS, Gulf of Mexico hammerhead shark, Gulf of Mexico non-blacknose shark SCS, Atlantic non-blacknose shark SCS, Atlantic blacknose shark, sandbar shark, blue shark, porbeagle shark, and pelagic shark (other than porbeagle or blue sharks) management groups, because NMFS did not change the opening dates of these fisheries from the status quo of January 1.

Opening the aggregated LCS and hammerhead shark management groups in the Atlantic region on January 1 will result in short-term, direct, moderate, beneficial economic impacts, as fishermen and dealers in the southern portion of the Atlantic region will be able to fish for and sell aggregated LCS and hammerhead sharks starting in January. These fishermen will be able to fish earlier in the 2018 fishing season compared to the 2010, 2011, 2012, 2014, and 2015 fishing seasons, which did not start until June or July. The opening date and retention limits finalized in this rule for the Atlantic region are the same as those for the current season and similar to those for the 2016 and 2017 seasons. For both 2016 and 2017, the fishery remained open all year with some modifications to the retention limit throughout the year.

Based on public comment on past season rules, some Atlantic fishermen in the southern and northern parts of the region prefer a January 1 opening for the fishery as long as the majority of the quota is available later in the year. With the implementation of the HMS electronic reporting system in 2013, NMFS now monitors the quota on a more real-time basis compared to the paper reporting system that was in place before 2013. This ability, along with the inseason retention limit adjustment criteria in § 635.24(a)(8), allows NMFS the flexibility to further provide equitable fishing opportunities for fishermen across all regions, to the extent practicable. Depending on how quickly the quota is being harvested, as was done in 2016 and 2017, NMFS will consider reducing the commercial retention limit, then consider raising it later in the season to ensure that fishermen farther north have sufficient quota for a fishery later in the 2018 fishing season. The direct impacts to shark fishermen in the Atlantic region of reducing the trip limit depend on the needed reduction in the trip limit and the timing of such a reduction. Therefore, such a reduction in the trip limit for directed shark limited access permit holders is only anticipated to have minor adverse direct economic impacts to fishermen in the short-term; long-term impacts are not anticipated as these reductions would not be permanent.

In the northern portion of the Atlantic region, a January 1 opening for the aggregated LCS and hammerhead shark management groups, with inseason trip limit adjustments to ensure quota is available later in the season, will have direct, minor, beneficial economic impacts in the short-term for fishermen as they will potentially have access to the aggregated LCS and hammerhead shark quotas earlier than in past seasons. Fishermen in this area have stated that, depending on the weather, some aggregated LCS species might be available to retain in January. Thus, fishermen will be able to target or retain aggregated LCS while targeting non-blacknose SCS. There will be indirect, minor, beneficial economic impacts in the short- and long-term for shark dealers and other entities that deal with shark products in this region as they will also have access to aggregated LCS products earlier than in past seasons. Thus, opening the aggregated LCS and hammerhead shark management groups in January and using inseason trip limit adjustments to ensure the fishery is open later in the year in 2018 will cause beneficial cumulative economic impacts, because it allows for a more equitable distribution of the quotas among constituents in this region, consistent with the 2006 Consolidated HMS FMP and its amendments.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, NMFS has prepared a listserv summarizing fishery information and regulations for Atlantic shark fisheries for 2018. This listserv also serves as the small entity compliance guide. Copies of the compliance guide are available from NMFS (see ADDRESSES).

Regulations implemented under the authority of the Atlantic Tunas Convention Act (ATCA; 16 U.S.C. 971 et seq.) and the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act; 16 U.S.C. 1801 et seq.) governing the harvest of BFT by persons and vessels subject to U.S. jurisdiction are found at 50 CFR part 635. Section 635.27 subdivides the U.S. BFT quota recommended by the International Commission for the Conservation of Atlantic Tunas (ICCAT) and as implemented by the United States among the various domestic fishing categories, per the allocations established in the 2006 Consolidated Highly Migratory Species Fishery Management Plan (2006 Consolidated HMS FMP) (71 FR 58058, October 2, 2006), as amended by Amendment 7 to the 2006 Consolidated HMS FMP (Amendment 7) (79 FR 71510, December 2, 2014). NMFS is required under ATCA and the Magnuson-Stevens Act to provide U.S. fishing vessels with a reasonable opportunity to harvest the ICCAT-recommended quota.

The base quota for the General category is 466.7 mt, as established in the 2015 BFT quota final rule (80 FR 52198, August 28, 2015). See § 635.27(a). Each of the General category time periods (January, June through August, September, October through November, and December) is allocated a “subquota” or portion of the annual General category quota. Although it is called the “January” subquota, the regulations allow the General category fishery under this quota to continue until the subquota is reached or March 31, whichever comes first. The subquotas for each time period are as follows: 24.7 mt for January; 233.3 mt for June through August; 123.7 mt for September; 60.7 mt for October through November; and 24.3 mt for December. Any unused General category quota rolls forward within the fishing year, which coincides with the calendar year, from one time period to the next, and is available for use in subsequent time periods.

On December 19, 2016, NMFS published an inseason action transferring 16.3 mt of quota from the December 2017 subquota to the January 2017 subquota period, resulting in a subquota of 41 mt for the January 2017 period and a subquota of 8 mt for the December 2017 period (81 FR 91873). For 2017, NMFS also transferred 40 mt from the Reserve to the General category effective March 2, resulting in an adjusted General category quota of 506.7 mt (82 FR 12747, March 7, 2017). In advance of the October 1 General category reopening, NMFS published an inseason action transferring 156.4 mt from the Reserve category to the General category to account for overharvests of the January, June through August, and September subquotas, resulting in an adjusted 2017 General category quota of 663.1 mt (82 FR 46000, October 3, 2017). NMFS closed the General category fishery when the October through November subquota (60.7 mt) was met, effective October 5, 2017 (82 FR 46934, October 10, 2017). The Harpoon category fishery automatically closed for the year on November 15, 2017. Once re-opened on December 1, the 2017 General category fishery would be open until December 31, 2017, or until the General category quota is reached, whichever comes first.

Under § 635.27(a)(9), NMFS has the authority to transfer quota among fishing categories or subcategories, after considering regulatory determination criteria at § 635.27(a)(8). NMFS has considered all of the relevant determination criteria and their applicability to the General category fishery. These considerations include, but are not limited to, the following:

NMFS considered the catches of the General category quota to date (including during the summer/fall and winter fisheries in the last several years), and the likelihood of closure of that segment of the fishery if no adjustment is made (§ 635.27(a)(8)(ii) and (ix)). Preliminary landings data as of October 31, 2017, indicate that the General category has landed 676 mt this year, which exceeds the adjusted General category quota of 663.1 mt, and the Harpoon category has landed 43 mt of the adjusted Harpoon category quota of 68.6 mt. Without a quota transfer at this time, there would be no quota available to General category participants in December because the entire adjusted General category quota of 663.1 mt has been reached and exceeded. Approximately 75 percent (816.3 mt) of the total of the BFT subquotas for all commercial categories (888.7 mt, as published in the 2015 BFT quota final rule) has been harvested as of October 31, 2017, however, and NMFS anticipates that some amount of that 888.7 mt of commercial quota may remain unused by the end of the year even with the transfer. Absent a transfer at this time, this segment of the fishery would have to remain closed if no adjustment is made, even though NMFS anticipates that commercial-sized BFT will be readily available to vessels fishing under the General category quota when the General category fishery is scheduled to reopen on December 1, 2017. Transferring 25.6 mt of BFT quota from the Harpoon category to the General category, effective December 1, 2017, would allow the General category to resume fishing and would result in an adjusted quota of 688.7 mt for the 2017 General category fishing season, and, specifically, 12.7 mt available for the December subquota period.

Regarding the projected ability of the vessels fishing under the particular category quota (here, the General category) to harvest the additional amount of BFT quota transferred before the end of the fishing year (§ 635.27(a)(8)(iii)), NMFS considered General category landings over the last several years and landings to date this year. Landings are highly variable and depend on access to commercial-sized BFT and fishing conditions, among other factors. A portion of the transferred quota covers overharvests in the category as prosecuted to date (i.e., for late-reported September landings and landings in excess of the October through November subquota), and thus has already been harvested. For the remainder of the transferred quota, which make the December subquota whole to the extent that transferrable quota is available and to utilize unused Harpoon category quota, there is a high probability that the transferred quota will be harvested during the December time period.

NMFS also considered the estimated amounts by which quotas for other gear categories of the fishery might be exceeded (§ 635.27(a)(8)(iv)) and the ability to account for all 2017 landings and dead discards. In the last several years, total U.S. BFT landings have been below the total available U.S. quota such that the United States has carried forward the maximum amount of underharvest allowed by ICCAT from one year to the next. NMFS will need to account for 2017 landings and dead discards within the adjusted U.S. quota, consistent with ICCAT recommendations, and NMFS anticipates having sufficient quota to do that.

Regarding the usefulness of information obtained from catches in the particular category for biological sampling and monitoring of the status of the stock (§ 635.27(a)(8)(i)), biological samples collected from BFT landed by General category fishermen and provided by BFT dealers continue to provide NMFS with valuable data for ongoing scientific studies of BFT age and growth, migration, and reproductive status. Additional opportunity to land BFT over the longest time-period allowable would support the collection of a broad range of data for these studies and for stock monitoring purposes.

This transfer would be consistent with the current U.S. quota, which was established and analyzed in the 2015 BFT quota final rule, and with objectives of the 2006 Consolidated HMS FMP and amendments. (§ 635.27(a)(8)(v) and (vi)). Another principal consideration is the objective of providing opportunities to harvest the full annual U.S. BFT quota without exceeding it based on the goals of the 2006 Consolidated HMS FMP and Amendment 7, including to achieve optimum yield on a continuing basis and to optimize the ability of all permit categories to harvest their full BFT quota allocations (related to § 635.27(a)(8)(x)).

Based on the considerations above, NMFS is transferring all of the remaining 25.6 mt of Harpoon category quota to the General category with the objective of accounting for underharvests of the September and October through November subquotas, providing the previously announced 8 mt of BFT quota for the December subquota period, and also utilizing the remainder of the unused Harpoon category quota. Therefore, NMFS adjusts the General category quota to 688.7 mt for the 2017 General category fishing season (i.e., through December 31, 2017, or until the General category quota is reached, whichever comes first), and adjusts the Harpoon category quota to 43 mt. This results in 12.7 mt being available to the General category for the December subquota period. If necessary, NMFS will close the General category fishery for December when the available subquota for that time period is reached.

NMFS will continue to monitor the BFT fishery closely. Dealers are required to submit landing reports within 24 hours of a dealer receiving BFT. Late reporting by dealers compromises NMFS' ability to timely implement actions such as quota and retention limit adjustment, as well as closures, and may result in enforcement actions. Additionally, and separate from the dealer reporting requirement, General and HMS Charter/Headboat category vessel owners are required to report the catch of all BFT retained or discarded dead within 24 hours of the landing(s) or end of each trip, by accessing hmspermits.noaa.gov or by using the HMS Catch Reporting App. Depending on the level of fishing effort and catch rates of BFT, NMFS may determine that additional action (e.g., quota adjustment or closure) is necessary to ensure available subquotas are not exceeded or to enhance scientific data collection from, and fishing opportunities in, all geographic areas. If needed, subsequent adjustments will be published in the Federal Register. In addition, fishermen may call the Atlantic Tunas Information Line at (978) 281-9260, or access hmspermits.noaa.gov, for updates on quota monitoring and inseason adjustments.

NMFS reminds General category participants that when the fishery reopens December 1, 2017, the BFT General category daily retention limit will be one large medium or giant BFT (measuring 73” or greater) per vessel per day/trip.

The Assistant Administrator for NMFS (AA) finds that it is impracticable and contrary to the public interest to provide prior notice of, and an opportunity for public comment on, this action for the following reasons:

The regulations implementing the 2006 Consolidated HMS FMP and amendments provide for inseason retention limit adjustments to respond to the unpredictable nature of BFT availability on the fishing grounds, the migratory nature of this species, and the regional variations in the BFT fishery. Affording prior notice and opportunity for public comment to implement the quota transfer for the remainder of 2017 is impracticable and contrary to the public interest as such a delay would result in continued closure of the General category fishery (because the available quota has been met) and the need to re-open the fishery later in the December time period, rather than the fishery automatically re-opening on December 1. The delay would preclude the fishery from harvesting BFT that are available on the fishing grounds and that might otherwise become unavailable during a delay. Therefore, the AA finds good cause under 5 U.S.C. 553(b)(B) to waive prior notice and the opportunity for public comment. For these reasons, there also is good cause under 5 U.S.C. 553(d) to waive the 30-day delay in effectiveness.

This action is being taken under § 635.27(a)(9) (Inseason adjustments) and is exempt from review under Executive Order 12866.

Background

To help achieve the fishing mortality and conservation objectives of the Fishery Management Plan (FMP), each sector is allocated annual catch entitlements (ACE) and must ensure that these ACEs are not exceeded. The Regional Administrator must approve sector operations plans in order for sectors to operate and be allocated ACE for specific groundfish stocks. A sector's operations plan includes a detailed plan for monitoring and reporting catch and the specific management rules sector participants will abide by in order to avoid exceeding the sector's allocation, as well as a plan for how the sector will operate if an ACE is exceeded. The operations plan also includes internal sector enforcement measures for operation plan breaches and remedies, such as a penalty schedule for non-compliance with the operations plan or other actions that would jeopardize the sector's continued approval. Penalties under the plan range from a written warning or fine to expulsion from the sector.

The Regional Administrator may withdraw approval of a sector, after consultation with the New England Fishery Management Council, at any time as authorized in 50 CFR 648.87(c)(3). Withdrawal may occur if sector participants are not complying with the requirements of the approved operations plan or if the continuation of the operations plan will undermine achievement of fishing mortality objectives of the Northeast Multispecies FMP.

On March 30, 2017, Carlos Rafael pleaded guilty to all counts in United States v. Carlos Rafael (No. 16-CR10124-WGY). Mr. Rafael is the owner of Carlos Seafood (a Federally permitted dealer) and a fleet of Federally permitted groundfish vessels that are enrolled in NEFS 9. Mr. Rafael admitted to falsely reporting catch information (species and weight) for 13 of his vessels on dealer catch reports and vessel trip reports from 2012 through 2015. These 13 vessels operated under the sector operations plan for NEFS 9 during the period of known misreporting, and are currently enrolled in the sector for fishing year 2017. Sentencing for these violations occurred on September 25, 2017. Mr. Rafael was sentenced to serve 46 months in prison and 3 years of supervised release, and during supervised release, he is banned from working in the fishing industry. The Court also ordered Mr. Rafael to pay a fine of $200,000 and restitution to the U.S. Treasury of $108,929. On October 11, 2017, the U.S. District Court Judge in the criminal case ordered the forfeiture of Mr. Rafael's interests in 4 of the 13 vessels involved in the criminal case, as well as the permits issued to those vessels.

On April 28, 2017, we published an interim final rule approving 19 sectors and their operations plans, including NEFS 9, for fishing years 2017 and 2018 (82 FR 19618). At the time, although Mr. Rafael had pleaded guilty, the criminal case was not complete and sentencing for the violations had not occurred. We provisionally approved the NEFS 9 operations plan for fishing years 2017 and 2018, and allocated ACE to the sector for 2017, pending Mr. Rafael's sentencing to allow for our consideration of any additional information regarding NEFS 9 operations. In the interim final rule, we noted that we intended to take additional action, which may include consideration of the continued approval of the sector or additional management and monitoring requirements.

For fishing year 2017, there are 60 groundfish permits enrolled in NEFS 9, and Mr. Rafael is a major participant in the sector. All of Mr. Rafael's groundfish permits are enrolled in NEFS 9, and he does not have any other vessels enrolled in another sector. According to the current operations plan, 22 of the permits enrolled in NEFS 9 were expected to actively fish for groundfish. Of the remaining 38 permits in the sector, 18 are in Confirmation of Permit History (i.e. the permits are not on a vessel, but quota from these permits is available for use by sector vessels or to lease out to other sectors). The other permits in the sector are either active participants in other fisheries, or are completely inactive; all of these could begin to fish for groundfish, if granted permission by the sector, without a change to the operations plan.

Since fishing year 2011, NEFS 9 employed Mr. Rafael's daughter, Stephanie Rafael-DeMello as the Sector Manager. Prior to May 30, 2017, Mr. Rafael was the President of NEFS 9 and held a position on the Board of Directors. On May 30, 2017, the sector notified us that it had removed Mr. Rafael from the position of President, as well as from the Board of Directors. A new Board of Directors was identified, including the Board's elected officials, with only one individual in common with the Board from previous years.

Beyond the requirements described above to monitor and report catch, the NEFS 9 operations plan specifies that upon the Sector Manager becoming aware of an “apparent breach” in a member's compliance, the Manager will investigate. The Manager is also authorized to refer the matter to the sector's Enforcement Committee and take other actions as necessary, including potentially issuing a “Stop Fishing Order.” The Manager is required to submit a weekly Trip Issue Report to inform us of any enforcement, or reporting compliance issues in the sector.

Since Mr. Rafael's guilty plea in March 2017, we received a letter on May 30, 2017, from the newly elected president of NEFS 9 concerning matters related to Mr. Rafael's criminal acts. The letter outlined changes to the sector's Board of Directors, as described above, which is also included in the NEFS 9 operations plan. In the letter, the president stated that the Board notified all sector members that NEFS 9 vessels are prohibited from using Carlos Seafood, Inc. as the primary buyer and reporting dealer for any landings. The letter also indicated that the newly constituted Enforcement Committee intended to meet to further discuss Mr. Rafael's criminal violations.

On October 5, 2017, representatives of the sector requested a meeting with us to discuss the sector, and we met with the NEFS 9 Board of Directors, the Sector Manager, and representatives from the Northeast Seafood Coalition and the Northeast Sector Service Network (NESSN) on October 26, 2017. From that discussion, we learned that the Board of Directors, including those on the sector's newly formed Enforcement Committee, had met monthly since forming in May 2017. However, the Board of Directors indicated that no additional changes have been made to the operations of the sector beyond what was described in the May 30, 2017, letter. Similarly, the sector's annual Year-End Report for Fishing Year 2016, submitted on October 27, 2017, made reference to the steps laid out in the May 30 letter, but gave no indication that further steps had been taken. We have not received any other information from the sector.

While the steps taken that are identified in the May 30 letter are potentially positive measures, they are insufficient. The sector has not provided sufficient background information about the new Board members that would help us assess their independence or ability to govern the sector differently to ensure compliance. NEFS 9 has not provided us with any information, via the Trip Issue Report or other means, regarding any investigation by the sector to determine if any of its members or vessel operators breached the operations plan agreement. Nor has there been any indication that the Board, Enforcement Committee, or Manager have taken any sector operations plan measures to address any breach such as imposing or putting in place any liquidated damages, fine, stop fishing order, expulsion, or a requirement to post a security bond, which are potential actions included in NEFS 9's operations plan. There has been no indication of whether any measures have been put in place to ensure compliance by any vessel operators who may have assisted in the misreporting. Additionally, the sector has not provided to us any accounting of any of the potential ACE overages or misallocations. Although the new Board does provide a more independent group to which the Manager is required to report potential violations, it is not clear if the sector personnel changes fully address the Manager's responsibility for the sector's reporting requirements, ACE monitoring, and monitoring sector members' compliance with the operations plan. Last, there have been no substantial changes in the NEFS 9 operations plan for fishing years 2017 and 2018 to prevent further misreporting by any of its members or vessel operators; however, we recognize that the Board prohibited NEFS 9 vessels from using Carlos Seafood as the primary buyer and reporting dealer for any landings.

If a sector exceeds its ACE in any fishing year, the regulations require that the overage be deducted from the sector's ACE in the following fishing year. Based on publically available information from the criminal case, NEFS 9 likely exceeded its ACE for multiple groundfish stocks in multiple years potentially beginning in the 2012 fishing year. Because Mr. Rafael operated as both the dealer and vessel owner with no independent oversight, he was able to coordinate the misreporting, allowing these potential overages to go undetected until now. The repeated ACE overages we are now aware of indicate that the initial allocations made to the sector at the start of the 2017 fishing year and likely other fishing years were artificially high. As a result, the sector's catch to date may already exceed what would have been an accurate allocation for this fishing year.

Based on initial analysis of the misreported catch for American plaice and witch flounder, the magnitude of some of the ACE overages could be extensive. The misreported catch information for cod and yellowtail flounder is at a species level, and additional analysis is required to apportion this catch by stock area. We intend to complete this analysis as soon as possible to determine the full extent of any overages for cod and yellowtail flounder stocks. Any accountability measures, such as assessing and deducting ACE overages incurred by the sector, would be determined in a future action. Other than the public information we have access to from Mr. Rafael's plea agreement, NEFS 9 has not provided any information about the nature and scope of misreporting that would help us to accurately administer its ACEs.

The Council discussed Mr. Rafael's violations and the conditional approval of NEFS 9 at both its June and September 2017 meetings and was encouraged to comment on this issue. On September 29, 2017, we received a letter from the Council requesting that we immediately implement the sector regulations and the NEFS 9 operations plan.

Based on our review, NEFS 9 has failed to uphold sector operations plan requirements to a degree and extent that undermines foundational principles necessary for successful sector operations. Further, the sector's corrective measures to date are insufficient. We need more information and further measures are necessary to ensure that the sector operates in a manner that does not undermine the sector program.

Accurate reporting, internal accountability, and organizational integrity are core principles of the sector system. The systematic sector and vessel misreporting over a long period of time was facilitated by an internal structure and control by a single, dominant participant combined with a lack of oversight. The weakness and vulnerability of this sector's structure was underscored by NEFS 9's lack of an adequate response once the scope and nature of these violations were revealed. To date, there appears to be persistent non-compliance with fundamental operations plan requirements along with a significantly compromised structure and lack of NEFS 9 oversight. NEFS 9's failures to manage its operations effectively appear to have led to repeated ACE overages, some of which may be extensive. These overages may be continuing this fishing year, which threatens to continue undermining the sector system and its fishing mortality and conservation controls.

Without further information or revisions to its operations plan, we are not confident that the operations plan contains measures that would provide us with current accurate information or ensure compliance with the operations plan to prevent and address future misreporting or ACE overages. The sector has not provided us with information of any action it has taken to investigate its members' compliance with the sector operations plan or any measures to address breaches of its plan. The sector has not provided any information to help us corroborate the nature and scope of the false information provided to us and its effect on the sector's ACEs. The sector has not provided us with any information about the nature and scope of vessel operator cooperation with the non-compliance, or how the sector can be assured the operators are acting in compliance with the operations plan now. The sector has made no new proposals about any new compliance measures or provided any information about actions taken by their new Enforcement Committee.

NEFS 9 has failed its primary responsibility of accurately reporting and tracking its catch and has taken only minimal, insufficient steps to ensure accurate reporting and compliance with its operations plan. This includes addressing the fraudulent catch within the sector over multiple years and for multiple stocks to ensure the sector has proper ACE allocations, which may require deducting ACE overages the sector has incurred. As a result, continuation of the sector operations plan will undermine achievement of fishing mortality and management objectives of the Northeast Multispecies FMP. Therefore, we are withdrawing approval of the NEFS 9 sector operations plan until a complete and successful accounting of what happened is provided and steps are taken to ensure the sector will operate within its operations plan. We intend to work with NEFS 9 to address their operations plan issues, which we expect will take considerable time and will require additional correspondence and meetings after publication of this rule.

Effective November 20, 2017, approval of the NEFS 9 operation plan is withdrawn. The sector ACE remains allocated to NEFS 9, and this action does not reallocate the ACE to other sectors or to the common pool. Without an approved operations plan, NEFS 9 is prohibited from transferring ACE to or from other sectors. Vessels that were enrolled in NEFS 9 during this fishing year are prohibited from: (1) Fishing on a sector trip and harvesting sector ACE; (2) fishing on a common pool trip; or (3) joining another sector. If a vessel enrolled in NEFS 9 has declared a sector trip, and is at sea on November 20, 2017, it must return to port immediately; the vessel is permitted to offload its catch for sale. Also, we will work with individual vessels that had previously set gillnet gear, to haul the gear as soon as practicable. Vessels that are able to fish under other permits, without declaring a sector trip or using a multispecies day-at-sea, can continue to do so.

If NEFS 9 submits a new operations plan, we would attempt to conduct a review and complete a rulemaking as expeditiously as practicable. Before we could approve a new operations plan for NEFS 9, the sector must provide us with critical information about steps taken to comply with operations plan requirements and ensure steps are taken to address the organizational and operational issues that facilitated the false reporting. Vessels currently enrolled in NEFS 9 may opt to participate in the common pool or enroll in a different sector for the 2018 fishing year, as sector rosters are set annually.

We are accepting comments on this interim final rule. In response to the previous interim final rule approving 19 sectors (April 28, 2017; 82 FR 19618), we received eight comments relating to the provisional approval of NEFS 9 for the 2017 and 2018 fishing years. The comments came from Associated Fisheries of Maine (AFM), NEFS 9, NESSN, Portland Fish Exchange (PFEX), Sustainable Harvest Sector (SHS), two industry members, and one anonymous commenter.

Comment 1: NESSN commented that NMFS approval of NEFS 9 was appropriate at that time given the ongoing legal proceedings against a sector member and not the sector itself.

Other comments from AFM, PFEX, SHS, two industry members, and one anonymous commenter disagreed, stating that NEFS 9's operations plan should not have been approved for Fishing Years 2017 and 2018 given the admitted crimes of NEFS 9 sector member, Mr. Rafael. Several of these commenters elaborated on measures included in the sector operations plan that the sector may not have complied with or enforced after it learned of Mr. Rafael's actions, and that the sector should be held accountable to the actions outlined in their plan. Some also stated that NMFS' actions were inadequate in this case and that 100 percent monitoring for NEFS 9 may be appropriate.

Response: We agree that, at the time, provisional approval of the NEFS 9 operations plan was appropriate given that sentencing for the criminal violations was not complete and may have provided additional information. In the interim final rule, we noted that once sentencing is complete, we would consider all of the available information to determine whether any management action is necessary, including additional management measures or withdrawal of NEFS 9 approval.

Based on all of the available information, and now that sentencing is complete, we have determined that NEFS 9 failed and continues to fail to uphold the requirements of its operations plan. This non-compliance likely contributed to extensive overages of the sector's allocation for multiple groundfish stocks in multiple fishing years. The degree and extent of NEFS 9's failure to uphold its operations plan requirements undermines the foundational principles necessary for successful sector operations. As a result, we determined that NEFS 9 cannot continue to operate until and unless we receive sufficient information concerning the scope and nature of the operations plan breaches, actions taken by the sector in response to the breaches in accordance with operations plan requirements, and actions that will ensure the sector currently is operating in compliance with its operations plan and within its ACEs. This includes addressing the fraudulent catch within the sector over multiple years and for multiple stocks to ensure the sector has proper ACE allocations, which may require deducting ACE overages the sector has incurred. We intend to work with NEFS 9 to address its operations plan issues and will determine the measures necessary for ensuring that the sector's operations are appropriate and sufficient for accurately monitoring and reporting sector catch.

Accurate reporting, accountability, and organizational integrity are core principles of the sector system. In this case, NEFS 9 failed its primary responsibilities. Systematic misreporting over multiple fishing years, a failure to abide by, and enforce, sector operations plan requirements, and the internal structure of NEFS 9 were all contributing factors to the persistent non-compliance of NEFS 9 operations plan requirements and likely to extensive ACE overages. Because NEFS 9 has not sufficiently addressed all of these contributing factors, its continued approval under the current operations plan is likely not adequate to prevent and address continued, or future, misreporting, or non-compliance by any of its members, and would undermine the conservation and management objectives of the Northeast Multispecies FMP.

Comment 2: AFM, PFEX, and two members of the industry stated that Mr. Rafael should no longer be allowed to participate in the groundfish fishery and that all his permits should be relinquished.

Response: As discussed earlier in this rule, Mr. Rafael was sentenced to 46 months of prison, 3 years of supervised release, assessed a $200,000 fine, and required to pay $108,929 restitution. On October 11, 2017, the U.S. District Court also ordered the forfeiture of Mr. Rafael's interest in four of 13 vessels involved in the criminal case. There may be management implications from this forfeiture that may need to be included in the NEFS 9 operations plan. We intend to discuss potential implications, if any, with NEFS 9.

This is not an enforcement action, and does not impose civil penalties, permit sanctions, or forfeitures. Any civil penalties or permit sanctions may be imposed only after adequate notice and an opportunity for a hearing before an administrative law judge in accordance with NOAA's civil procedure regulations. This rule withdrawing approval of the NEFS 9 operations plan is administrative in nature, and addresses the sector requirements of the FMP and the sector's operations plan. If NEFS 9 continues to operate under its current operations plan with only the minimal changes it has proposed, it will undermine conservation and management objectives of the FMP.

This disapproval of the current NEFS 9 operations plan in this action relates only to the sector operations plan and the sector's ability to operate without undermining the sector system. Without an approved operations plan, all of the vessels currently enrolled in NEFS 9 will be unable to operate in the groundfish fishery for the remainder of the 2017 fishing year. Unless there is an additional enforcement action that affects the vessels' permits, the sector vessels may continue to operate in accordance with their non-groundfish permits. For the 2018 fishing year, these vessels could opt to fish in the common pool, or enroll in a sector with an approved operations plan. If NEFS 9 submits, and we approve, a new operations plan that addresses the serious management concerns discussed throughout this rule and that ensures the sector could operate without undermining the objectives of the Northeast Multispecies FMP, the vessels could re-enroll in NEFS 9.

Comment 3: NEFS 9 submitted a letter outlining the changes it made in response to the pending criminal case. NEFS 9 removed Mr. Rafael from its Board of Directors and elected a new Board, created a new Enforcement Committee, and decided not to allow sector members to sell catch to Carlos Seafood, Inc. as a primary buyer.

Response: We acknowledge these actions; however, they are insufficient by themselves. There are numerous issues that must be addressed as noted in this rule that we have begun to address with the sector. We expect to continue to discuss these issues with NEFS 9 during the approval process for any new operations plan.

The NMFS Assistant Administrator (AA) has determined that this interim final rule is consistent with the Northeast Multispecies FMP, other provisions of the Magnuson-Stevens Act, and other applicable law.

This interim final rule is exempt from review under Executive Order 12866 because this action contains no implementing regulations.

The interim final rule approving 19 sectors, including NEFS 9, provided an opportunity for the public to comment on the provisional approval of the NEFS 9 operations plan. The interim final rule specified that we would consider further action, including consideration of further management or monitoring requirements and continued approval of the sector. Pursuant to 5 U.S.C. 553(b)(B), the AA finds that prior notice and the opportunity for public comment would be contrary to the public interest. The purpose of this action is to withdraw approval for a previously approved and currently operating sector. We have determined that NEFS 9 and its members are not complying with the requirements of the operations plan, and that the operations plan is not sufficient to address the serious management issues described earlier in this preamble. The time it would take for prior notice and opportunity for public comment would allow the sector to continue to operate under a failed operations plan that is not consistent with the management and conservation objectives of the FMP. We need further information to determine the full nature and extent of any ACE overages and how they will affect NEFS 9 operations. The likely ACE overages that occurred, possibly beginning in the 2012 fishing year, suggest that the initial allocations made to NEFS 9 at the start of this fishery year may be artificially high. As a result, the sector's catch to date may already exceed what would have been an accurate allocation for this fishing year. Allowing the sector to proceed without an accurate accounting of known misreporting will undermine effective management of the sector program and could further undermine fishing mortality objectives of the FMP. Further, providing the participants in the sector with advanced notice of the disapproval by delaying the effective date would create an incentive for sector members to harvest or lease out as much of the sector's quota as possible, while operating under an operations plan that we have determined undermines the objectives of the Northeast Multispecies FMP.

Additionally, the AA finds there is good cause under 5 U.S.C. 553(d)(3), to waive the 30-day delay in effectiveness so that the purpose of this rule is not undermined. As stated above, the purpose of this action is prevent a sector from fishing under a sector operations plan that has been determined to undermine the objectives of the FMP, and that may be fishing under allocations that are artificially high considering the potential ACE overages that have occurred since 2012. A delay in the implementation of this rule would allow the sector to continue to operate under an operations plan that is determined to have not adequately ensured accurate reporting or compliance, and that the sector has failed to enforce. A delay in implementation would also increase the likelihood of additional ACE overages for NEFS 9 since its initial allocations for the 2017 fishing year does not include any adjustments for previous overages. As a result, continued operation of the sector further jeopardizes the objectives of the FMP and increases the likelihood that additional quota overages may occur.

This interim final rule does not contain policies with Federalism or “takings” implications as those terms are defined in E.O. 13132 and E.O. 12630, respectively.

This interim final rule is exempt from the procedures of the Regulatory Flexibility Act because the rule is issued without opportunity for prior notice and opportunity for public comment.