Federal Register Vol. 82, No.62,

FSA administers the FSFL Program on behalf of CCC. An instruction on page 25595 of the final rule that was published in the Federal Register on April 29, 2016 (81 FR 25587-255595) resulted in the word “loan” being removed each time it appeared in § 1436.15(b). However, the correct instruction would have removed the word loan in the two instances it appeared in the phrase “loan collateral” in paragraph (b). This document reinserts the word loan back into the first sentence the first time it had previously appeared.

For the reasons discussed above, 7 CFR part 1436 is corrected by making the following correcting amendment:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus Model A300 series airplanes; and Model A300 B4-600, B4-600R, and F4-600R series airplanes, and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes). The NPRM was prompted by reports of cracks in MLG leg components. The NPRM proposed to require repetitive detailed visual inspections of certain MLG leg components for cracks, and replacing the MLG leg if necessary. We are issuing this AD to detect and correct cracking of certain components in the MLG leg, which could result in a MLG collapse, and consequent damage to the airplane and injury to the airplane occupants.

The NPRM published in the Federal Register on August 5, 2016 (81 FR 51818) (“the NPRM”).

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2016-0058, dated March 21, 2016 (referred to after this as “the MCAI”), to correct an unsafe condition for all Airbus Model A300 series airplanes; and Model A300 B4-600, B4-600R, and F4-600R series airplanes, and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes). The MCAI states:

You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-8184.

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

FedEx asked whether the airframe manufacturer and/or MLG manufacturer have explored the possibility of inspecting the affected MLG and replacing a cracked MLG hinge arm/barrel pin without removing the MLG leg, as specified by Airbus Alert Operators Transmission (AOT) A32W008-16, dated February 25, 2016, including Appendices 1 through 4. FedEx stated that an on-wing inspection of the MLG leg would be effective in determining if further structural damage has occurred.

United Parcel Service (UPS) requested that we revise the NPRM to allow on-wing replacement of a cracked pin with part number C66441-(x) instead of replacing the MLG leg. UPS stated that it has reviewed the Airbus A300 Aircraft Maintenance Manual (AMM) and noted that the AMM indicates that the pin can be replaced while the gear is installed on the airplane.

We do not agree that an on-wing inspection of the MLG would be effective in finding further structural damage. When a hinge arm/barrel pin is cracked, damage to other MLG components cannot be excluded. This damage cannot be detected by on-wing inspections. Airbus currently does not have an approved method for on-wing inspections to detect all possible damage to the MLG components. For these reasons, Airbus AOT A32W008-16, dated February 25, 2016, including Appendices 1 through 4, specifies removing the MLG for further inspections for damage.

We also do not agree that an on-wing replacement of the pin in the MLG leg would be an adequate corrective action. As previously explained, when a hinge arm/barrel pin is cracked, other MLG component damage cannot be excluded. On-wing replacement of the pin would not correct any other MLG component damage that might be present.

Under the provisions of paragraph (j)(1) of this AD, we will consider requests for approval of an alternative on-wing inspection or replacement method if sufficient data are submitted to substantiate that the method would provide an acceptable level of safety. We have not changed this AD in this regard.

UPS and FedEx requested that the 100 flight cycle inspection interval be extended.

FedEx commented that, although it recognizes and appreciates the airplane manufacturer's safety concerns about discovering a cracked MLG hinge arm/barrel pin before complete failure, it would like to see the analysis that resulted in determination of an inspection interval of 100 flight cycles to prevent in-service pin failures. FedEx asserted that a 100 flight cycle interval may be unnecessarily conservative based on the pre-discovery history of cracked pins in the MLG leg of the airplane, which has had two cases of cracked MLG hinge arm/barrel pins.

UPS requested that the FAA either withdraw the NPRM or change the repetitive inspection interval from 100 flight cycles to 1,000 flight cycles. UPS stated that the detailed visual inspection at intervals of 100 flight cycles for the internal diameter of each affected MLG hinge arm/barrel pin specified by paragraph (g) of the proposed AD is too restrictive and not supported by data. UPS stated that it believes the cracking is associated with a specific operator's maintenance practices rather than a design of the landing gear or pin. UPS stated that the AMM and landing gear overhaul manual have defined inspection procedures that have been used to properly maintain the landing gear without any major findings for the past 30 years. UPS noted that its experience for the past 16 years has not shown any findings. UPS provides the following reasons for increasing the interval between inspections.

• The basis for issuance of the MCAI is findings of two cracked pins. The first finding was discovered during gear overhaul after the landing gear completed its gear overhaul life (8 years or 12,000 cycles). The second finding occurred after the unit accumulated more than 3,500 flight cycles since overhaul and was also subjected to a hard landing. Both pins had accumulated more than 25,000 flight cycles and went to repeat overhauls before failure. This indicates that the crack finding is associated with a specific operator maintenance practice rather than an inherent design problem of the landing gear or pin.

• Airbus Message 80187097/003, dated July 22, 2016, states that Airbus is working with EASA to reduce the burden to operators.

• UPS has operated 52 Model A300 airplanes since introduction of the model in the year 2000 with no findings. UPS's fleet leader airplane has accumulated more than 21,000 flight cycles with no similar finding. UPS has also reviewed all overhaul records since the introduction of Model A300 airplanes and did not find any cracked pins.

• UPS has accomplished the inspection specified in Airbus AOT A32W008-16, dated February 25, 2016, including Appendices 1 through 4, every 100 flight cycles since February 2016. The 260 inspections accomplished on 52 airplanes did not show any findings.

We do not agree to withdraw the NPRM or to increase the repetitive interval between detailed visual inspections on the MLG leg. While the MCAI cites two reports of cracked pins, Airbus has reports from the past six years of 45 pins with damage on the outer diameter. Based on the current reports and ongoing investigation, EASA is not able to support an increased inspection interval. Therefore, we have determined that the inspection interval recommended by the manufacturer and required by EASA is appropriate based on the available data. However, in the future, the data collected from the reporting requirement of paragraph (i) of this AD may provide the necessary information to justify an increase in the inspection interval. Additionally, if Airbus develops an alternative method of compliance that reduces the burden on operators, we will consider requests for its approval if sufficient data is submitted to substantiate that the method would provide an acceptable level of safety. We have not changed this AD in this regard.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD as proposed except for minor editorial changes. We have determined that these minor changes:

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

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

We reviewed Airbus AOT A32W008-16, dated February 25, 2016, including Appendices 1 through 4. This service information describes procedures for a detailed visual inspection of the internal diameter of each affected MLG hinge arm/barrel pin and replacement of the MLG leg with a serviceable unit. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

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

We estimate the following costs to comply with this AD:

Estimated Costs Action Labor cost Parts cost Cost per product Cost on U.S. operators Detailed visual inspection 1 work-hour × $85 per hour = $85 per inspection cycle 0 $85 per inspection cycle $10,880 per inspection cycle. Reporting 1 work-hour × $85 per hour 0 $85 $10,880.

We estimate the following costs to do any necessary replacement that would be required based on the results of the required inspection. We have no way of determining the number of aircraft that might need this replacement.

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW., Washington, DC 20591, ATTN: Information Collection Clearance Officer, AES-200.

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

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

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

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

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

From 11 a.m. to 3:30 p.m. on August 22-23, 2017, the Coast Guard will enforce the special local regulations at 33 CFR 100.501, table to § 100.501 (a.)8 for the regulated area located in the North Atlantic Ocean near Atlantic City, NJ. This action is necessary to ensure safety of life on U.S. navigable waterways during this air show.

Coast Guard regulations for recurring marine events within Captain of the Port Delaware Bay Zone, appear in § 100.501, Special Local Regulations; Marine Events in the Fifth Coast Guard District, which specifies the location of the regulated area for this regulated area as all waters of the North Atlantic Ocean, adjacent to Atlantic City, New Jersey, bounded by a line drawn between the following points: From a point along the shoreline at latitude 39°21′31″ N., longitude 074°25′04″ W., thence southeasterly to latitude 39°21′08″ N., longitude 074°24′48″ W., thence southwesterly to latitude 39°20′16″ N., longitude 074°27′17″ W., thence northwesterly to a point along the shoreline at latitude 39°20′44″ N., longitude 074°27′31″ W., thence northeasterly along the shoreline to latitude 39°21′31″ N., longitude 074°25′04″ W.

As specified in § 100.501, during the enforcement period, no vessel or person may enter, transit through, anchor in, or remain within the regulated area unless authorized by the Captain of the Port Delaware Bay or a designated representative. If permission is granted, all persons and vessels shall comply with the instructions of the COTP, designated representative or Patrol Commander.

This notice of enforcement is issued under authority of 33 CFR 100.501 and 33 U.S.C. 1233. The Coast Guard will provide the maritime community with advanced notice of enforcement of regulation by Broadcast Notice to Mariners (BNM), Local Notice to Mariners and on-scene notice by designated representative. In the event Captain of the Port Delaware Bay determines that it's not necessary to enforce the regulated area for the entire duration of the enforcement period, a BNM will be issued to authorize general permission to enter the regulated area.

The Seattle Department of Transportation requested a temporary deviation from the operating schedule for the Fremont Bridge, mile 2.6, and the University Bridge, mile 4.3, both crossing the Lake Washington Ship Canal at Seattle, WA, to facilitate safe passage of participants in the Brooks Trailhead 10K & 15K foot race event. The Fremont Bridge provides a vertical clearance of 14 feet (31 feet of vertical clearance for the center 36 horizontal feet) in the closed-to-navigation position. The University Bridge provides a vertical clearance of 30 feet in the closed-to-navigation position. Both bridge clearances are referenced to the mean water elevation of Lake Washington. The normal operating schedule for both the Fremont Bridge and the University Bridge is in 33 CFR 117.1051. During this deviation period, the Fremont Bridge need not open to marine vessels from 8:15 a.m. to 10:15 a.m. on April 22, 2017 and the University Bridge need not open to marine vessel from 8 a.m. to 8:30 a.m. on April 22, 2017. Waterway usage on the Lake Washington Ship Canal ranges from commercial tug and barge to small pleasure craft.

Vessels able to pass through the bridges in the closed-to-navigation positions may do so at anytime. Both bridges will be able to open for emergencies, and there is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterway through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessels can arrange their transits to minimize any impact caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), both drawbridges must return to their regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Virginia Department of Transportation, owner and operator of the SR 175 Bridge that carries SR 175 across the Chincoteague Channel, mile 3.5 (physically situated at mile 3.9), at Chincoteague Island, VA, has requested a temporary deviation from the current operating schedule to facilitate the biennial bridge inspection of the bascule span for the drawbridge. The bridge has a vertical clearance of 15 feet above mean high water (MHW) in the closed position and unlimited vertical clearance in the open position.

The current operating schedule is set out in 33 CFR 117.1005. Under this temporary deviation, the bridge will be maintained in the closed-to-navigation position from 11 a.m. through 2 p.m. on Thursday, April 6, 2017. The Chincoteague Channel is used by a variety of vessels including public vessels, small commercial vessels, tug and barge traffic, and recreational vessels. The Coast Guard has carefully coordinated the restrictions with waterway users in publishing this temporary deviation.

Vessels able to pass through the bridge in the closed-to-navigation position may do so at any time. The bridge will be able to open for emergencies, if at least 30 minutes notice is given, and there is no immediate alternative route for vessels unable to pass through the bridge in the closed position. The Coast Guard will also inform the users of the waterway through our Local Notice and Broadcast Notices 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 the temporary deviation.

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

The BNSF Railway requested a temporary deviation from the operating schedule of the Morgan City Railroad vertical lift drawbridge across Atchafalaya River (aka Berwick Bay), mile 17.5 [GIWW (Morgan City-Port Allen Alternate Route), mile 0.3] in Morgan City, St. Mary Parish, Louisiana. This deviation is necessary to lay new rails across the bridge from the east approach to the west approach.

For the purpose of this deviation, the bridge will be allowed to remain in the closed-to-navigation position from 1 p.m. to 8 p.m. on Wednesday, April 5, 2017 and from 6 a.m. to 1 p.m. on Thursday, April 6, 2017. At all other times the bridge will operate in accordance with 33 CFR 117.5.

The vertical clearance of the bridge is 4 feet above mean high water (MHW), elevation 8.2 feet above MHW in the closed-to-navigation position and 73 feet above MHW in open-to-navigation position. Navigation on the waterway consists of tugs with tows, oil industry related work and crew boats, commercial fishing vessels and some recreational crafts.

Vessels able to pass under the bridge in the closed position may do so at anytime. The bridge will be able to open for emergencies and the Morgan City-Port Allen Landside route through Amelia, LA can be used as an alternate route. The Coast Guard will inform the users of the waterways through our Local and Broadcast Notices 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 the temporary deviation.

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

I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking Pub. L. Public Law § Section U.S.C. United States Code COTP Captain of the Port II. Background Information and Regulatory History

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are impracticable, unnecessary, or contrary to the public interest. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because insufficient time remains to publish an NPRM and to receive public comments, as the Charleston Race Week event will occur before the rulemaking process would be completed. Because of the dangers posed by the proximity of the races to the navigable waters of the Charleston Harbor, the safety zone is necessary to provide for the safety of event participants, spectators, and vessels transiting the event area. For those reasons, it would be impracticable and contrary to the public interest to publish an NPRM.

For the reason discussed above, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register.

The legal basis for this rule is the Coast Guard's authority to establish regulated safety zones and other limited access areas is 33 U.S.C. 1231. The purpose of the rule is to ensure the safety of the event participants, the general public, vessels and the navigable waters during Charleston Race Week.

This rule establishes a safety zone on the waters of the Charleston Harbor in Charleston, South Carolina during Charleston Race Week. The races are scheduled to take place from 9 a.m. to 5 p.m. on April 20, 2017, through April 23, 2017. Approximately 250 sailboats are anticipated to participate in the races, and approximately 30 spectator vessels are expected to attend the event. Persons and vessels desiring to enter, transit through, anchor in, or remain within the safety zone may contact the Captain of the Port Charleston by telephone at (843) 740-7050, or a designated representative via VHF radio on channel 16, to request authorization. If authorization to enter, transit through, anchor in, or remain within the safety zone is granted by the Captain of the Port Charleston or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the Captain of the Port Charleston or a designated representative. The Coast Guard will provide notice of the safety zone by Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives.

We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the rule has not been reviewed by the Office of Management and Budget. This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders.

The economic impact of this rule is not significant for the following reasons: (1) Although persons and vessels may not enter, transit through, anchor in, or remain within the safety zone without authorization from the Captain of the Port Charleston or a designated representative, they may operate in the surrounding area during the enforcement period; and (2) the Coast Guard will provide advance notification of the safety zone to the local maritime community by Local Notice to Mariners and Broadcast Notice to Mariners.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on “small entities” comprised of small businesses and not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone that will prohibit persons and vessels from entering, transiting through, anchoring in, or remaining within a limited area on the waters of the Charleston Harbor. This rule is categorically excluded from further review under paragraph 34(g) of figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

Lava has been entering the ocean at Kamokuna on Kīlauea Volcano's south coast since July of 2016. As with all ocean entries during this long-lived Kīlauea eruption, hazards to people nearby on land and sea include: A plume of corrosive seawater laden with hydrochloric acid and fine volcanic particles that can irritate the skin, eyes, and lungs; explosions of debris and scalding water as hot rock interacts with the ocean; sudden collapse of lava deltas (new land formed as lava accumulates above sea level extending out from the base of the existing sea cliff); waves associated with explosions, collapses; plumes of hot water. For more information, please see: https://pubs.usgs.gov/fs/2000/fs152-00/.

On New Year's Eve 2016, a large portion of the new lava delta collapsed into the ocean producing waves and explosions of debris. Following this collapse, portions of the adjacent sea cliff continued to collapse into the ocean producing localized ocean waves and showers of debris. As of late March 2017, a new delta has begun to form at the Kamokuna ocean entry. Additionally, cracks parallel to the sea cliff in the surrounding area persist, indicating further collapses with very little or no warning are possible.

Based on a review of nearly 30 years of delta collapse and ejecta distance observations in the Hawaii Volcano Observatory records, a radius of 300 meters was determined as a reasonable minimum high hazard zone around a point of ocean entry.

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) [5 U.S.C. 553(b)]. This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency, for good cause, finds those procedures is “impractical, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for not publishing a NPRM and for making this rule effective less than 30 days after publication in the Federal Register. The Coast Guard finds it impractical to issue an NPRM with respect to this rule because of the emergency situation of potential hazards associated with molten lava entering the ocean resulting in explosions of large chunks of hot rock and debris upon impact, collapses of the sea cliff into the ocean, hot lava arching out and falling into the ocean, and the release of toxic gases that poses a danger to vessel traffic and the public. Publishing an NPRM and delaying the effective date would be contrary to the safety zone's intended objectives, including but not limited to protection of the public and mitigation of danger to nearby vessels from the hazards of flow entry into the ocean, enhancing public safety. Publishing a NPRM and delaying the effective date would also be contrary to the public interest since the occasion would occur before a notice-and-comment rulemaking could be completed, thereby jeopardizing the safety of the public. The COTP Honolulu finds this temporary safety zone must be effective immediately to ensure the safety of the public during Kilauea's active lava flow entry into the Pacific Ocean on the southeast side of the Island of Hawaii, HI.

The Coast Guard is publishing an NPRM elsewhere in this issue of the Federal Register that proposes to establish a permanent safety zone for the navigable waters surrounding the entry of lava from Kilauea volcano into the Pacific Ocean on the southeast side of the Island of Hawaii, HI.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The COTP Honolulu has determined that potential hazards associated with Kilauea's active lava flow entry into the Pacific Ocean on the southeast side of the Island of Hawaii, HI is safety concern for anyone within 300 meters (984 feet) in all directions around the entry of lava flow. The purpose of this rule is to ensure safety of public, vessels, and the navigable waters covered by the safety zone.

This temporary final rule establishes a safety zone from 8 a.m. (HST) on March 28, 2017, through 8 a.m. (HST) on September 28, 2017. The entry point of the lava does change based on flow, however the safety zone will encompass all waters extending 300 meters (984 feet) in all directions around the entry point of lava flow into the ocean associated with the lava flow at the Kamokuna lava delta. The safety zone is needed to protect persons and vessels from potential hazards associated with molten lava entering the ocean resulting in explosions of large chunks of hot rock and debris upon impact, hot lava arching out and falling into the ocean, and the release of toxic gases. No persons or vessels will be permitted to enter the safety zone without express authorization from the COTP Honolulu or his designated representative.

We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.

This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. Vessel traffic will be able to safely transit around this safety zone which will only impacts a small designated area on the southeast side of the Island of Hawaii, HI. Moreover, the Coast Guard will issue Broadcast Notice to Mariners via VHF-FM marine channel 16 about the safety zone and the rule allows vessels to seek permission to enter the safety zone.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities for reasons stated in section V. A. above.

Some owners or operators of vessels, which may be small entities, conduct tours in the vicinity of the safety zone where lava flow enters the ocean. Some of these owners or operators reportedly navigate closer than 300 meters from the lava entry into the ocean. This rule may affect their operations. The safety zone does not prohibit ocean tours; however the safety zone simply requires operators and vessel owners to navigate at a safe distance. It also allows vessels to seek permission of the COTP Honolulu to get closer.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a temporary safety zone lasting 6 months that will prohibit persons and vessels from entry into the 300 meters (984 feet) safety zone extending in all directions around the entry of lava flow into the Pacific Ocean. This safety zone is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

The Coast Guard will enforce the Lubbers Cup Regatta safety zone listed as item (b)(2) in Table 165.929 of 33 CFR 165.929. Section 165.929 lists many annual events requiring safety zones in the Captain of the Port Lake Michigan zone. This safety zone will encompass all waters of Spring Lake in Spring Lake, Michigan in the vicinity of Keenan Marina within a rectangle that is approximately 6,300 by 300 feet. The rectangle will be bounded by points beginning at 43°04.914′ N., 086°12.525′ W.; then east to 43°04.958′ N., 086°11.104′ W.; then south to 43°04.913′ N., 086°11.096′ W.; then west to 43°04.867′ N., 086°12.527′ W.; then north back to the point of origin. (NAD 83). As specified in 33 CFR 165.929, all vessels must obtain permission from the Captain of the Port Lake Michigan or a designated representative to enter, move within, or exit the safety zone when it is enforced. Vessels and persons granted permission to enter the safety zone must obey all lawful orders or directions of the Captain of the Port Lake Michigan or a designated representative.

This document is issued under authority of 33 CFR 165.929, Safety Zones; Annual events requiring safety zones in the Captain of the Port Lake Michigan zone, and 5 U.S.C. 552(a). In addition to this publication in the Federal Register, the Coast Guard plans to provide the maritime community with advance notification for the enforcement of this zone via Broadcast Notice to Mariners or Local Notice to Mariners. The Captain of the Port Lake Michigan or a representative may be contacted via Channel 16, VHF-FM.

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking with respect to this rule because doing so would be impracticable and contrary to the public interest. The event is scheduled to take place on April 9th and the safety zone must be in effect on that date in order to serve its purpose of ensuring the safety of the public from hazards associated with the fireworks display.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this temporary rule effective less than 30 days after publication in the Federal Register because doing so would be impracticable and contrary to the public interest. Delaying the effective date would be contrary to the rule's objectives of ensuring the safety of the public from hazards associated with the fireworks display.

The public fireworks display will be conducted by Fireworks by Grucci, Inc. and launched from five floating platforms located within the waters of Inner Harbor Baltimore, between Inner Harbor Pier 3 and Inner Harbor Pier 5 in Baltimore, MD. In the event of inclement weather, the fireworks display will be scheduled for April 9, 2017. Hazards from fireworks displays include accidental discharge of fireworks, dangerous projectiles, and falling hot embers or other debris. The Captain of the Port (COTP) has determined that potential hazards associated with the fireworks to be used in this display would be a safety concern for anyone within a 75-yard radius of each of each of the five fireworks discharge sites.

The fireworks display will be conducted at a time of year and time of day when boating traffic is expected to be minimal. The purpose of this rulemaking is to ensure the safety of persons and vessels on the navigable waters within the Inner Harbor before, during, and after the scheduled event. The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231.

The COTP is establishing a safety zone from 11 p.m. on April 8, 2017, until 1 a.m. on April 9, 2017, and if necessary due to inclement weather, from 11 p.m. on April 9, 2017, until 1 a.m. on April 10, 2017. The safety zone will cover all navigable waters of the Patapsco River, Inner Harbor, from shoreline to shoreline, within an area bounded on the east by longitude 076°36′12″ W., and bounded on the west by the Inner Harbor west bulkhead, located at Baltimore, MD. The duration of the zone is intended to ensure the safety of persons and vessels on the specified navigable waters before, during, and after the scheduled 11:59 p.m. fireworks display. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. The regulatory text appears at the end of this document.

We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders and we discuss First Amendment rights of protestors.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This temporary final rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.

This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. In some cases vessel traffic may be able to safely transit around this safety zone which would impact a small designated area of Inner Harbor Baltimore for 2 hours during the evening when vessel traffic is normally low. The Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM marine band channel 16 to provide information about the safety zone.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section IV.A above, this rule will not have a significant economic impact on any vessel owner or operator.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section. The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting 2 hours that would prohibit vessel movement within a portion of Baltimore's Inner Harbor. Normally such actions are categorically excluded from further review under paragraph 34(g) of figure 2-1 of Commandant Instruction M16475.lD. A preliminary environmental analysis checklist and Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places, or vessels.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

The Coast Guard will enforce the Safety Zone; Start of the Chicago to Mackinac Race listed as item (e)(45) in Table 165.929 of 33 CFR 165.929. Section 165.929 lists many annual events requiring safety zones in the Captain of the Port Lake Michigan zone. This safety zone encompasses all waters of Lake Michigan in the vicinity of the Navy Pier at Chicago IL, within a rectangle that is approximately 1500 by 900 yards. The rectangle is bounded by the coordinates beginning at 41°53.252′ N., 087°35.430′ W.; then south to 41°52.812′ N., 087°35.430′ W.; then east to 41°52.817′ N., 087°34.433′ W.; then north to 41°53.250′ N., 087°34.433′ W.; then west, back to point of origin. This safety zone will be enforced on July 15, 2017, from 10 a.m. until 4 p.m.

All vessels must obtain permission from the Captain of the Port Lake Michigan, or his or her designated on-scene representative to enter, move within, or exit this safety zone during the enforcement times listed in this notice of enforcement. Requests must be made in advance and approved by the Captain of the Port before transits will be authorized. Approvals will be granted on a case-by-case basis. Vessels and persons granted permission to enter the safety zone shall obey all lawful orders or directions of the Captain of the Port Lake Michigan, or his or her on-scene representative.

This notice of enforcement is issued under authority of 33 CFR 165.929, Safety Zones; Annual events requiring safety zones in the Captain of the Port Lake Michigan zone, and 5 U.S.C. 552(a). The Coast Guard will provide the maritime community with advance notification of this enforcement period via Broadcast Notice to Mariners and Local Notice to Mariners. The Captain of the Port Lake Michigan or a designated on-scene representative may be contacted via VHF Channel 16 during the event.

I. Background A. Legislative History

Title XIX of the Act authorizes the Secretary of the Department of Health and Human Services (the Secretary) to provide grants to states to help finance programs furnishing medical assistance (state Medicaid programs) to specified groups of eligible individuals in accordance with an approved state plan. “Medical Assistance” is defined at section 1905(a) of the Act as payment for part or all of the cost of a list of specified care for eligible individuals. Section 1902(a)(13)(A)(iv) of the Act requires that payment rates for hospitals take into account the situation of hospitals that serve a disproportionate share of low-income patients with special needs. Section 1923 of the Act contains more specific requirements related to payments for such disproportionate share hospitals (DSH) payments. These specific statutory requirements include aggregate state level limits, hospital-specific limits, qualification requirements, and auditing requirements.

Under section 1923(b) of the Act, a hospital meeting the minimum qualifying criteria in section 1923(d) of the Act is deemed as a disproportionate share hospital (DSH). States have the option to define DSHs under the state plan using alternative qualifying criteria as long as the qualifying methodology comports with the deeming requirements of section 1923(b) of the Act. Subject to certain federal payment limits, states are afforded flexibility in setting DSH state plan payment methodologies to the extent that these methodologies are consistent with section 1923(c) of the Act.

Section 1923(f) of the Act limits federal financial participation (FFP) for total statewide DSH payments made to eligible hospitals in each federal fiscal year (FY) to the amount specified in an annual DSH allotment for each state. These allotments essentially establish a finite pool of available federal DSH funds that states use to pay the federal portion of payments to all qualifying hospitals in each state. As states often use most or all of their federal DSH allotment, in practice, if one hospital gets more DSH funding, other DSH-eligible hospitals in the state may get less.

Section 13621 of the Omnibus Budget Reconciliation Act of 1993 (OBRA 93), which was signed into law on August 10, 1993, added section 1923(g) of the Act, limiting Medicaid DSH payments during a year to a qualifying hospital to the amount of uncompensated care costs for that same year. The Congress enacted the hospital-specific limit on DSH payments in response to reports that some hospitals received DSH payment adjustments that exceeded “the net costs, and in some instances the total costs, of operating the facilities.” (H.R. Rep. No. 103-111, at 211-12 (1993), reprinted in 1993 U.S.C.C.A.N. 278, 538-39.) Such excess payments were inconsistent with the purpose of the Medicaid DSH payment, which is to ameliorate the real economic burden faced by hospitals that treat a disproportionate share of low-income patients and to ensure continued access to care for Medicaid patients. Accordingly, Congress imposed a hospital-specific limit that restricts Medicaid DSH payments to qualifying hospitals to the costs incurred by the hospital of providing inpatient and outpatient hospital services during the year to Medicaid eligible patients and individuals who have no health insurance or other source of third party coverage for the services provided during the year, net of Medicaid payments (other than Medicaid DSH) and payments by uninsured patients. The statute states that the costs of providing services are “as determined by the Secretary,” and as further explained below, the Secretary has determined that “costs,” as it is used in the statute, are costs net of third-party payments received for those services, including, but not limited to, payments by Medicare and private insurance. As a result, the hospital-specific limit will reflect only the amount of uncompensated care costs for that same year.

Congress revisited the DSH payment requirements in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173, enacted on December 8, 2003). The MMA added section 1923(j) to the Act, which requires states to report specified information about their DSH payments, including independent, certified audits that, among other elements, are required to review compliance with the hospital-specific limits under section 1923(g)(1)(A) of the Act. Significantly, section 1923(j)(2)(C) of the Act provides a gloss on section 1923(g)(1)(A), by specifying that the audits must verify that only the uncompensated care costs of providing inpatient hospital and outpatient hospital services to individuals described in paragraph (1)(A) of such subsection [1923(g) of the Act] are included in the calculation of the hospital-specific limits under such subsection. Until the establishment of an audit requirement, there was no standardization among the states as to how the hospital-specific limit was calculated. In the late 1990's and early 2000's the Government Accountability Office (GAO) and the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued a series of reports focusing on the hospital-specific DSH limit. Among other findings, the GAO and OIG reports identified multiple instances where states included unallowable costs or did not account for costs net of applicable payments when determining the hospital-specific limits. These reviews and audits led to the enactment, as part of the MMA, of the audit requirements at section 1923(j) of the Act. Section 1923(j) of the Act not only required that we issue standardized audit methods and procedures, it also provided clarity on how the hospital-specific limit should be applied. Specifically, section 1923(j)(2)(C) of the Act provides that only the uncompensated care costs of providing inpatient hospital and outpatient hospital services to individuals (described in section 1923(g)(1)(A of the Act) are included in the calculation of the hospital-specific limits under section 1923(g)(1)(A) of the Act. This provision makes clear that Congress intended that the hospital-specific limit at section 1923(g)(1) of the Act only includes uncompensated care costs. And it also makes clear that FFP is not available for DSH payments that exceed a hospital's hospital-specific limit. In passing OBRA 93 and the hospital-specific DSH limit, Congress contemplated that hospitals with “large numbers of privately insured patients through which to offset their operating losses on the uninsured” may not warrant Medicaid DSH payments (H. Rep. 103-111, p. 211).

Section 1001 of the MMA required annual state reports and audits to ensure the appropriate use of Medicaid DSH payments and compliance with the DSH limit imposed at section 1923(g) of the Act.

In the August 26, 2005, Federal Register we published the “Medicaid Program; Disproportionate Share Hospital Payments” proposed rule (70 FR 50262) to implement the annual DSH audit and reporting requirements established or amended by the MMA. During the public comment period, one commenter requested clarification regarding the treatment of individuals dually eligible for Medicaid and Medicare for purposes of calculating the hospital-specific DSH limit. We responded to this comment in the “Medicaid Disproportionate Share Hospital Payments” final rule (73 FR 77904) (herein referred to as the 2008 DSH final rule) published in the December 19, 2008 Federal Register. As section 1923(g) of the Act limits DSH payments on a hospital-specific basis to “uncompensated costs,” the response to the comment clarified that all costs and payments associated with individuals dually eligible for Medicare and Medicaid, including Medicare payments received by the hospital on behalf of the patients, must be included in the calculation of the hospital-specific DSH limit. In other words, the extent to which a hospital receives Medicare payments for services rendered to Medicaid eligible patients must be accounted for in determining uncompensated care costs for those services.6

We also indicated in the 2008 DSH final rule that to be considered an inpatient or outpatient hospital service for purposes of Medicaid DSH, a service must meet the federal and state definitions of an inpatient hospital service or outpatient hospital service and must be included in the state's definition of an inpatient hospital service or outpatient hospital service under the approved state plan and paid under the state plan as an inpatient hospital or outpatient hospital service. While a state may have some flexibility to define the scope of inpatient or outpatient hospital services covered by the state plan, a state must use consistent definitions. Hospitals may engage in any number of activities, or may furnish practitioner, nursing facility, or other services to patients that are not within the scope of inpatient hospital services or outpatient hospital services and are not paid as such. These services are not considered inpatient or outpatient hospital services for purposes of calculating the Medicaid hospital-specific DSH limit.

Following the publication of the 2008 DSH final rule, we received numerous questions from interested parties regarding the treatment of costs and payments associated with dual eligible and Medicaid eligible individuals who also have a source of third party coverage (for example, coverage from a private insurance company) for purposes of calculating uncompensated care costs. We posted additional policy guidance titled “Additional Information on the DSH Reporting and Audit Requirements” on the Medicaid Web site at https://www.medicaid.gov/medicaid/financing-and-reimbursement/dsh/ making it clear that all costs and payments associated with dual eligible and individuals with a source of third party coverage must be included in calculating the hospital-specific DSH limit, as section 1923(g) of the Act limits DSH payments to “uncompensated costs.” This additional guidance was based upon the policy articulated in the 2008 DSH final rule and was consistent with subregulatory guidance issued to all state Medicaid directors on August 16, 2002.

In the August 16, 2002, letter to state Medicaid directors, we directed that when a state calculates the uninsured costs and the Medicaid shortfall for the OBRA 93 uncompensated care cost limits, it must reflect a hospital's costs of providing services to Medicaid patients and the uninsured, net of Medicaid payments (except DSH) made under the state plan and net of third party payments. Medicaid payments include, but are not limited to, regular Medicaid fee-for-service rate payments, any supplemental or enhanced payments, and Medicaid managed care organization payments. The guidance also stated that not recognizing these payments would overstate a hospital's amount of uninsured costs and Medicaid shortfall, thus inflating the OBRA 93 uncompensated care cost limits for that particular hospital. As state DSH payments are limited to an annual federal allotment, this policy is necessary to ensure that limited DSH resources are allocated to hospitals that have a net financial shortfall in serving Medicaid patients.

Prior to the 2008 DSH final rule, some states and hospitals were excluding both costs and payments associated with Medicaid eligible individuals with third party coverage, including Medicare, when calculating hospital-specific DSH limits (or were including costs while not including payments). Excluding both costs and payments associated with Medicaid eligible individuals is not consistent with the statutory requirement that we include the costs of all individuals “eligible for medical assistance,” which means those individuals eligible for Medicaid. Including costs (while not including payments) led to the artificial inflation of uncompensated care costs and, correspondingly, of hospital-specific DSH limits and permitted some hospitals to be paid based on the same costs by two payers—once by Medicare or other third party payer and once by Medicaid. The clarification included in the 2008 DSH final rule and subsequent subregulatory guidance promotes fiscal integrity and equitable distribution of DSH payments among hospitals by preventing payment to DSH hospitals based on costs that are covered by Medicare or a private insurer. It also promotes program integrity by ensuring that hospitals receive Medicaid DSH payments only up to the actual uncompensated care costs incurred in providing inpatient and outpatient hospital services to Medicaid eligible individuals or individuals with no health insurance or other source of third party coverage.

Given the timing of the final rule and audit requirements, we recognized that there could have been a retroactive impact on some states and hospitals if the requirements had been imposed immediately. To ensure that states and hospitals did not experience any immediate adverse fiscal impact due to the publication of the DSH audit and reporting final rule and to foster development and refinement of auditing techniques, we included a transition period in the final rule. During this transition period, states were not required to repay FFP associated with Medicaid DSH overpayments identified through the annual DSH audits. The final rule allowed for a 3-year period between the close of the state plan rate year and when the final audit was due to us, which meant that audits for state plan rate year 2008 were not due to us until December 31, 2011. Recognizing that states would be auditing state plan rate years that closed prior to publication of the final rule, we stated in the final rule that there would be no financial implications until the audits for state plan rate year 2011 were due to us on December 31, 2014. This allowed states and hospitals to adjust to the audit requirements and make adjustments as necessary. This resulted in a transition period for the audits associated with state plan rate years 2005 through 2010.

The 2008 DSH final rule also reiterated our policy that costs and payments are treated on an aggregate, hospital-specific basis. In that rule, we explicitly acknowledge that there will be instances where Medicaid payments will be greater than the costs of treating Medicaid eligible patients. But because those payments reduce the overall uncompensated costs of treating Medicaid eligible patients, we required that all Medicaid payments be included in the hospital-specific limit calculation, and explained that any “excess” payments will be applied against the uncompensated care costs that result from the uninsured calculation. This position is codified in § 455.304(d)(4). Specifically, for purposes of the hospital-specific limit calculation, any Medicaid payments, including but not limited to regular Medicaid fee-for-service rate payments, supplemental/enhanced Medicaid payments, and Medicaid managed care organization payments, made to a disproportionate share hospital for furnishing inpatient and outpatient hospital services to Medicaid eligible individuals, which are in excess of the Medicaid incurred costs for these services, are applied against the total uncompensated care costs of furnishing inpatient and outpatient hospital services to individuals with no source of third party coverage for such services.

The same principle applies to payments received from third party payers that exceed the cost of the service provided to a particular Medicaid eligible individual. All third party payments (including, but not limited to, payments by Medicare and private insurance) must be included in the calculation of uncompensated care costs for purposes of determining the hospital-specific DSH limit, regardless of what the Medicaid incurred cost is for treating the Medicaid eligible individual. For example, if a hospital treats two Medicaid eligible patients at a cost of $2,000 and receives a $500 payment from a third party for each individual and a $100 payment from Medicaid for each individual, the total uncompensated care cost to the hospital is $800, regardless of whether the payments received for one patient exceeded the cost of providing the service to that individual.

Subsequent to both the 2008 DSH final rule and the 2010 guidance, multiple states, hospitals, and other stakeholders expressed concern regarding this policy and requested clarification. In addition to requests for clarification, some states challenged this policy. We have disapproved one state plan amendment (SPA) proposing to exclude from the hospital-specific limit calculation the portion of a Medicare payment that exceeds the cost of providing a service to a dual eligible and one state plan amendment SPA proposing to exclude the portion of a third party commercial payment that exceeds the cost of providing a service to a Medicaid eligible individual with private insurance coverage. Additionally, some hospitals, and one state government agency, have sued regarding the treatment of third party payers in calculating uncompensated care costs.

In light of the statutory requirement limiting DSH payments on a hospital-specific basis to uncompensated care costs, it is inconsistent with the statute to assist hospitals with costs that have already been compensated by third party payments. This final rule is designed to reiterate the policy and make explicit within the terms of the regulation that all costs and payments associated with dual eligible and individuals with a source of third party coverage must be included in calculating the hospital-specific DSH limit. This policy is necessary to ensure that only actual uncompensated care costs are included in the Medicaid hospital-specific DSH limit. And, because state DSH payments are limited to an annual federal allotment, this policy is also necessary to ensure that limited DSH resources are allocated to hospitals that have a net financial shortfall in serving Medicaid patients.

In a simplified example, consider a state that has only two hospitals. The first hospital treated only patients who were either uninsured or eligible for Medicaid, and received no payments other than from Medicaid. The hospital-specific limit for this hospital would be equal to the hospital's total costs of treating its patients through inpatient hospital or outpatient hospital services minus the non-DSH Medicaid payments. The second hospital, on the other hand, treated only patients who were either uninsured or dually eligible for Medicaid and Medicare, and received no payments other than from Medicaid and Medicare. Under 1902(a)(13)(A)(iv) of the Act, the “situation” of the second hospital that receives comparatively generous payments from Medicare for the dual eligible is relevantly different than the “situation” of the first hospital that has not received such payments. Our policy—that Medicare and other third party payments must be taken into account when determining a hospital's costs for the purpose of calculating Medicaid DSH payments—ensures that the DSH payment reflects the real economic burden of hospitals that treat a disproportionate share of low-income patients (that is, the “situation” of the hospitals). Turning back to the example, the hospital-specific limit for the second hospital must take into account both the Medicaid and Medicare payments. If the hospital-specific limit did not take into account the Medicare payments, the second hospital would be able to receive DSH dollars in excess of its uncompensated care costs. As federal DSH funding is limited by the state-wide DSH allotment, the excess DSH payments to the second hospital may be at the expense of the first hospital, which could otherwise receive these DSH dollars.

We proposed to clarify the hospital-specific limitation on Medicaid DSH payments under section 1923(g)(1)(A) of the Act and annual DSH audit requirements under section 1923(j) of the Act. Specifically, this rule proposes to modify the terms of the current regulation to make it explicit that “costs” for purposes of calculating hospital-specific DSH limits are costs net of third-party payments received.

At § 447.299 we proposed to clarify the definition of “Total cost of care for Medicaid IP/OP services” to specify that the total annual costs of inpatient hospital and outpatient hospital (IP/OP) services must account for all third party payments, including, but not limited to payments by Medicare and private insurance.

We received 161 timely comments from state Medicaid agencies, provider associations, providers, and other interested parties, in response to the publication of the Disproportionate Share Hospital Payments—Treatment of Third Party Payers in Calculating Uncompensated Care Costs proposed rule. During our review of these comments, we identified 10 general comment areas, in which we received multiple comments, from multiple respondents. We also received 9 specific comments that did not fit into the general comment areas. Those comments and our responses are included below.

Comment: Many commenters suggested that CMS' interpretation of the hospital-specific limit is inconsistent with the statutory language under section 1923(g)(1)(A) of the Social Security Act, or that CMS' interpretation is not required under section 1923(j) of the Act.

Response: We disagree with these commenters. The statute limits Medicaid DSH payments to the amount of uncompensated care costs for that same year. Specifically, the statute limits the DSH payment to the costs incurred by the hospital of providing inpatient and outpatient hospital services during the year to Medicaid eligible patients and individuals who have no health insurance or other source of third party coverage for the services provided during the year, net of Medicaid payments (other than Medicaid DSH) and payments by uninsured patients. The statute states that the costs of providing services are “as determined by the Secretary”; such language gives us the discretion to take Medicare and other third party payments into account when determining a hospital's costs for the purpose of calculating Medicaid DSH payments. As a result, the hospital-specific limit calculation reflects only the costs for Medicaid eligible individuals for which the hospital has not received payment from any source.

Even though the 2008 regulation did not expressly mention Medicare and third party payments, this policy is necessary to facilitate the Congressional directive of section 1923 of the Act in general, and the hospital-specific limit in particular, of limiting the DSH payment to a hospital's uncompensated care costs. Moreover, we have been clear in our longstanding policy and in the 2008 rule that all third party payments must be taken into account when calculating the hospital-specific limit. This policy was also articulated in subsequent implementation guidance.

Comment: A number of commenters suggested that the policy reflected in the proposed rule should not apply to dual eligible patients for which there has not been a Medicaid claim generated or a Medicaid payment received on behalf of the dually eligible individual, noting that children who qualify for Medicaid often have Medicaid as their secondary coverage. According to the commenters, by including private insurance payments for services never billed to Medicaid, hospitals serving a high number of children with complex medical conditions may become ineligible for DSH funds, even though they have substantial losses for Medicaid-paid admissions and for the uninsured.

Response: The statutory language refers to those “eligible for medical assistance,” which means those individuals eligible for Medicaid benefits. The statutory language does not condition eligibility on whether the cost of the service was claimed, or if a Medicaid payment was received. Therefore, all costs and payments associated with Medicaid eligible individuals must be included in the hospital-specific limit calculation, regardless of whether Medicaid made a payment.

Moreover, the commenters' belief—that under our longstanding policy, a hospital may receive a DSH payment up to the hospital-specific limit and nevertheless incur “substantial losses” for treating Medicaid eligible and uninsured individuals—is incorrect. In the situation where a hospital receives a DSH payment up to the hospital-specific limit, a hospital will have received payments equal to the cost of providing inpatient and outpatient hospital services to Medicaid patients and the uninsured (from Medicaid, Medicaid DSH, and from other payers). Rather, it appears that the commenters are suggesting that the hospital-specific limit calculation should take into account the cost of services that are not paid for as inpatient or outpatient services or costs that are not paid for by Medicaid at all. Ancillary programs and services that hospitals provide to patients may be laudable, but they are not paid for by Medicaid because they are not costs associated with furnishing inpatient and outpatient hospital services to Medicaid eligible and uninsured individuals. To the extent a hospital has actual uncompensated care costs for furnishing such hospital services, the hospital will be eligible to receive a DSH payment in accordance with the statute and regulation. Under our interpretation of the statute, the hospital-specific limit ensures that a hospital's eligible uncompensated care costs may be compensated but that Medicaid DSH payments will not double pay for costs that have already been compensated. Accordingly, we believe our approach best fulfills the purpose of the DSH statute.

Comment: A few of the commenters suggested that CMS needs to reconsider how they determine a patient is uninsured, suggesting, for example, that the one-time determination of an individual's status as having third-party coverage should be reconsidered. The commenters also suggested that CMS should allow an inpatient hospital service to be reevaluated at the point that a benefit limit or dollar limit is reached, or benefits are otherwise exhausted, in which case the individual may be treated as uninsured for that portion of the stay.

Response: We thank the commenters for this comment, but it is outside the scope of this rule. This rule does not address how a patient is determined to be “uninsured”. Rather, the rule is clarifying existing policy on the calculation of Medicaid uncompensated care costs for the purposes of making Medicaid DSH payments.

Comment: Multiple commenters suggested that, if the proposed rule is finalized, CMS should only impose this policy prospectively and should provide an adequate transition period to allow states to change their payment methodologies.

Response: This rule is providing clarification to existing policy, therefore there is no issue of retroactivity, nor a need for a transition period. Under the 2008 regulation, states were provided a 5-year transition period, from 2005 through 2010. Given previous rulemaking and implementing guidance, we do not believe it is necessary to afford an additional transition period.

Comment: Many commenters suggested that the regulation will impose a great burden on all involved, which outweighs any incremental benefit in transparency and accountability, and diverts scarce financial and human resources away from providing and paying for care to beneficiaries.

Response: We disagree with the commenters and believe that taking into account all third party payments associated with a Medicaid eligible individual better facilitates the Congressional directive of section 1923 of the Act in general, and the hospital-specific limit in particular. Medicaid DSH payments are limited to an annual federal allotment. As states often use most or all of their federal DSH allotment, in practice, if one hospital gets more DSH funding, other DSH-eligible hospitals in the state may get less. This policy ensures that limited DSH resources are allocated to hospitals that have a net financial shortfall in serving Medicaid patients. This rule does not reflect a change in policy and the language of this final rule accurately reflects existing policy.

Comment: Multiple commenters suggested that in light of the pending litigation, CMS should withdraw the proposed rule, refrain from enforcing its subregulatory guidance, and await the outcome of that litigation.

Response: This final rule is a clarification of the existing policy and as such it is not necessary to wait for the outcome of the pending litigation. We believe that our interpretation—that all third party payments should be taken into account—better facilitates the Congressional directive of section 1923 of the Act in general, and the hospital-specific limit in particular, by limiting the DSH payment to a hospital's uncompensated care costs.

Comment: A number of commenters stated that the proposed rule would ensure consistency in how Medicaid shortfall is calculated and provide a more complete measure of the financial impact of these patients on hospital finances. These commenters suggested including certain costs of physicians and clinic services provided by hospitals in the calculation of “uncompensated care costs.” The commenters also suggested including provider contributions toward the non-federal share of DSH payments through health care related taxes and other mechanisms, which affect their net Medicaid payments.

Response: We agree with the commenters that the rule as proposed would ensure consistency in how Medicaid uncompensated care costs are calculated and provide a more complete measure of the financial impact of Medicaid eligible patients on DSH hospitals. The proposed rule did not address whether certain costs of physicians and clinic services provided by hospitals and provider contributions toward the non-federal share of DSH payments should be included for purposes of calculating the hospital-specific limit. Therefore, this rule only addresses the scope of inpatient and outpatient hospital costs that can be included for Medicaid DSH purposes.

Comment: Many commenters suggested that CMS withdraw the proposed rule because it is not a clarification of existing policy, but rather a substantive rule that is changing the current policy.

Response: We disagree. This rule does not reflect a change and the language of this final rule accurately reflects existing policy. This policy has also been articulated in the 2008 DSH final rule, as well as implementing guidance.

Comment: A few commenters suggested that the proposed rule would redistribute billions of dollars, therefore the rule will be considered as having an economically significant impact on hospitals. The commenters requested that CMS make all records available, including data and reports, used in drafting the proposed rule and publish a regulatory impact analysis for the rule.

Response: Not recognizing third party payments associated with Medicaid eligible individuals would overstate a hospital's uncompensated care costs, thus inappropriately inflating the hospital-specific limit. Providing clarification to the existing policy ensures that the limited Medicaid DSH resources are allocated to hospitals that have a net financial shortfall in serving Medicaid patients. The regulatory impact of this final rule is specifically addressed in the regulatory impact section.

Comment: Multiple commenters suggested that the proposed rule is most harmful to children's hospitals and safety net hospitals, such as Medicare-dependent hospitals, rural facilities, critical access hospitals, sole community hospitals, and Indian Health Service (IHS) areas, which are the very hospitals that the Medicaid DSH program was developed to help.

Response: The policy reflected in the proposed rule does not disproportionately harm children's hospitals and safety net hospitals. We believe this rule ensures the appropriate allocation of Medicaid DSH dollars to those hospitals that have a true financial shortfall related to serving Medicaid eligible individuals. The intent of this rule is to provide clarification to the statutory requirements and ensure Medicaid DSH dollars are available to offset costs that are truly uncompensated.

Comment: A few commenters suggested that CMS should withdraw the proposed rule because, if finalized, this rule cannot be enforced, applied or implemented uniformly across all states.

Response: This rule ensures that existing interpretive policy is explicitly reflected in our regulatory text. This policy is currently being enforced, applied and implemented uniformly across all states, except in limited instances where we have suspended enforcement of the existing policy in light of court orders. We appreciate the commenters' concern but are finalizing the rule as proposed.

In addition to the comments we discussed above, we received 9 comments that did not fit into the 10 general comment areas. Those additional 9 comments, along with our responses, are included below.

Comment: One commenter suggested that comments received through the rulemaking process cannot be considered meaningful consultation within the scope of Executive Order 13175 and CMS' own tribal consultation policy, which states that tribal consultation must take place prior to the rulemaking process.

Response: Executive Order 13175 and our own tribal consultation policy state that to the extent practicable and permitted by law, no agency shall issue any regulation that will significantly affect Indian Tribes, without prior consultation with tribal officials. The rule as proposed would not have a significant impact on Indian Tribes because the language of this rule accurately reflects existing policy that is currently being enforced, applied and implemented uniformly across all states, except in limited instances where we have suspended enforcement of the existing policy in light of court orders. Further, this policy has been previously articulated in the 2008 DSH final rule. During the development of the 2008 DSH final rule, the agency held the required tribal consultation.

Comment: One commenter wanted to reiterate concerns raised in comments submitted on CMS-1655-P, Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and Long-Term Care Hospital Payment System and Proposed Policy Changes and Fiscal Year 2017 rates, et al. The Medicare DSH payment is a percentage add-on to the standard diagnosis-related group (DRG) payment (excluding new technology add-on payments and outlier payments). Effective October 1, 2013 the methodology for calculating Medicare DSH payments was revised so that eligible hospitals are paid 25 percent of the DSH payment under the previous methodology, and the remaining 75 percent is an uncompensated care payment allocated from a prospectively determined estimate of dollars. Medicare allocates these dollars based on the ratio of a hospital's uncompensated care costs to the uncompensated care costs of all hospitals eligible for Medicare DSH. We proposed to define uncompensated care costs as the costs of charity care and non-Medicare bad debt and to incorporate Worksheet S-10 data over a 3-year period beginning in FY 2018, where insured low income day data (which we have been using as a proxy for uncompensated care costs) will be averaged with uncompensated care cost data.

Response: This rule does not impact the formula for calculating Medicare DSH payments. Medicaid and Medicare DSH operate under two different statutory authorities and this final rule only addresses the Medicaid DSH calculation. As such, Medicaid uncompensated care costs include only those costs for Medicaid eligible individuals that remain after accounting for all payments received by hospitals by or on behalf of Medicaid eligible individuals, including Medicare and other third party payments that compensate the hospitals for care furnished to such individuals.

Comment: One commenter stated that adherence to Medicare reasonable costs principles and methods in the DSH program is clearly emphasized throughout the law, the rules and other CMS guidance, and that FAQ 33 violates these principles, many of which are foundational to the earliest days of the Medicare and Medicaid program. According to the commenter, CMS stated in FAQ 21 that the same methods used in preparing the Medicare 2552-96 cost report should be applied in determining costs to be used in calculating the hospital-specific DSH limits, and that Medicare reasonable cost principles do not allow for other patients to bear the cost of care provided to program beneficiaries.

Response: In the Additional Information on the DSH Reporting and Audit Requirements, Part I, FAQ 33, we clarified that “days, costs, and revenues associated with patients that are eligible for Medicaid and also have private insurance should be included in the calculation of the hospital-specific DSH limit. As Medicaid should be the payer of last resort, hospitals should also offset both Medicaid and third-party revenue associated with the Medicaid eligible day against the costs for that day to determine any uncompensated amount.” We disagree that this violates Medicare cost principles or general methods in the CMS-2552 cost report. Since the costs of these services are included in the hospital-specific DSH limit calculation, revenue associated with those same services must be applied as offsets to arrive at net costs to the hospital for the services. In the CMS-2552 settlement worksheets, payments received for program services, including payment from non-program sources, are offset against costs of program services (or program payment amount) to arrive at net program payment. Furthermore, we disagree that this application results in other patients bearing the cost of care provided to program beneficiaries. The clarification in the cited FAQ and in this rule continues to allow the hospital-specific DSH limit to recognize a hospital's uncompensated care costs for Medicaid services (including those Medicaid services for which there is Medicare or third party payment) and uninsured services.

Comment: One commenter suggested that CMS and states should leverage the same coordination of benefits processes employed by state Medicaid programs, which would capture resource and cost efficiencies as well as economies of scale. According to the commenter, CMS and states must mandate that providers of DSH services submit individual claims transactions through MMIS so that Medicaid will be able to look for instances where the uninsured individual has access to other health insurance that can be billed as primary. The commenter suggested that these recommendations are in line with GAO and MACPAC recommendations.

Response: While we understand the importance of ensuring accurate accounting of payments, this rule is not related to coordination of benefits or claims transactions. We always encourage state efforts to assist uninsured individuals in exploring avenues to obtain health care coverage. Also, Medicaid DSH is not an individual service payment, rather it is a payment in recognition of costs that certain hospitals incur for serving Medicaid and uninsured individuals.

Comment: One commenter referenced a State Medicaid Plan, approved by CMS from 2004 to 2013, which set forth the hospital-specific Medicaid DSH limit calculation in detail and made no mention of private health insurance or Medicare payments made on behalf of Medicaid eligible patients as separate offsets.

Response: The approved state plan in question did not go into sufficient detail to address the policy at issue here. The state plan language provided assurances that the state was abiding by statutory requirements, but did not delve into the details of the hospital-specific limit. We anticipate that the state in question will comply with applicable statutory and regulatory requirements in implementing its state plan, and that the independent DSH audit will determine if it did so.

Comment: One commenter requested clarification that the proposed rule in no way affects the qualifying criteria for a hospital being deemed DSH, and that it only applies to limit the financial benefit associated with such determination.

Response: This final rule does not address deeming qualifications for hospitals for Medicaid DSH purposes. Determining how a hospital qualifies as a DSH is not within the scope of this rule.

Comment: One commenter asked that we address whether the source of private insurance must come from private health insurance owned by the Medicaid beneficiary or whether it can come from a policy otherwise identifying the Medicaid beneficiary and paying the hospital for hospital services furnished to the beneficiary.

Response: This rule clarifies existing policy that uncompensated care costs include only those costs for Medicaid eligible individuals that remain after accounting for payments received by hospitals by or on behalf of Medicaid eligible individuals, including Medicare and other third party payments that compensate the hospitals for care furnished to such individuals. Therefore, those payments received by or on behalf of Medicaid eligible individuals from private health insurance, regardless of whether the policy is owned by or otherwise covers some or all of the costs of hospital services furnished to the Medicaid beneficiary, must be accounted for.

Comment: One commenter encouraged CMS to permit a hospital to carry net uncompensated care cost forward for one year, in the event that the following year a DSH qualified hospital realized an extraordinary third party liability (TPL) recovery year, resulting in the hospital exceeding its hospital-specific limit.

Response: This rule does not address how uncompensated care costs are attributed for accounting purposes. The final rule from 2008 lays out the detailed requirements for how costs should be audited and reported, and those requirements do not permit a hospital to carry net uncompensated care cost forward for one year, in the event that the following year a DSH qualified hospital realized an extraordinary TPL recovery year.

Comment: One commenter suggested CMS consider the Medicaid provider tax with this rule, stating that the Medicaid provider tax on the state's hospitals is currently only using 28 percent of the tax money to benefit the hospitals by funding the Medicaid DSH allotment. According to the commenter, this rule could have many of these hospitals paying this provider tax without receiving anything back in the form of DSH payments to help offset the cost.

Response: This rule does not address how states utilize revenues generated by health-care related taxes. While we realize that many states impose health care-related taxes to generate non-federal share for Medicaid payments, there is no requirement that the revenues be used to fund payments back to the same provider class. States have flexibility in how they utilize the revenues so long as there are no hold harmless violations.

We are finalizing the provisions as proposed.

This rule does not impose any new or revised information collection requirements or burden. It does not impact currently approved reporting, auditing, or state plan requirements or associated burden estimates. Consequently, this rule is not subject to the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

This final rule will ensure that only the uncompensated care costs for covered services provided to Medicaid eligible individuals are included in the calculation of the hospital-specific DSH limit, as required by section 1923(g) of the Act.

We have examined the impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (Pub. L. 96-354 enacted on September 19, 1980) (RFA), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4 enacted on March 22, 1995) (UMRA), Executive Order 13132 on Federalism (August 4, 1999) and the Congressional Review Act (5 U.S.C. 804(2)).

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action that is likely to result in a rule: (1) Having an annual effect on the economy of $100 million or more in any 1 year, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local or tribal governments or communities (also referred to as “economically significant”); (2) creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). This rule does not reach the economic threshold and thus is not considered a “significant regulatory action” under E.O. 12866, nor a “major rule” under the Congressional Review Act.

The RFA requires agencies to analyze options for regulatory relief for small entities, and to prepare a final regulatory flexibility analysis if a rule is found to have a significant impact on a substantial number of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small government jurisdictions. The great majority of hospitals and most other health care providers and suppliers are small entities, either by being nonprofit organizations or by meeting the SBA definition of a small business (having revenues of less than $7.5 million to $38.5 million in any 1 year).

We are not preparing a final regulatory flexibility analysis because we have determined, and the Secretary certifies, that this final rule will not have a significant economic impact on a substantial number of small entities.

In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area for Medicare payment regulations and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because we have determined, and the Secretary certifies, that this final rule will not have a significant impact on the operations of a substantial number of small rural hospitals.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. Currently, that threshold is approximately $146 million. Since this rule would not mandate spending costs on state, local, or tribal governments in the aggregate, or by the private sector over the threshold of $146 million or more in any 1 year, the requirements of the UMRA are not applicable.

Executive Order 13132 establishes certain requirements that an agency must meet when it issues a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has federalism implications. Since this regulation does not impose any costs on state or local governments, the requirements of Executive Order 13132 are not applicable.

Because this is not a change in policy, we do not anticipate that this final rule will have significant financial effects on state Medicaid programs. This rule will only make explicit within the terms of the regulation that “costs” for purposes of section 1923(g) of the Act are costs net of third-party payments.

Because this is not a change in policy, we do not anticipate that this final rule will have significant financial effects on other providers. This rule would only make explicit within the regulation that “costs” for purposes of section 1923(g) of the Act are costs net of amounts that have been paid by third parties and will ensure a more equitable distribution of Medicaid DSH payments within each state.

We considered not proposing this rule. However, numerous states and other stakeholders have requested clarification regarding this requirement. Accordingly, we are proposing to make explicit within the terms of our regulation our existing policy that implements sections (g) and (j) of the Act, in part.

Additionally, we considered issuing additional policy guidance through subregulatory means, such as a letter to all state Medicaid directors. However, we anticipate that modifying the regulatory text of 42 CFR part 447 is as clear and comprehensive as possible on this issue, avoiding any need for future clarification.

In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget.

For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services amends 42 CFR chapter IV as set forth below:

The NFIP enables property owners to purchase Federal flood insurance that is not otherwise generally available from private insurers. In return, communities agree to adopt and administer local floodplain management measures aimed at protecting lives and new construction from future flooding. Section 1315 of the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4022, prohibits the sale of NFIP flood insurance unless an appropriate public body adopts adequate floodplain management measures with effective enforcement measures. The communities listed in this document no longer meet that statutory requirement for compliance with program regulations, 44 CFR part 59. Accordingly, the communities will be suspended on the effective date in the third column. As of that date, flood insurance will no longer be available in the community. We recognize that some of these communities may adopt and submit the required documentation of legally enforceable floodplain management measures after this rule is published but prior to the actual suspension date. These communities will not be suspended and will continue to be eligible for the sale of NFIP flood insurance. A notice withdrawing the suspension of such communities will be published in the Federal Register.

In addition, FEMA publishes a Flood Insurance Rate Map (FIRM) that identifies the Special Flood Hazard Areas (SFHAs) in these communities. The date of the FIRM, if one has been published, is indicated in the fourth column of the table. No direct Federal financial assistance (except assistance pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act not in connection with a flood) may be provided for construction or acquisition of buildings in identified SFHAs for communities not participating in the NFIP and identified for more than a year on FEMA's initial FIRM for the community as having flood-prone areas (section 202(a) of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4106(a), as amended). This prohibition against certain types of Federal assistance becomes effective for the communities listed on the date shown in the last column. The Administrator finds that notice and public comment procedures under 5 U.S.C. 553(b), are impracticable and unnecessary because communities listed in this final rule have been adequately notified.

Each community receives 6-month, 90-day, and 30-day notification letters addressed to the Chief Executive Officer stating that the community will be suspended unless the required floodplain management measures are met prior to the effective suspension date. Since these notifications were made, this final rule may take effect within less than 30 days.

National Environmental Policy Act. FEMA has determined that the community suspension(s) included in this rule is a non-discretionary action and therefore the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) does not apply.

Regulatory Flexibility Act. The Administrator has determined that this rule is exempt from the requirements of the Regulatory Flexibility Act because the National Flood Insurance Act of 1968, as amended, Section 1315, 42 U.S.C. 4022, prohibits flood insurance coverage unless an appropriate public body adopts adequate floodplain management measures with effective enforcement measures. The communities listed no longer comply with the statutory requirements, and after the effective date, flood insurance will no longer be available in the communities unless remedial action takes place.

Regulatory Classification. This final rule is not a significant regulatory action under the criteria of section 3(f) of Executive Order 12866 of September 30, 1993, Regulatory Planning and Review, 58 FR 51735.

Executive Order 13132, Federalism. This rule involves no policies that have federalism implications under Executive Order 13132.

Executive Order 12988, Civil Justice Reform. This rule meets the applicable standards of Executive Order 12988.

Paperwork Reduction Act. This rule does not involve any collection of information for purposes of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

Accordingly, 44 CFR part 64 is amended as follows:

Public Comments

The Commission is publishing this interim final rule, effective April 3, 2017, in light of the statutory requirements of the Act. The Commission is providing a 60-day period for public comment.

Please note that all comments received are considered part of the public record and made available for public inspection online at http://www.regulations.gov. Information made available for public inspection includes personal identifying information (such as your name, address, etc.) voluntarily submitted by the commenter.

If you wish to submit personal identifying information (such as your name, address, etc.) as part of your comment, but do not wish it to be posted online, you must include the phrase “PERSONAL IDENTIFYING INFORMATION” in the first paragraph of your comment. You must also locate all the personal identifying information that you do not want posted online in the first paragraph of your comment and identify what information you want the agency to redact. Personal identifying information identified and located as set forth above will be placed in the agency's public docket file, but not posted online.

If you wish to submit confidential business information as part of your comment but do not wish it to be posted online, you must include the phrase “CONFIDENTIAL BUSINESS INFORMATION” in the first paragraph of your comment. You must also prominently identify confidential business information to be redacted within the comment. If a comment has so much confidential business information that it cannot be effectively redacted, the agency may choose not to post that comment (or to only partially post that comment) on http://www.regulations.gov. Confidential business information identified and located as set forth above will not be placed in the public docket file, nor will it be posted online. If you wish to inspect the agency's public docket file in person by appointment, please see the FOR FURTHER INFORMATION CONTACT paragraph.

Pursuant to the Guam War Claims Review Commission Act, Public Law 107-333, 116 Stat. 2873 (2002), the Guam War Claims Review Commission (“GWCRC”) was established to evaluate the war claims compensation program conducted by the U.S. Navy on Guam during and after World War II, and to compare it with other compensation programs covering claims of U.S. nationals arising in other areas in the Pacific attacked by Japanese forces during the war. The GWCRC was required to submit a report of its findings and recommendations to the Secretary of the Interior and specified Congressional committees within nine months of its establishment. Public Law 107-333, section 5(6).

In September 2003, the Secretary of the Interior requested the Foreign Claims Settlement Commission of the United States (Commission) to provide part-time technical assistance to GWCRC. Between 2003 and 2004, members of the Commission's staff were detailed to the GWCRC, where they planned and organized GWCRC meetings and conducted research on the Guam claims program and the other compensation programs with which it was to be compared. The GWCRC held hearings on Guam in December 2003, at which it received testimony by numerous residents of Guam who had survived the 32-month Japanese occupation of the island. The hearings on Guam were followed by a legal experts' conference convened in Washington, DC, in February 2004 to discuss the nature and extent of the United States Government's legal responsibility for the various types of claims that arose out of World War II, and the treatment the Government accorded the claims of the people of Guam as compared with that given to the claims of United States nationals elsewhere in the Pacific Ocean area.

The GWCRC's Final Report, issued on June 9, 2004, determined that, in some respects, there was a lack of parity of war claims paid to the residents of Guam compared with awards made to other similarly affected U.S. citizens or nationals in territory occupied by the Imperial Japanese military forces during World War II. Based on this determination, the GWCRC recommended that Congress enact legislation providing for additional compensation to compensate the people of Guam for death, personal injury, forced labor, forced march, and internment. As required by statute, the GWCRC terminated 30 days after submission of its report. Public Law 107-333, section 7.

Following from the findings and recommendations of the GWCRC, on December 23, 2016, the President signed into law the Guam World War II Loyalty Recognition Act, Title XVII, Public Law 114-328, 130 Stat. 2000, 2641-2647 (2016) (the “Guam Loyalty Recognition Act” or “Act”). The Act provides, inter alia, that “[t]he United States recognizes that, as described by the Guam War Claims Review Commission, the residents of Guam, on account of their United States nationality, suffered unspeakable harm as a result of the occupation of Guam by Imperial Japanese military forces during World War II, by being subjected to death, rape, severe personal injury, personal injury, forced labor, forced march, or internment.” The Act further recognizes that “[t]he United States forever will be grateful to the residents of Guam for their steadfast loyalty to the United States, as demonstrated by the countless acts of courage they performed despite the threat of death or great bodily harm they faced at the hands of the Imperial Japanese military forces that occupied Guam during World War II.” Public Law 114-328, section 1702. Pursuant to section 1705(a) of the Act, the Commission is authorized to adjudicate claims and determine the eligibility of individuals for payments under the Act, in recognition of harms suffered by residents of Guam as a result of the occupation of Guam by Imperial Japanese military forces during World War II.

The Commission is issuing this Interim Final Rule to enable the Commission to carry out its functions under the Act. Specifically, this rule adds a new subchapter to the Commission's regulations—subchapter D, 45 CFR part 510—to establish procedures for the filing and adjudication of claims brought under the Act. Subchapter D also provides definitions for certain statutory terms (“severe personal injury” and “personal injury”), as required by the Act. Finally, miscellaneous amendments are made to the Commission's existing regulations at 45 CFR part 500 (Appearance and practice) to reflect an attorney's fees provision contained in the Act.

With respect to the filing of claims, as required by the Act, the Commission intends to establish a claims filing deadline, and will publish notice of the deadline in the Federal Register and in newspaper, radio, and television media in Guam. This notice will be published on or before June 20, 2017 (i.e., not later than 180 days after the date of the enactment of the Act). Thereafter, claimants will have one year from the date on which the Commission publishes this notice to file claims under the Act. See Public Law 114-328, section 1705(b)(2).

The Commission's implementation of this rule as an interim final rule, with provision for post-promulgation public comment, is based on Sections 553(b)(3)(A), 553(b)(3)(B) and 553(d) of the Administrative Procedure Act (APA), 5 U.S.C. 553. Under Section 553(b)(3), an agency may issue a rule without notice of proposed rulemaking and the pre-promulgation opportunity for public comment where “good cause” exists or for “interpretive rules, general statements of policy, or rules of agency organization, procedure, or practice.”

The changes made by this interim final rule fit within the exceptions to the requirement for pre-promulgation opportunity for notice and comment set out in Section 553. An agency may find good cause to exempt a rule from provisions of the APA if it determines that those procedures are impracticable, unnecessary, or contrary to the public interest. See 5 U.S.C. 553(b)(3)(B). The Commission has determined that it is unnecessary and contrary to the public interest to seek public comment prior to promulgating this interim final rule for several reasons. First, delaying the implementation of the rule would delay the determination and payment of appropriate compensation. Eligibility determinations and corresponding payments will not be issued until the rule is effective. Thus, eligible claimants would be harmed by any delay. Second, the interim rule will be subject to public comment before its final implementation. The Commission will consider any public comments made following publication of this interim final rule and make any appropriate adjustments or clarifications in the final rule. Finally, the deadline imposed by Congress to implement the regulations is strict and therefore the Commission has a limited period of time within which to promulgate the regulations.

Furthermore, several of the changes made by this interim final rule fit within the exceptions to the requirement for pre-promulgation opportunity for notice and comment set out in Section 553 for “interpretive rules, general statements of policy, or rules of agency organization, procedure, or practice.” See 5 U.S.C. 553(b)(3)(A). First, miscellaneous amendments are made to the Commission's existing regulations at 45 CFR part 500 (Appearance and practice) to reflect the attorney's fees provisions contained in the Guam Loyalty Recognition Act. These changes reflect general statements of policy; they serve only to advise the public that the Commission may exercise its discretionary power in certain ways regarding attorney appearance and practice before the Commission. Second, the interim final rule adds a new subchapter to the Commission's regulations—subchapter D—to establish procedures for the filing and adjudication of claims under the Guam Loyalty Recognition Act. In this regard, the rule merely incorporates by reference the Commission's existing procedures for the filing and adjudication of claims under the International Claims Settlement Act of 1949 (subchapter C); thus, the new subchapter D is entirely procedural in nature.

The APA also permits an agency to make a rule effective upon date of publication in the Federal Register where “good cause” exists or for “interpretive rules and statements of policy.” 5 U.S.C. 553(d). As stated, the Commission has determined that it would be unnecessary and contrary to the public interest to engage in full notice and comment rulemaking before putting these interim final regulations into effect, and that it is in the public interest to promulgate interim final regulations. For the same reasons, the Commission has determined that there is good cause to make these interim final regulations effective immediately upon publication in the Federal Register, in accordance with Section 553(d) of the APA (5 U.S.C. 553(d)). Therefore, waiver of the 30-day period prior to the rule's effective date is appropriate here. The Commission welcomes public comments on the changes being made by this interim final rule, and will carefully review any comments to ensure that any substantive concerns or issues regarding these changes are addressed in the final rule.

This interim final rule implements the Guam World War II Loyalty Recognition Act, Title XVII, Public Law 114-328, which authorizes the Commission to adjudicate claims for certain harms suffered by Guam residents during World War II. In order to be able to evaluate claims, the Commission will need to collect information from individuals (or personal representatives of deceased individuals) who suffered harm or who are survivors of a decedent who died as a result of the occupation of Guam by Japanese military forces. Accordingly, the Commission will submit an information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the emergency review procedures of the Paperwork Reduction Act of 1995. The Commission will also publish a Notice in the Federal Register soliciting public comment on the information collection associated with this rulemaking.

The Commission, in accordance with the Regulatory Flexibility Act, 5 U.S.C. 605(b), has reviewed this interim final rule and, by approving it, certifies that it will not have a significant economic impact on a substantial number of small entities. This rule sets forth procedures by which the Commission will adjudicate claims for payments under the Guam World War II Loyalty Recognition Act. In its adjudication of claims, the Commission will determine the eligibility of individuals, not entities. Moreover, under 5 U.S.C. 601(6), the term “small entity” does not include the Federal government. Because this rule is being adopted as an interim final rule, a Regulatory Flexibility analysis is not required.

This interim final rule, which enables and is necessary for the Commission to carry out its functions under the Guam World War II Loyalty Recognition Act, has been drafted and reviewed in accordance with Executive Order 12866, “Regulatory Planning and Review” section 1(b), Principles of Regulation, and in accordance with Executive Order 13563, “Improving Regulation and Regulatory Review” section 1(b), General Principles of Regulation.

The Commission has determined that this rule is not a “significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review, and accordingly this rule has not been reviewed by the Office of Management and Budget.

Further, both Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Commission has assessed the costs and benefits of this regulation and believes that the regulatory approach selected maximizes net benefits.

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

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

This interim final 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.

This rule will not result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

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

Accordingly, for the reasons set forth in the preamble, the Foreign Claims Settlement Commission amends 10 CFR parts 500 and 510 as follows:

This summary contains corrections to a Federal Register document, 82 FR 14338 (March 20, 2017).

In final rule FR Doc. 2017-04715, published March 20, 2017 (82 FR 14338), make the following correction:

On November 2, 2015, President Barack Obama signed the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Inflation Act). Public Law 114-74, sec. 701. This amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (Inflation Act) that required each agency to (1) adjust by regulation each maximum civil monetary penalty (CMP), or range of minimum and maximum CMPs, within that agency's jurisdiction by October 23, 1996, and (2) adjust those penalty amounts once every four years thereafter, to reflect inflation. See Public Law 101-410, 104 Stat. 890, 28 U.S.C. 2461, note, as amended by sec. 31001(s)(1) of the Debt Collection Improvement Act of 1996, Public Law 104-134, April 26, 1996, 110 Stat. 1321-373. Under the 2015 Inflation Act, agencies must make annual inflation adjustments, starting January 15, 2017, based on Office of Management and Budget (OMB) guidance.

In the 2015 Inflation Act, Congress recognized the important role CMPs play in deterring violations of Federal laws, regulations, and orders and determined that inflation has diminished the impact of these penalties. In the Inflation Act, Congress countered the effect that inflation has had on the CMPs by having the agencies charged with enforcement responsibility administratively adjust the CMPs.

FRA is authorized as the delegate of the Secretary of Transportation (Secretary) to enforce the Federal railroad safety statutes, regulations, and orders, including the civil penalty provisions codified primarily at 49 U.S.C. ch. 213. See 49 U.S.C. 103 and 49 CFR 1.89; 49 U.S.C. chs. 201-213. FRA currently has safety regulations in 34 parts of the CFR that contain provisions establishing the agency's authority to impose civil penalties if a person violates any requirement in the pertinent portion of a statute or the CFR. In this final rule, FRA is amending each of the separate regulatory provisions and the corresponding footnotes in each Schedule of Civil Penalties appended to those regulations to raise the minimum CMP to $853, ordinary maximum CMP to $27,904, and aggravated maximum CMP to $111,616. Where applicable, FRA is also amending the corresponding appendices to those regulatory provisions which outline FRA enforcement policy. See 49 CFR part 209, app. A; 49 CFR part 228, app. A.

FRA is also publishing this final rule under 49 U.S.C. 5123 and 5124, which authorize civil and criminal penalties for violations of the Federal hazardous material transportation laws or a regulation, order, special permit, or approval issued under those laws. The Pipeline and Hazardous Materials Safety Administration (PHMSA) issues the hazardous material transportation regulations. 49 CFR 1.96(b)(1). However, FRA is authorized, as the Secretary's delegate, to enforce the hazardous material statutes, regulations and orders, including the civil penalty provisions codified primarily at 49 U.S.C. 5123. 49 CFR 1.89(j). In this final rule, FRA amends all references to the minimum and maximum civil penalties in 49 CFR part 209, app. B, to raise the minimum CMP for hazardous materials training violations 1 from $463 to $471; the ordinary maximum CMP per violation from $77,114 to $78,376; and the aggravated maximum CMP from $179,933 to $182,877.

The 2015 Inflation Act requires FRA to calculate the inflation adjustment by increasing the maximum CMP, or the range of minimum and maximum CMPs, based on the Consumer Price Index for the month of October 2016, not seasonally adjusted. OMB guidance, M-17-11, “Implementation of the 2017 annual adjustment pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,” dated Dec. 16, 2016, states that after applying the multiplier of 1.01636, FRA must round the penalty levels to the nearest dollar.2

As the following calculations show, after calculating the inflation adjustment, FRA determined the minimum CMP for rail safety violations should increase to $853; the ordinary maximum CMP should increase to $27,904; and the aggravated maximum CMP should increase to $111,616. FRA also determined the minimum CMP for hazardous materials training violations should increase to $471; the ordinary maximum CMP per hazardous material violation should increase to $78,376; and the aggravated maximum CMP per hazardous material violation should increase to $182,877.

FRA evaluated the minimum rail safety CMP as the 2015 Inflation Act requires. Based on the following calculations, FRA concluded it should increase from $839 to $853. The 2016 multiplier of 1.01636 times $839 equals $852.73, or $853 rounded to the nearest dollar. The inflation adjusted minimum penalty is $853, and applies to all the rail safety statutes, regulations, and orders. This new FRA minimum penalty will apply to penalties assessed on or after January 15, 2017.

FRA evaluated the ordinary maximum rail safety CMP as the 2015 Inflation Act requires. Based on the following calculations, FRA determined it should increase from $27,455 to $27,904. The 2016 multiplier of 1.01636 times $27,455 equals $27,904.16, or $27,904 rounded to the nearest dollar. The inflation adjusted ordinary maximum penalty is $27,904, and applies to all the rail safety statutes, regulations, and orders. This new FRA ordinary maximum penalty will apply to penalties assessed on or after January 15, 2017.

FRA also evaluated the maximum CMP for an aggravated rail safety violation and determined it should increase from $109,819 to $111,616, as the following calculations show. The 2016 multiplier of 1.01636 times $109,819 equals $111,615.64, or $111,616 rounded to the nearest dollar. The inflation adjusted aggravated maximum penalty is $111,616, and applies to all the rail safety statutes, regulations, and orders. This new FRA aggravated maximum penalty will apply to penalties assessed on or after January 15, 2017.

FRA evaluated the minimum CMP for hazardous materials training violations and determined it should increase from $463 to $471 as the following calculations show. The 2016 multiplier of 1.01636 times $463 equals $470.57, or $471 rounded to the nearest dollar. The inflation adjusted minimum penalty for hazardous materials training violations is $471, and applies to all violations of the hazardous materials statutes, regulations, special permits, approvals, and orders related to training. This new FRA minimum penalty for training violations will apply to penalties assessed on or after January 15, 2017.

FRA evaluated the ordinary maximum hazardous materials CMP as the 2015 Inflation Act requires. Based on the following calculations, FRA determined it should increase from $77,114 to $78,376. The 2016 multiplier of 1.01636 times $77,114 equals $78,375.59, or $78,376 rounded to the nearest dollar. The inflation adjusted ordinary maximum penalty is $78,376, and applies to all violations of the hazardous materials transportation statutes, regulations, special permits, approvals, and orders. This new FRA ordinary maximum penalty will apply to penalties assessed on or after January 15, 2017.

FRA also evaluated the maximum hazardous materials CMP for an aggravated violation and determined, based on the following calculations, it should increase from $179,933 to $182,877. The 2016 multiplier of 1.01636 times $179,933 equals $182,876.70, or $182,877 rounded to the nearest dollar. The inflation adjusted aggravated maximum penalty is $182,877, and applies to all violations of the hazardous materials transportation statutes, regulations, special permits, approvals, and orders. This new FRA aggravated maximum penalty will apply to penalties assessed on or after January 15, 2017.

FRA is proceeding to a final rule without a notice of proposed rulemaking or an opportunity for public comment. The adjustments the 2015 Inflation Act requires are ministerial acts over which FRA has no discretion, making public comment unnecessary. As such, notice and comment procedures are “impracticable, unnecessary, or contrary to the public interest” under the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(3)(B). FRA is issuing these amendments as a final rule applicable to all future rail safety and hazardous materials transportation civil penalty cases under its authority to cite for violations that occur on or after the effective date of this final rule.

FRA evaluated this final rule consistent with Executive Order 12866 (Regulatory Planning and Review), Executive Order 13563 (Improving Regulation and Regulatory Review), and DOT policies and procedures. In this final rule, FRA solely implements the annual inflation adjustment following the guidance in OMB memorandum M-17-11. As such, OMB has determined that agency regulations like this final rule are not considered a significant regulatory action under section 3(f) of Executive Order 12866. Further, this rule is not significant under the Regulatory Policies and Procedures of the Department of Transportation (44 FR 11034, Feb. 26, 1979) because it is limited to ministerial acts over which the agency has no discretion, and the economic impact of the final rule is minimal to the extent that preparation of a regulatory evaluation is not warranted.

The Regulatory Flexibility Act of 1980 (RFA), Public Law 96-354, as amended, and codified as amended at 5 U.S.C. 601-612, and Executive Order 13272 (Proper Consideration of Small Entities in Agency Rulemaking), require agency review of proposed and final rules to assess their impact on “small entities” for purposes of the RFA. An agency must prepare a regulatory flexibility analysis unless it determines and certifies that a rule is not expected to have a significant economic impact on a substantial number of small entities. FRA does not expect this final rule will have a significant economic impact on a substantial number of small entities. Although this final rule will apply to railroads, hazardous materials shippers, and others that are considered small entities, there is no economic impact on any person who complies with the Federal railroad safety laws and the regulations and orders issued under those laws, and the Federal hazardous materials laws and the regulations, special permits, approvals, and orders issued under those laws.

In addition, FRA has determined the RFA does not apply to this rulemaking. The 2015 Inflation Act requires FRA to make annual adjustments and does not require FRA to publish an NPRM or provide for notice and comment under the APA. The Small Business Administration's A Guide for Government Agencies: How to Comply with the Regulatory Flexibility Act (2003), provides that:

This final rule will not have a substantial effect on the States, on the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government. Thus, consistent with Executive Order 13132 (Federalism), FRA is not required to prepare a Federalism assessment.

There are no new information collection requirements in this final rule to submit for OMB review under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

This final rule will not result in the expenditure, in the aggregate, of $156,000,000 or more in any one year by State, local, or Indian Tribal governments, or the private sector. Thus, consistent with Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 2 U.S.C. 1532), FRA is not required to prepare a written statement detailing the effect of such an expenditure.

FRA has evaluated this final rule under the National Environmental Policy Act (NEPA; 42 U.S.C. 4321 et seq.), other environmental statutes, related regulatory requirements, and its “Procedures for Considering Environmental Impacts” (FRA's NEPA Procedures) (64 FR 28545, May 26, 1999). FRA has determined that this final rule is categorically excluded from detailed environmental review pursuant to section 4(c)(20) of FRA's NEPA Procedures, “Promulgation of railroad safety rules and policy statements that do not result in significantly increased emissions of air or water pollutants or noise or increased traffic congestion in any mode of transportation.” See 64 FR 28547, May 26, 1999. Categorical exclusions (CEs) are actions identified in an agency's NEPA implementing procedures that do not normally have a significant impact on the environment and therefore do not require either an environmental assessment (EA) or environmental impact statement (EIS). See 40 CFR 1508.4.

In analyzing the applicability of a CE, the agency must also consider whether extraordinary circumstances warrant a more detailed environmental review through the preparation of an EA or EIS. See id. The purpose of this rulemaking is to comply with the Inflation Act, as amended by the 2015 Inflation Act. Specifically, FRA is adjusting the minimum, maximum, and aggravated maximum penalty that it will apply when assessing a civil penalty for a violation of a railroad safety statute, regulation, or order under its authority. FRA is also adjusting the minimum, maximum, and aggravated maximum penalty that it will apply when assessing a civil penalty for a violation of a Federal hazardous materials law, regulation, special permit, approval, or order. Under section 4(c) and (e) of FRA's NEPA Procedures, FRA has concluded no extraordinary circumstances exist with respect to this regulation that might trigger the need for a more detailed environmental review.

FRA does not anticipate any environmental impacts from this requirement and finds there are no extraordinary circumstances present in connection with this final rule.

Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, and DOT Order 5610.2(a) (91 FR 27534, May 10, 2012) require DOT agencies to achieve environmental justice as part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects, including interrelated social and economic effects, of their programs, policies, and activities on minority populations and low-income populations. The DOT Order instructs DOT agencies to address compliance with Executive Order 12898 and requirements within the DOT Order in rulemaking activities, as appropriate. FRA has evaluated this final rule under Executive Order 12898 and the DOT Order and has determined that it would not cause disproportionately high and adverse human health and environmental effects on minority populations or low-income populations.

FRA has evaluated this final rule under the principles and criteria contained in Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, dated November 6, 2000. The final rule would not have a substantial direct effect on one or more Indian tribes, would not impose substantial direct compliance costs on Indian tribal governments, and would not preempt tribal laws. Therefore, the funding and consultation requirements of Executive Order 13175 do not apply, and FRA is not required to prepare a tribal summary impact statement.

In consideration of the foregoing, parts 209, 213, 214, 215, 216, 217, 218, 219, 220, 221, 222, 223, 224, 225, 227, 228, 229, 230, 231, 232, 233, 234, 235, 236, 237, 238, 239, 240, 241, 242, 243, 244, 270, and 272 of subtitle B, chapter II of title 49 of the Code of Federal Regulations are amended as follows:

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) 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.

NMFS is required, under regulations at § 635.28(a)(1), to file a closure notice for publication with the Office of the Federal Register when a BFT quota is reached or is projected to be reached. On and after the effective date and time of such notification, for the remainder of the fishing year or for a specified period as indicated in the notification, retaining, possessing, or landing BFT under that quota category is prohibited until the opening of the subsequent quota period or until such date as specified in the notice.

The base quota for the General category is 466.7 mt. See § 635.27(a). Each of the General category time periods (January, June through August, September, October through November, and December) is allocated a 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. Based on the General category base quota of 466.7 mt, 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. Effective January 1, 2017, NMFS transferred 16.3 mt of the 24.3-mt General category quota allocated for the December 2017 period to the January 2017 period, resulting in an adjusted subquota of 41 mt for the January period and a subquota of 8 mt for the December 2017 period (81 FR 91873, December 19, 2016). Effective March 2, 2017, NMFS transferred 40 mt from the Reserve category to the General category January 2017 subquota period, resulting in an adjusted subquota of 81 mt for the January period (82 FR 12747, March 7, 2017).

Based on the best available landings information for the General category BFT fishery, NMFS has determined that the adjusted General category January 2017 subquota of 81 mt has been reached (i.e., as of March 27, reported landings total approximately 82.4 mt). Therefore, retaining, possessing, or landing large medium or giant BFT by persons aboard vessels permitted in the Atlantic tunas General and HMS Charter/Headboat categories (while fishing commercially) must cease at 11:30 p.m. local time on March 29, 2017. The General category will reopen automatically on June 1, 2017, for the June through August 2017 subperiod. This action applies to Atlantic tunas General category (commercial) permitted vessels and Highly Migratory Species (HMS) Charter/Headboat category permitted vessels when fishing commercially for BFT, and is taken consistent with the regulations at § 635.28(a)(1). The intent of this closure is to prevent any further overharvest of the available General category January BFT subquota.

Fishermen may catch and release (or tag and release) BFT of all sizes, subject to the requirements of the catch-and-release and tag-and-release programs at § 635.26. All BFT that are released must be handled in a manner that will maximize their survival, and without removing the fish from the water, consistent with requirements at § 635.21(a)(1). For additional information on safe handling, see the “Careful Catch and Release” brochure available at www.nmfs.noaa.gov/sfa/hms/. General, HMS Charter/Headboat, Harpoon, and Angling 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 Android or iPhone app.

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 and fishery closures 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. These fisheries are currently underway and the quota for the subcategory has already been exceeded. Delaying this action would be contrary to the public interest because the subquota has already been exceeded and any delay could lead to further exceedance, which may result in the need to reduce quota for the General category later in the year and thus could affect later fishing opportunities. 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 all of the above 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 § 635.28(a)(1), and is exempt from review under Executive Order 12866.