| Page Range | 28761-28976 | |
| FR Document |
| Page and Subject | |
|---|---|
| 83 FR 28969 - National Space Traffic Management Policy | |
| 83 FR 28967 - Father's Day, 2018 | |
| 83 FR 28870 - Sunshine Act Meeting; National Science Board | |
| 83 FR 28801 - Public Comments and Public Hearing on Section 232 National Security Investigation of Imports of Automobiles, Including Cars, SUVs, Vans and Light Trucks, and Automotive Parts; Extension of Comment Period | |
| 83 FR 28847 - Sunshine Act Meeting | |
| 83 FR 28761 - Delegation of Authorities Under Section 1244(c) of the National Defense Authorization Act for Fiscal Year 2018 | |
| 83 FR 28841 - Policy Statement Regarding Long-Term Authorizations To Export Natural Gas to Non-Free Trade Agreement Countries | |
| 83 FR 28849 - Availability of Draft Toxicological Profile: Perfluoroalkyls | |
| 83 FR 28861 - Notice of Intent To Contract for Hydroelectric Power Development on the Bureau of Reclamation's North Unit Main Canal, Deschutes Project, Madras, Oregon | |
| 83 FR 28858 - Updated Collision Risk Model Priors for Estimating Eagle Fatalities at Wind Energy Facilities | |
| 83 FR 28872 - Notice of Public Meeting | |
| 83 FR 28789 - Air Plan Approval; North Carolina: New Source Review for Fine Particulate Matter (PM2.5 | |
| 83 FR 28871 - Notice of Permit Applications Received Under the Antarctic Conservation Act of 1978 | |
| 83 FR 28909 - Notice of Open Public Meetings | |
| 83 FR 28845 - National Advisory Council for Environmental Policy and Technology; Renewal of Charter | |
| 83 FR 28841 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; National Assessment of Educational Progress (NAEP) 2019 and 2020 | |
| 83 FR 28896 - Quarterly Rail Cost Adjustment Factor | |
| 83 FR 28772 - Acquisition Regulation: Removal of EPA Mentor Protégé Program | |
| 83 FR 28795 - Outer Continental Shelf Air Regulations; Consistency Update for California | |
| 83 FR 28845 - Agency Information Collection Activities: Final Collection; Comment Request | |
| 83 FR 28766 - Safety Zones; Marine Events Held in the Captain of the Port Long Island Sound Zone | |
| 83 FR 28770 - Safety Zone; Southern California Annual Fireworks for the San Diego Captain of the Port Zone | |
| 83 FR 28771 - Safety Zone; Annual Events Requiring Safety Zones in the Captain of the Port Lake Michigan Zone-Holiday Celebration Fireworks | |
| 83 FR 28770 - Safety Zone; Chicago Harbor, Navy Pier Southeast, Chicago, IL | |
| 83 FR 28771 - Safety Zone; Milwaukee Harbor, Milwaukee, WI | |
| 83 FR 28783 - Fisheries Off West Coast States; Coastal Pelagic Species Fisheries; Biennial Specifications | |
| 83 FR 28896 - Rescission of Record of Decision and Final Environmental Impact Statement | |
| 83 FR 28846 - Agency Information Collection Activities: Final Collection; Comment Request | |
| 83 FR 28871 - Proposed Submission of Information Collection for OMB Review; Comment Request; Survey of Multiemployer Pension Plan Withdrawal Liability Information | |
| 83 FR 28848 - 1-800 Contacts, Inc. Oral Argument Before the Commission | |
| 83 FR 28848 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company | |
| 83 FR 28843 - Public Hearing for and Extension of Comment Period on Review of the Primary National Ambient Air Quality Standard for Sulfur Oxides | |
| 83 FR 28868 - Information Collection Requirements for OSHA's Alliance Program; Submission for Office of Management and Budget's (OMB) Approval of Information Collection (Paperwork) Requirements | |
| 83 FR 28789 - Copyright Office Fees: Extension of Comment Period | |
| 83 FR 28785 - Drawbridge Operation Regulation; Red River, Shreveport, LA | |
| 83 FR 28900 - Agency Information Collection Activities; Revision of an Approved Information Collection: Inspection, Repair and Maintenance | |
| 83 FR 28900 - Qualification of Drivers; Exemption Applications; Hearing | |
| 83 FR 28896 - Qualification of Drivers; Exemption Applications; Epilepsy and Seizure Disorders | |
| 83 FR 28898 - Hours of Service of Drivers: American Concrete Pumping Association (ACPA); Application for Exemption | |
| 83 FR 28866 - Comment Request for Information Collection for Form ETA-9127, Foreign Labor Certification Quarterly Activity Report, Revision of a Currently Approved Collection | |
| 83 FR 28774 - Extension of Compliance Dates for Medical Examiner's Certification Integration | |
| 83 FR 28824 - 2018 Revision to Technical Guidance for Assessing the Effects of Anthropogenic Sound on Marine Mammal Hearing-Underwater Acoustic Thresholds for Onset of Permanent and Temporary Threshold Shifts | |
| 83 FR 28866 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Extension Without Change of a Currently-Approved Collection Title II of the Americans With Disabilities Act of 1990/Section 504 of the Rehabilitation Act of 1973 Discrimination Complaint Form | |
| 83 FR 28902 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel MAGICAL DAYS; Invitation for Public Comments | |
| 83 FR 28902 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel MAYAN SOL; Invitation for Public Comments | |
| 83 FR 28849 - Draft-National Occupational Research Agenda for Healthcare and Social Assistance | |
| 83 FR 28903 - Denial of Motor Vehicle Defect Petition | |
| 83 FR 28869 - Privacy Act of 1974; New System of Records | |
| 83 FR 28892 - Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Physical Port Fees for C2 | |
| 83 FR 28874 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Make Permanent the Retail Liquidity Program Pilot, Rule 107C, Which Is Currently Set To Expire on June 30, 2018 | |
| 83 FR 28873 - Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Physical Port Fees for Cboe Options | |
| 83 FR 28894 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Designation of a Longer Period for Commission Action on Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To List and Trade the Shares of the ProShares Bitcoin ETF and the ProShares Short Bitcoin ETF Under NYSE Arca Rule 8.200-E, Commentary .02 | |
| 83 FR 28886 - Self-Regulatory Organizations; LCH SA; Order Approving Proposed Rule Changes Related to LCH SA's Recovery and Wind Down Plans | |
| 83 FR 28884 - Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Physical Port Fees for EDGX | |
| 83 FR 28890 - Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Physical Port Fees for EDGA | |
| 83 FR 28851 - Major Depressive Disorder: Developing Drugs for Treatment; Draft Guidance for Industry; Availability | |
| 83 FR 28850 - Antimicrobial Drugs Advisory Committee; Notice of Meeting; Establishment of a Public Docket; Request for Comments | |
| 83 FR 28853 - Prescription Drug User Fee Act Waivers, Reductions, and Refunds for Drug and Biological Products; Draft Guidance for Industry; Availability | |
| 83 FR 28854 - Agency Information Collection Activities; Proposed Collection; Comment Request; Guidance for Industry: Adverse Event Reporting for Outsourcing Facilities Under Section 503B of the Federal Food, Drug, and Cosmetic Act | |
| 83 FR 28856 - Novartis Pharmaceuticals Corporation, et al.; Withdrawal of Approval of Five New Drug Applications | |
| 83 FR 28857 - Agency Information Collection Activities: Submission for OMB Review; Comment Request; Transcript Request Form | |
| 83 FR 28857 - Agency Information Collection Activities: Proposed Collection; Comment Request; Integrated Public Alert and Warning Systems (IPAWS) Memorandum of Agreement Applications | |
| 83 FR 28801 - Order Renewing Order Temporarily Denying Export Privileges | |
| 83 FR 28840 - Submission for OMB Review; Comment Request | |
| 83 FR 28847 - Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB | |
| 83 FR 28863 - Notice of Receipt of Complaint; Solicitation of Comments Relating to the Public Interest | |
| 83 FR 28865 - Certain Human Milk Oligosaccharides and Methods of Producing the Same Institution of Investigation | |
| 83 FR 28895 - Presidential Declaration of a Major Disaster for Public Assistance Only for the State of New Hampshire | |
| 83 FR 28895 - Presidential Declaration of a Major Disaster for the State of Hawaii | |
| 83 FR 28826 - Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to the South Basin Improvements Project at the San Francisco Ferry Terminal | |
| 83 FR 28808 - Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to Marine Site Characterization Surveys off of Rhode Island and Massachusetts | |
| 83 FR 28797 - Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Electronic Reporting for Federally Permitted Charter Vessels and Headboats in Gulf of Mexico Fisheries | |
| 83 FR 28839 - Fisheries of the Northeastern United States; Bluefish Fishery; Scoping Process; Correction | |
| 83 FR 28808 - Pacific Island Fisheries; Western Pacific Stock Assessment Review; Public Meeting; Correction | |
| 83 FR 28860 - Agency Information Collection Activities; North American Breeding Bird Survey | |
| 83 FR 28763 - Airworthiness Directives; Honeywell International Inc. Turboprop and Turboshaft Engines | |
| 83 FR 28787 - Safety Zone; Beaufort Water Festival Air Show, Beaufort, SC | |
| 83 FR 28912 - Definition of “Employer” Under Section 3(5) of ERISA-Association Health Plans |
Industry and Security Bureau
National Oceanic and Atmospheric Administration
Agency for Toxic Substances and Disease Registry
Centers for Disease Control and Prevention
Food and Drug Administration
Coast Guard
Federal Emergency Management Agency
Fish and Wildlife Service
Geological Survey
Reclamation Bureau
Employee Benefits Security Administration
Employment and Training Administration
Occupational Safety and Health Administration
Copyright Office, Library of Congress
Federal Aviation Administration
Federal Highway Administration
Federal Motor Carrier Safety Administration
Maritime Administration
National Highway Traffic Safety Administration
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
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Federal Aviation Administration (FAA), DOT.
Final rule.
We are adopting a new airworthiness directive (AD) for certain Honeywell International Inc. (Honeywell) TPE331 turboprop and TSE331 turboshaft engines. This AD was prompted by recent reports of failures of the direct drive fuel control gears and bearings in the hydraulic torque sensor gear assembly, part number (P/N) 3101726-3. This AD requires initial and repetitive engine oil filter sampling and analysis of the affected engines and inspections of certain hydraulic torque sensor gear assemblies. We are issuing this AD to address the unsafe condition on these products.
This AD is effective July 26, 2018.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of July 26, 2018.
For service information identified in this final rule, contact Honeywell International Inc., 111 S 34th Street, Phoenix, AZ 85034-2802; phone: 800-601-3099; internet:
You may examine the AD docket on the internet at
Joseph Costa, Aerospace Engineer, Los Angeles ACO Branch, FAA, 3960 Paramount Blvd., Lakewood, CA 90712-4137; phone: 562-627-5246; fax: 562-627-5210; email:
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Honeywell International Inc. TPE331 turboprop and TSE331 turboshaft engines. The NPRM published in the
We gave the public the opportunity to participate in developing this final rule. The following presents the comments received on the NPRM and the FAA's response to each comment.
The National Agricultural Aviation Association (NAAA) commented that additional compliance time may be required for oil filter analysis resampling beyond the 25 hours time-in-service proposed by the NPRM. The NAAA noted that the engine may re-enter service after oil sampling. Therefore, the 25 hours time-in-service may be exceeded prior to the operators receiving notification from the laboratory that performed the oil filter analysis.
We agree that the proposed compliance time may have resulted in operators exceeding the 25 hours time-in-service before receiving the results of the oil filter analysis. We, therefore, revised the requirement time for resampling in this AD to 25 hours time in service after receiving notification from the accredited laboratory performing the oil filter analysis. We determined that allowing this additional time in service will improve the quality of the sample. We also clarified that if an inspection or resample is required, then the inspection must occur within 5 days after receiving notification from the laboratory that performed the oil filter analysis.
Honeywell requested that we increase the compliance time for obtaining an oil filter sample from 150 to 200 hours. Honeywell commented that Honeywell Service Bulletin (SB) TPE331-72-0180 indicates a 200-hours compliance time for TPE331-10 operators with at least 800 operating hours per year. Honeywell noted that this compliance time coincides with scheduled maintenance intervals for operators.
We disagree. We are attempting to detect impending torque sensor failures using set response times and reduced oil filter sampling and analysis intervals. We find, therefore, that the 150-hour compliance time meets the safety objectives of this AD. Further, we did not receive any comments from part 121
NAAA and Copperstate Turbine Engine Company commented that a single resampling allowance that may lead to a gearbox inspection is too stringent. They indicated that oil filter resampling experience has shown that multiple resampling tests may be necessary. NAAA commented that the source of the contamination may not always be the material caused by the torque sensor failure. In this situation, NAAA indicated that another resampling, without the inspection, may be warranted. NAAA commented that the sample analysis should guide maintenance personnel in the proper direction without having to tear down an engine unnecessarily.
We partially agree. We agree that some wear elements, such as silver and aluminum, found during the initial oil filter analysis could permit more than one resampling before a required gearbox inspection. We also agree because these elements or alloys may not cause accelerated wear and possible failure of the torque sensor assembly. We disagree with changing the AD because the commenters have not produced evidence that the presence of certain elements may not contribute to the failure of the torque sensor. We will consider AMOC requests to allow additional oil filter resamples before requiring a gearbox inspection provided we receive acceptable technical justification. We did not change this AD.
Honeywell requested that we revise our reference to the service bulletin to refer to the latest revision.
We agree. We updated the reference in the Other Related Service Information paragraph in this AD to Revision 38 of Honeywell SB TPE331-72-0180.
Honeywell requested that we clarify the “Differences Between This Proposed AD and the Service Information” section in the NPRM.
We disagree. The referenced paragraph does not exist in the final rule and the compliance requirements were clearly defined in the NPRM. We did not change this AD.
We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this final rule with the changes described previously and minor editorial changes. We have determined that these minor changes:
• Αre consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
We also determined that these changes will not increase the economic burden on any operator or increase the scope of this final rule.
We reviewed Honeywell Service Information Letter (SIL) P331-97, Revision 11, dated July 23, 2008. The SIL describes procedures for conducting the spectrometric oil and filter analysis program to sample and analyze metal particles in the engine lubricating system. 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
We reviewed the improved procedures and limitations in the Honeywell Torque Sensor Gear Assembly Overhaul Manual with Illustrated Parts List, 72-00-17, Revision 10, dated October 31, 2013, for the TPE331 and TSE331 torque sensor gear assemblies. We also reviewed Honeywell's TPE331 Line Maintenance Training Manual which provides guidance for obtaining oil filter samples. In addition, we reviewed Honeywell SBs TPE331-72-0402, Revision 6, dated November 26, 1997; TPE331-72-0403, Revision 5, dated January 20, 1989; TPE331-72-0404, Revision 8, dated September 13, 2016; TPE331-72-0823, Revision 3, dated September 13, 1996; TSE331-72-5003, Revision 3, dated January 20, 1989; and TPE331-72-0180, Revision 38, dated August 15, 2017. The SBs address the inspection intervals for the oil and filter analysis for the affected TPE331 and TSE331 engines.
We estimate that this AD affects 3,831 engines installed on airplanes of U.S. registry. We estimate the following costs to comply with this AD:
We estimate that 3,831 engines will require a records review to determine if they have an affected hydraulic torque sensor gear assembly installed.
We estimate that 2,542 engines operating under Parts 121 or 135 and 544 engines operating under Part 91 will be required to perform oil filter sampling and analysis.
We estimate that 242 engines will require that the hydraulic torque sensor gear assembly be overhauled during the first year of inspection.
We estimate that 217 engines will require hydraulic torque sensor gear assembly inspection after an unacceptable oil filter analysis during the first year of inspection.
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.
This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to engines, propellers, and associated appliances to the Manager, Engine and Propeller Standards Branch, Policy and Innovation Division.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective July 26, 2018.
None.
This AD applies to Honeywell International Inc. (Honeywell) TPE331-1, -2, -2UA, -3U, -3UW, -5, -5B, -6, -6A, -8, -10, -10AV, -10N, -10P, -10R, -10T, -10U, -10UA, -10UF, -10UR model turboprop and TSE331-3U turboshaft engines with hydraulic torque sensor gear assemblies, part numbers (P/Ns) 3101726-1, -2, or -3, installed.
Joint Aircraft System Component (JASC) Code 7210, Turbine Engine Reduction Gear.
This AD was prompted by recent reports of failures of the direct drive fuel control gears and bearings in the hydraulic torque sensor gear assembly, P/N 3101726-3. We are issuing this AD to prevent failure of the hydraulic torque sensor gear assembly. The unsafe condition, if not addressed, could result in failure of the hydraulic torque sensor gear assembly, in-flight shutdown, and reduced control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
(1) Obtain an initial engine oil filter sample of the affected engines within 150 hours time in service after the effective date of this AD. You can find guidance for obtaining oil filter samples in Honeywell's engine training manuals; for example, see the TPE331 Line Maintenance Training Manual.
(2) Submit the engine oil filter sample within 3 days of sampling to an ISO/IEC 17025-accredited laboratory capable of performing analysis using ASTM D5185, Standard Test Method for Multielement Determination of Used and Unused Lubricating Oils and Base Oils by Inductively Coupled Plasma Atomic Emission Spectrometry (ICP-AES). You can find a list of Honeywell-authorized laboratories capable of performing this analysis in paragraph 1.D.(10) of Honeywell Service Information Letter (SIL) P331-97, Revision 11, dated July 23, 2008.
(3) Perform an oil filter analysis for wear metals and evaluate filter contents using paragraphs 1.D.(4) and (5) of Honeywell SIL P331-97, Revision 11, dated July 23, 2008. Guidelines for interpreting analysis results can be found in paragraph (8) of Honeywell SIL P331-97.
(4) For those engines where the oil filter analysis indicates the need for an inspection or resample, as specified in Figures 1, 2 or 3 of the Honeywell SIL P331-97, Revision 11, dated July 23, 2008, accomplish the following:
(i) If Figures 1, 2, or 3 indicate an inspection is required, within 5 days after receiving notification from the laboratory that performed the analysis, inspect the torque sensor gear assembly using paragraph (g)(4)(iii) of this AD.
(ii) If Figures 1, 2, or 3 indicate a resample is required, perform a repeat oil filter sample and analysis, within 25 hours time in service after receiving notification from the laboratory that performs the analysis to evaluate for wear metals in accordance with paragraphs (g)(1), (2) and (3) of this AD.
(A) If the resample indicates a second resample or inspection is required, within 5 days after receiving notification from the laboratory that performed the analysis, inspect the hydraulic torque sensor gear assembly using paragraph (g)(4)(iii) of this AD.
(B) Reserved.
(iii) Inspect the hydraulic torque sensor gear assembly using the following steps:
(A) Remove bearings, P/Ns 358893-1, 3103035-1, 3103585-1 or 70100168-1, from the assembled spur gear and fuel control drive gearshaft and inspect or replace. Guidance for performing the inspection can be found in Section 70-00-00, Standard Practices of the applicable TPE331 engine maintenance manual. For example, see paragraph 5., “Bearing Inspection,” on pages 11-12 of Honeywell Maintenance Manual 70-00-00, TPE331-10 (Report No. 72-00-27), dated February 29, 2000.
(B) Visually inspect the gearshaft teeth for scoring, pitting, chipping, metal deposits or corner breakage. Visual defects on gear teeth are acceptable if defects cannot be felt using a 0.031 inch diameter stylus. No corner breakage is allowed.
(5) Thereafter, repeat the steps identified in paragraphs (g)(1) through (4) of this AD every additional 150 hours time in service after last oil filter sampling.
(6) For any hydraulic torque sensor gear assembly that fails the inspection required by paragraph (g) of this AD, remove the affected hydraulic torque sensor gear assembly and, before further flight, replace with a part eligible for installation.
After the effective date of this AD, do not use the Honeywell Torque Sensor Gear Assembly Overhaul Manual with Illustrated Parts List, 72-00-17, Revision No. 9, dated, July 20, 1992, or earlier versions, to overhaul TPE331 or TSE331 hydraulic torque sensor gear assemblies, P/Ns 3101726-1, -2, or -3.
(1) The Manager, Los Angeles ACO Branch, FAA has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (j) of this AD.
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
For more information about this AD, contact Joseph Costa, Aerospace Engineer, Los Angeles ACO Branch, FAA, 3960 Paramount Blvd., Lakewood, CA 90712-4137; phone: 562-627-5246; fax: 562-627-5210; email:
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Honeywell Service Information Letter P331-97, Revision 11, dated July 23, 2008.
(ii) Reserved.
(3) For Honeywell service information identified in this AD, contact Honeywell International Inc., 111 S 34th Street, Phoenix, AZ 85034-2802; phone: 800-601-3099; internet:
(4) You may view this service information at FAA, Engine and Propeller Standards Branch, Policy and Innovation Division, 1200 District Avenue, Burlington, MA. For information on the availability of this material at the FAA, call 781-238-7759.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing nine temporary safety zones for fireworks displays within the Captain of the Port (COTP) Long Island Sound (LIS) Zone. This temporary final rule is necessary to provide for the safety of life on navigable waters during these events. Entry into, transit through, mooring or anchoring within these limited access areas is prohibited unless authorized by the COTP LIS.
This rule is effective without actual notice from June 21, 2018 through July 15, 2018. For the purposes of enforcement, actual notice will be used from May 27, 2018, through June 21, 2018.
To view documents mentioned in this preamble as being
If you have questions on this rule, contact Petty Officer Amber Arnold, Prevention Department, Coast Guard Sector Long Island Sound, telephone (203) 468-4583, email
This rulemaking establishes nine safety zones for fireworks displays. Each event and its corresponding regulatory history are discussed below.
50th Birthday Party Fireworks is a first time marine event with no regulatory history.
Fairfield Aerial Fireworks is a recurring marine event with regulatory history and is cited in 33 CFR 165.151(7.16). This event has been included in this rule due to deviation from the cite date.
City of Stamford Fireworks is a recurring marine event with regulatory history and is cited in 33 CFR 165.151(7.12). This event has been included in this rule due to deviation from the cite date.
City of West Haven Fireworks is a recurring marine event with regulatory history and is cited in 33 CFR 165.151(7.13). This event has been included in this rule due to deviation from the cite date.
Madison Fireworks is a recurring marine event with regulatory history and is cited in 33 CFR 165.151(7.38). This event has been included in this rule due to deviation from the cite date.
Village of Asharoken Fireworks is a recurring marine event with regulatory history and is cited in 33 CFR 165.151(7.24). This event has been included in this rule due to deviation from the cite position.
City of Norwich July Fireworks is a recurring marine event with regulatory history and is cited in 33 CFR 165.151(7.11). This event has been included in this rule due to deviation from the cite date.
City of Middletown Fireworks is a recurring marine event with regulatory history and is cited in 33 CFR 165.151(7.9). This event has been included in this rule due to deviation from the cite date.
Riverfest Fireworks is a recurring marine event with regulatory history and is cited in 33 CFR 165.151(7.23). This event has been included in this rule due to deviation from the cite date.
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 NPRM with respect to this rule because doing so would be impracticable and contrary to the public interest. The event sponsors were late in submitting marine event applications. These late submissions did not give the Coast Guard enough time to publish an NPRM, take public comments, and issue a final rule before these events take place. It is impracticable to publish an NPRM because we must establish these safety zones by May 27, 2018. Thus, waiting for a comment period to run is also contrary to the public interest as it would inhibit the Coast Guard's mission to keep the ports and waterways safe.
Under 5 U.S.C. 553(d)(3), and for the same reasons stated in the preceding paragraph, the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this temporary rule under authority in 33 U.S.C. 1231. The COTP LIS has determined that the safety zones established by this temporary final rule are necessary to provide for the safety of life on navigable waterways before, during and after these scheduled events.
This rule establishes nine safety zones for nine fireworks displays. The location of these safety zones are as follows:
This rule prevents restricts vessel movement within the areas specifically designated as a safety zone to reduce the safety risks associated with specific marine events. Vessels are prohibited from entering, transiting, mooring, or anchoring with the safety zones during the period of enforcement of each safety zone unless authorized by the COTP or designated representative.
The Coast Guard will notify the public and local mariners of these safety zones through appropriate means, which may include, but are not limited to, publication in the
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on 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.
The Coast Guard determined that this rulemaking is not a significant regulatory action for the following reasons: (1) The enforcement of these safety zones will be relatively short in duration, lasting at most two hours; (2) persons or vessels desiring to enter these safety zones may do so with permission from the COTP LIS or a designated representative; (3) these safety zones are designed in a way to limit impacts on vessel traffic, permitting vessels to navigate in other portions of the waterway not designated as a safety zone; and (4) the Coast Guard will notify the public of the enforcement of this rule via appropriate means, such as via Local Notice to Mariners and Broadcast Notice to Mariners to increase public awareness of these safety zones.
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 these regulated areas 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
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 proposed 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 Orders 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
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 temporary rule involves the establishment of nine temporary safety zones. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration (REC) supporting this determination will be available in the docket where indicated under
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and record keeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(d)
(2) In accordance with the general regulations in § 165.23, entry into or movement within these zones is prohibited unless authorized by the COTP Long Island Sound.
(3) Any vessel given permission to deviate from these regulations must comply with all directions given to them by the COTP Long Island Sound, or a designated representative.
(4) Any vessel given permission to enter or operate in these safety zones must comply with all directions given to them by the COTP Long Island Sound or a designated representative.
(5) Upon being hailed by a U.S. Coast Guard vessel by siren, radio, flashing light or other means, the operator of the vessel shall proceed as directed.
(6) The regulated area for all fireworks displays listed in Table 1 to this section is that area of navigable waters within a 1000 foot radius of the launch platform or launch site for each fireworks display.
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce the Navy Pier Southeast Safety Zone within the Chicago Harbor for multiple firework events during June and September 2018. This action is necessary and intended to ensure the safety of life and property on navigable waters prior to, during, and immediately after firework displays. During the enforcement periods listed below, entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan or a designated representative.
The regulation in 33 CFR 165.931 will be enforced at the time specified below in
If you have questions about this notice of enforcement, call or email LT John Ramos, Waterways Management Division, Marine Safety Unit Chicago, U.S. Coast Guard; telephone (630) 986-2155, email
The Coast Guard will enforce Safety Zone; Chicago Harbor, Navy Pier Southeast, Chicago, IL listed in 33 CFR 165.931, on June 26, 2018 from 9:10 p.m. until 9:25 p.m., September 7, 2018 from 10:00 p.m. until 10:10 p.m., and September 20, 2018 from 8:30 p.m. until 8:40 p.m. This safety zone encompasses all waters of Lake Michigan within Chicago Harbor bounded by coordinates beginning at 41°53′26.5″ N, 087°35′26.5″ W; then south to 41°53′7.6″ N, 087°35′26.3″ W; then west to 41°53′7.6″ N, 087°36′23.2″ W; then north to 41°53′26.5″ N, 087°36′24.6″ W; then east back to the point of origin (NAD 83). Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan or a designated on-scene representative.
This notice of enforcement is issued under authority of 33 CFR 165.931 and 5 U.S.C. 552 (a). In addition to this notice of enforcement in the
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce a safety zone for the Sea World Fireworks on the waters of Mission Bay, CA, on September 1 through 2, 2018. This safety zone is necessary to provide for the safety of the participants, spectators, official vessels of the events, and general users of the waterway. Our regulation for the Southern California annual fireworks for the San Diego Captain of the Port Zone identifies the regulated area for the events. During the enforcement period, no spectators shall anchor, block, loiter in, or impede the transit of official patrol vessels in the regulated area without the approval of the Captain of the Port, or his designated representative.
The regulations in 33 CFR 165.1123, Table 1, Item 7, will be enforced from 8:30 p.m. through 10:30 p.m. on September 1 through September 2, 2018.
If you have questions on this publication, call or email Lieutenant Junior Grade Briana Biagas, Waterways Management, U.S. Coast Guard Sector San Diego, CA; telephone 619-278-7656, email
The Coast Guard will enforce the regulations in 33 CFR 165.1123 for a safety zone for the Sea World Fireworks on the waters of Mission Bay, CA, in 33 CFR 165.1123, Table 1, Item 7 of that section, from 8:30 p.m. through 10:30 p.m. on September 1 through 2, 2018. This action is being taken to provide for the safety of life on navigable waterways during the fireworks events. Our regulation for Southern California annual fireworks events for the San Diego Captain of the Port Zone identifies the regulated area for the events. Under the provisions of 33 CFR 165.1123, a vessel may not enter the regulated area, unless it receives permission from the Captain of the Port, or his designated representative. Spectator vessels may safely transit outside the regulated area but may not anchor, block, loiter, or impede the transit of participants or official patrol vessels. The Coast Guard may be assisted by other Federal, State, or Local
This document is issued under authority of 33 CFR 165.1123 and 5 U.S.C. 552(a). In addition to this document in the
If the Captain of the Port or his designated representative determines that the regulated area need not be enforced for the full duration stated on this document, he or she may use a Broadcast Notice to Mariners or other communications coordinated with the event sponsor to grant general permission to enter the regulated area.
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce the safety zone on the Milwaukee Harbor, Milwaukee, WI for annual fireworks displays in the Captain of the Port Lake Michigan zone at specified times from June 27, 2018 through September 8, 2018. This action is necessary and intended to ensure safety of life on navigable waterways before, during and after this event. During the enforcement period, entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan or a designated representative.
The regulations in 33 CFR 165.935 will be enforced at the times specified below in
If you have questions about this notice of enforcement, call or email marine event coordinator MSTC Kaleena Carpino, Prevention Department, Coast Guard Sector Lake Michigan, Milwaukee, WI telephone (414) 747-7148, email
The Coast Guard will enforce the Milwaukee Harbor Safety Zone listed in 33 CFR 165.935 at the following times, for the following events.
(1)
(2)
(3)
(4)
This action is being taken to provide for the safety of life on navigable waterways of the Milwaukee Harbor, Milwaukee, WI. This safety zone will encompass the waters of Lake Michigan within Milwaukee Harbor including the Harbor Island Lagoon enclosed by a line connecting the following points: Beginning at 43°02′00″ N, 087°53′53″ W; then south to 43°01′44″ N, 087°53′53″ W; then east to 43°01′44″ N, 087°53′25″ W; then north to 43°02′00″ N, 087°53′25″ W; then west to the point of origin. (NAD 83). Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan or a designated on-scene representative.
This notice of enforcement is issued under authority of 33 CFR 165.935; Safety Zones, Milwaukee Harbor, Milwaukee, WI, and 5 U.S.C. 552 (a). In addition to this publication in the
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce the safety zone on the Kewaunee River in Kewaunee, WI for the Holiday Celebration Fireworks on July 3, 2018. This action is necessary and intended to ensure safety of life on navigable waters immediately prior to, during, and after the fireworks display. During the enforcement period, entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan or a designated representative.
The regulations in 33 CFR 165.929 will be enforced for safety zone (e)(52), Table 165.929, from 9:30 p.m. through 9:45 p.m. on July 3, 2018.
If you have questions on this document, call or email marine event coordinator, MSTC Kaleena Carpino, Prevention Department, Coast Guard Sector Lake Michigan, Milwaukee, WI; telephone (414) 747-7148; email
The Coast Guard will enforce the Holiday Celebration Fireworks safety zone listed as item (e)(52) in Table 165.929 of 33 CFR 165.929 from 9:30 p.m. through 9:45 p.m. on July 3, 2018 on all waters of Kewaunee Harbor and Lake Michigan within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 44°27.481′ N, 087°29.735′ W (NAD 83). Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan or a designated 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). In addition to this publication in the
Environmental Protection Agency (EPA).
Direct final rule.
The Environmental Protection Agency (EPA or Agency) is taking direct final action to amend the EPA Acquisition Regulation (EPAAR) by removing Mentor-protégé clause requirement and the corresponding provision and clause, “Mentor Protégé Program” and “Procedures for Participation in the EPA Mentor Protégé Program”.
This final rule is effective on September 19, 2018 without further notice, unless EPA receives adverse comment by July 23, 2018. If EPA receives adverse comment, we will publish a timely withdrawal in the
Submit your comments, identified by Docket ID No. EPA-HQ-OARM-2018-0165, at
Shakethia Allen, Policy, Training, and Oversight Division, Acquisition Policy and Training Service Center (3802R), Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone number: 202-564-5157; email address:
This direct final rule makes the following changes to 48 CFR parts 1519 and 1552: (1) Remove 1519.203, Mentor-protégé, (2) clause 1552.219-70, Mentor Protégé Program, and (3) provision 1552.219-71, Procedures for Participation in the EPA Mentor Protégé Program.
EPA is publishing this rule without a prior proposed rule because we view this as a noncontroversial action and anticipate no adverse comment. If EPA receives adverse comment, we will publish a timely withdrawal in the
EPAAR 1519.203 and corresponding clause and provision, respectively, 1552.219-70 and 1552.219-71 apply to all contractors who hold a current contract with EPA which includes these clauses.
1.
2.
• Identify the rulemaking by docket number and other identifying information (subject heading,
• Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.
• Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.
• Describe any assumptions and provide any technical information and/or data that you used.
• If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.
• Provide specific examples to illustrate your concerns, and suggest alternatives.
• Explain your views as clearly as possible, avoiding the use of profanity or personal threats.
• Make sure to submit your comments by the comment period deadline identified.
The U.S. Environmental Protection Agency Mentor-Protégé Program was established to stimulate small disadvantaged businesses (SDBs) and women-owned small businesses (WOSBs) participation in Agency contracts. Prime contractors (mentors) provide technical and managerial support to SDBs or WOSBs subcontractors (protégés).
The Small Business Jobs Act of 2010 and the National Defense Authorization Act for Fiscal Year 2013 provided authority for the Small Business Administration (SBA) to establish mentor-protégé programs for all small businesses. Rather than creating separate programs for each constituency—Service Disabled Veteran Owned Businesses, Women Owned Small Businesses, Historically Underutilized Business Zones—the SBA chose to create a single, all-inclusive mentor-protégé program modeled on the successful mentor-protégé program available to participants in its 8(a) program. SBA's mentor protégé program is federal wide, so EPA can use it instead of managing its own program.
This action is not a “significant regulatory action” under the terms of Executive Order (E.O.) 12866 (58 FR 51735, October 4, 1993) and therefore, not subject to review under the E.O..
This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501
The Regulatory Flexibility Act generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute; unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impact of this rule on small entities,”small entity”is defined as: (1) A small business that meets the definition of a small business found in the Small Business Act and codified at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. After considering the economic impacts of this rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This action removes a current EPAAR provision and does not impose requirements involving capital investment, implementing procedures, or record keeping. This rule will not have a significant economic impact on small entities.
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, Local, and Tribal governments and the private sector. This rule contains no Federal mandates (under the regulatory provisions of the Title II of the UMRA) for State, Local, and Tribal governments or the private sector. The rule imposes no enforceable duty on any State, Local or Tribal governments or the private sector. Thus, the rule is not subject to the requirements of sections 202 and 205 of the UMRA.
Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and Local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government as specified in Executive Order 13132.
Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This rule does not have tribal implications as specified in Executive Order 13175.
Executive Order 13045, entitled “Protection of Children from Environmental Health and Safety Risks” (62 FR 19885, April 23, 1997), applies to any rule that: (1) Is determined to be economically significant as defined under Executive Order 12886, and (2) concerns an environmental health or safety risk that may have a proportionate effect on children.
This rule is not subject to Executive Order 13045 because it is not an economically significant rule as defined by Executive Order 12866, and because it does not involve decisions on environmental health or safety risks.
This final rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution or Use” (66 FR 28335, May 22, 2001), because it is not a significant regulatory action under Executive Order 12866.
Section 12(d) (15 U.S.C. 272 note) of NTTAA, Public Law 104-113, directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (
Executive Order 12898 Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States. EPA has determined that this final rulemaking will not have disproportionately high and adverse
The Congressional Review Act, 5 U.S.C. 801
Environmental protection, Government procurement, Reporting and recordkeeping requirements, Small businesses.
For the reasons stated in the preamble, 48 CFR parts 1519 and 1552 are amended as set forth below:
Sec. 205(c), 63 Stat. 390, as amended, 40 U.S.C. 486(c).
5 U.S.C. 301 and 41 U.S.C. 418b.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Interim final rule; request for comments.
FMCSA amends its regulations to delay the compliance date from June 22, 2018, to June 22, 2021, for several provisions of its April 23, 2015 Medical Examiner's Certification Integration final rule. This action is being taken to provide FMCSA additional time to complete certain information technology (IT) system development tasks for its National Registry of Certified Medical Examiners (National Registry) and provide the State Driver's Licensing Agencies (SDLAs) sufficient time to make the necessary IT programming changes after upgrades to the National Registry.
You may submit comments identified by Docket Number FMCSA-2018-0152 using any of the following methods:
•
•
•
•
To avoid duplication, please use only one of these four methods. See the “Public Participation and Request for Comments” portion of the
Ms. Christine A. Hydock, Chief, Medical Programs Division, Federal Motor Carrier Safety Administration, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, by telephone at 202-366-4001, or by email at
If you submit a comment, please include the docket number for this interim final rule (Docket No. FMCSA-2018-0152), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
FMCSA will consider all comments and material received during the
Confidential Business Information (CBI) is commercial or financial information that is customarily not made available to the public by the submitter. Under the Freedom of Information Act, CBI is eligible for protection from public disclosure. If you have CBI that is relevant or responsive to this interim final rule it is important that you clearly designate the submitted comments as CBI. Accordingly, please mark each page of your submission as “confidential” or “CBI.” Submissions designated as CBI and meeting the definition noted above will not be placed in the public docket of this interim final rule. Submissions containing CBI should be sent to Mr. Brian Dahlin, Chief, Regulatory Evaluation Division, 1200 New Jersey Avenue SE, Washington, DC 20590. Any commentary that FMCSA receives that is not specifically designated as CBI will be placed in the public docket for this rulemaking.
FMCSA will consider all comments and material received during the comment period.
To view comments, as well as any documents mentioned in this preamble as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to
Under 49 U.S.C. 31136(g), added by section 5202 of the Fixing America's Surface Transportation or FAST Act, Public Law 114-94, 129 Stat. 1312, 1534 (Dec. 4, 2015), FMCSA is required either to proceed with negotiated rulemaking or to publish an ANPRM for any major rulemaking, unless the Agency finds good cause that an ANPRM is impracticable, unnecessary, or contrary to the public interest. FMCSA has determined that this interim final rule is not major; therefore, neither an ANPRM nor a negotiated rulemaking is required.
This interim final rule delays the compliance date for several provisions in the Medical Examiner's Certification Integration final rule (80 FR 22790, Apr. 23, 2015) from June 22, 2018, to June 22, 2021. Specifically, it postpones, through June 22, 2021, the provisions for: (1) FMCSA to electronically, transmit from the National Registry to the SDLAs, driver identification information, examination results, and restriction information from examinations performed for holders of commercial learner's permits (CLPs) or commercial driver's licenses (CDLs) (interstate and intrastate); (2) FMCSA to electronically transmit to the SDLAs medical variance information for all commercial motor vehicle (CMV) drivers; (3) SDLAs to post on the Commercial Driver's License Information System (CDLIS) driver record the driver identification, examination results, and restriction information received electronically from FMCSA; and (4) motor carriers to no longer be required to verify that CLP/CDL drivers were certified by a certified medical examiner (ME) listed on the National Registry.
This rule results in neither costs nor benefits but aligns the compliance dates with the date when the IT systems will be ready and, thus, when the costs and benefits estimated in the 2015 final rule can be realized.
The legal basis of the 2015 final rule, set out at 80 FR 22791-22792, also serves as the legal basis for this interim final rule. Brief summaries of the relevant legal bases for the actions taken in this interim final rule are set out below.
FMCSA is required by statute to establish standards for the physical qualifications of drivers who operate CMVs in interstate commerce for non-excepted industries (49 U.S.C. 31136(a)(3) and 31502(b)). Subject to certain limited exceptions,
The authority for FMCSA to require an operator of a CMV to obtain a CDL is based on 49 U.S.C. 31302 and the authority to set minimum standards for the testing and fitness of such operators rests on 49 U.S.C.31305.
Under 49 U.S.C. 31311 and 31314, FMCSA has authority to prescribe procedures and requirements the States must follow when issuing CDLs (see, generally, 49 CFR parts 383 and 384). In particular, under section 31314, in order to avoid loss of certain Federal-aid highway funds otherwise apportioned under 23 U.S.C. 104(b), each State must comply with the requirement in 49 U.S.C. 31311(a)(1) to adopt and carry out a program for testing and ensuring the fitness of individuals to operate CMVs consistent with the minimum standards prescribed by FMCSA under 49 U.S.C. 31305(a) (
FMCSA has authority under 49 U.S.C. 31133(a)(8) and 31149(c)(1)(E) to require MEs on the National Registry to obtain information from CMV drivers regarding their physical health, to record and retain the results of the physical examinations of CMV drivers, and to require frequent reporting of the information contained on the MECs they issue. Section 31133(a)(8) gives the Agency broad administrative powers (specifically “to prescribe recordkeeping
Authority to implement these various statutory provisions has been delegated to the Administrator of FMCSA (49 CFR 1.87(f)).
In 2008, FMCSA issued the Medical Certification Requirements as Part of the Commercial Driver's License (CDL) final rule (73 FR 73096, Dec. 1, 2008). This rule established requirements for CDL drivers to provide MEC information to SDLAs for posting on the driver record. Then the National Registry of Certified Medical Examiners final rule was issued to establish the National Registry and require that MEs listed on the National Registry perform all physical examinations of CMV drivers and issue MECs to them (77 FR 24104, Apr. 20, 2012). The provisions of these final rules are now in effect.
The Medical Examiner's Certification Integration final rule adopted a number of changes in the procedures for the preparation, recording, and utilization of Medical Examination Report Forms and MECs for CMV drivers (80 FR 22790, Apr. 23, 2015; 80 FR 35577, Jun. 22, 2015). Some of those changes, such as the specific forms to be used by MEs to record the results of physical examinations and to certify CMV drivers as physically qualified, are already in effect.
But several provisions were adopted with a compliance date of June 22, 2018, a delay of 3 years, primarily to allow the SDLAs and FMCSA sufficient time to develop, test and install the necessary IT infrastructure to implement them. The final rule required MEs to report results of all CMV drivers' physical examinations performed (including the results of examinations where the driver was found not to be qualified) to FMCSA by midnight (local time) of the next calendar day following the examination. The reporting included results on all CMV drivers who are required to be medically certified to operate in interstate commerce, not only those who hold or apply for CLPs or CDLs. The reported results would be of any examinations performed in accordance with the Federal Motor Carrier Safety Regulations (FMCSRs), as well as those in accordance with any applicable State variances (which will be valid for intrastate operations only). For holders of CLPs/CDLs (interstate and intrastate), FMCSA stated that it would electronically transmit from the National Registry to the SDLAs the driver identification, examination results, and restriction information. The SDLAs would in turn be required to post this information to the CDLIS driver record. The Agency also said it would electronically transmit medical variance information for all CMV drivers to the SDLAs. If the information transmitted so required, the SDLAs were required to change the driver's certified status on the CDLIS driver record and/or begin a downgrade of the CLP/CDL. Motor carriers, enforcement personnel, and other interested parties would be permitted to rely on the medical certification information on the CDLIS driver record and would no longer be permitted to rely on the original paper MEC as proof of medical certification.
The 2015 final rule also adopted new provisions based on the new reporting requirement for MEs that would invalidate any existing MEC held by a CMV driver whenever the driver failed a new physical qualification examination. If the driver involved was a CLP/CDL holder, such invalidation would be electronically transmitted from the National Registry to the SDLAs for the SDLA to change the certified status on the CDLIS driver record and/or begin a downgrade of the CLP/CDL.
As the compliance date of June 22, 2018, draws nearer, FMCSA has reluctantly concluded that it will not be able to electronically transmit MEC information from the National Registry to the SDLAs by that date. Further, the SDLAs will not be able to electronically receive the MEC information from the National Registry for posting to the CDLIS driver record, as intended by the Medical Examiner's Certification Integration final rule. Although the Agency has initiated the IT development work to enhance the National Registry to enable the Agency to electronically transmit MEC information and medical variances to the States, along with the programming code the States would need to implement changes to their IT systems to receive the data, none of this work will be completed in time to meet the June 22, 2018 compliance date. Under these circumstances, neither the Agency nor the stakeholders would be able to rely on the CDLIS driver record as official proof of medical certification, unless drivers continue to provide the original paper MEC to the SDLAs, as is being done presently. All of the functions regarding electronic transmission of data that were to be implemented on June 22, 2018, are dependent upon the development and implementation of the IT infrastructure that will not be available on June 22, 2018. For this reason, FMCSA decided to extend the compliance date to June 22, 2021, to ensure that the SDLAs have sufficient time once the final specifications are released to make the necessary IT programming changes.
This interim final rule is effective immediately and establishes, for most provisions in the 2015 final rule, a new compliance date of June 22, 2021. The specific provisions impacted by this change are listed in the Section-by-Section discussion below. This delayed compliance date means that through June 21, 2021:
• Certified MEs must continue issuing MECs to qualified CLP/CDL applicants/holders;
• CLP/CDL applicants/holders must continue ensuring that the SDLA receives a copy of their MEC;
• Motor carriers must continue verifying that drivers were certified by an ME listed on the National Registry; and
• SDLAs must continue processing paper copies of MECs they receive from CLP/CDL applicants/holders.
It should be noted that the compliance date in today's rule remains as June 22, 2018, for the requirement for MEs to report results of all CMV driver physical examinations performed (including the results of examinations where the driver was found not to be qualified) to FMCSA by midnight (local time) of the next calendar day following the examination. In other words, except for the ME reporting requirement, this
As noted above, FMCSA is not delaying the requirement for MEs performing physical examinations of CMV drivers to report results of all CMV drivers' physical examinations (including the results of examinations where the driver was found not to be qualified) to FMCSA by midnight (local time) of the next calendar day following the examination, since several MEs already submit such results more frequently than monthly. Having the MEs begin submitting reports by midnight (local time) of the next calendar day following the examination also allows FMCSA to begin electronically transmitting this important safety data to each State when that State is ready to receive the information, thereby providing States additional flexibility to implement the provisions of this rulemaking at their own pace. FMCSA believes some States may be prepared to receive this data ahead of the June 22, 2021, date to take advantage of the efficiencies and added security the new process affords.
When FMCSA is ready to begin electronically transmitting MEC information from the National Registry, and an SDLA is ready to begin receiving this information electronically from the National Registry, FMCSA will work with the SDLA involved on the most appropriate means to use such electronic transmissions. FMCSA states that, under such circumstances, electronic transmission of the MEC information may be an acceptable means for CDL and CLP holders to satisfy the requirement of providing the MEC to the SDLA. In order to avoid any uncertainty, provisions are being added to the appropriate regulations stating that, in case of a conflict between the medical certification information provided electronically by FMCSA and information on a paper version of the MEC, the electronic record will be controlling. On the other hand, the provisions in the regulations governing the handling of these matters under the current procedures will remain in effect through June 21, 2021, to ensure continued compliance by SDLAs and other affected stakeholders until the electronic transmission of MEC information is operational for all SDLAs.
If some SDLAs begin receiving MEC information from FMCSA prior to June 22, 2021, FMCSA and the SDLAs will make every effort to advise all stakeholders when such handling begins. MEs listed on the National Registry, employers and enforcement personnel (both State and Federal) will need to be made fully aware that some SDLAs may be following procedures different from the remaining States.
Although the promulgation of a final rule adjusting compliance dates would ordinarily involve the issuance of a notice of proposed rulemaking (NPRM) and an opportunity for public comment, the Administrative Procedure Act does permit their omission for good cause, when “notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest” (5 U.S.C. 553(b)(B)). The necessary IT infrastructure to enable stakeholders to comply with the regulatory provisions involved will not be available on June 22, 2018. Under these circumstances, and in order to timely clarify the applicable regulatory requirements, FMCSA finds that there is good cause to issue this interim final rule. A proposed rule allowing prior notice and opportunity for comment could not be completed before June 22 and is therefore both impractical and contrary to the public interest. An opportunity for public comment is provided after publication of the interim final rule. All comments will be reviewed and the interim final rule may be amended as a result of those comments.
The FMCSRs, and any exceptions to the FMCSRs, apply only within the United States (and, in some cases, United States territories). Motor carriers and drivers are subject to the laws and regulations of the countries in which they operate, unless an international agreement states otherwise. Drivers and carriers should be aware of the regulatory differences among nations.
In parts 383, 384, and 391, FMCSA makes a few clarifying edits and changes the date of the rule as stated in the table below.
Identical new paragraphs are added to §§ 383.71(h)(4), 383.73(o)(6), and 391.23(m)(4). The added text states that in the event of a conflict between the medical certification information provided electronically by FMCSA and a paper copy of the MEC, the medical certification information provided electronically by FMCSA shall control.
In addition to the changes in the compliance dates in § 391.41 noted in the table above, FMCSA adds the phrase “and through June 21, 2021” to § 391.41(a)(2)(ii), following the phrase, “Beginning on July 8, 2015.” This provides an ending date for the provision that CLP holders, while operating a CMV, would be required to carry their MEC, or a copy, for up to 15 days after the date they were issued. FMCSA also adds a new paragraph (a)(2)(iv) that states that in the event of a conflict between the medical certification information provided electronically by FMCSA and a paper copy of the MEC, the medical certification information provided electronically by FMCSA shall control.
FMCSA has determined that this interim final rule is not a significant regulatory action under section 3(f) of E.O. 12866 (58 FR 51735, Oct. 4, 1993), Regulatory Planning and Review, as supplemented by E.O. 13563 (76 FR 3821, Jan. 21, 2011), Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. Accordingly, the Office of Management and Budget (OMB) has not reviewed it under that Order. It is also not significant within the meaning of DOT regulatory policies and procedures (DOT Order 2100.5 dated May 22, 1980 (44 FR 11034, Feb. 26, 1979).
The Medical Examiner's Certification Integration Final Rule, published April 23, 2015 (80 FR 22790), amended the FMCSRs to establish a streamlined process for SDLAs to receive CMV driver physical examination results from the MEs, via the National Registry. The 2015 final rule estimated that the National Registry would be able to receive and transmit this information on a daily basis by June 22, 2018, and established compliance dates for MEs, motor carriers, FMCSA, and the States accordingly. This rule, effective today, delays until June 22, 2021, the compliance date requiring (1) FMCSA to electronically transmit from the National Registry to the SDLAs driver identification information, examination results, and restriction information from examinations performed for holders of CLPs/CDLs (interstate and intrastate); (2) FMCSA to electronically transmit to the SDLAs medical variance information for all CMV drivers; (3) SDLAs to post driver identification, examination results, and restriction information received electronically from FMCSA; and (4) motor carriers will no longer need to verify that their drivers holding CLPs or CDLs were certified by an ME listed on the National Registry. This action is being taken to ensure that SDLAs have sufficient time to make the necessary IT programming changes. Although this rule impacts the responsibilities of MEs, CMV drivers, motor carriers, SDLAs, and FMCSA, it is not expected to generate any economic costs or benefits.
The 2015 final rule accounted for costs associated with system development and implementation, and benefits associated with streamlined processes and reduced paperwork. These costs and benefits (originally anticipated to be realized on the June 22, 2018, compliance date) will not be realized on June 22, 2018. Therefore, the baseline against which to evaluate the impacts of this interim final rule is that the necessary systems will not be ready on June 22, 2018, and will instead be ready on June 22, 2021. This rule aligns the compliance date with the date when the systems will be ready and thus, when the costs and benefits estimated in the 2015 final rule can be realized. This rule does not result in additional costs or benefits, nor does it inhibit the realization of the costs and benefits identified in the 2015 final rule.
This interim final rule is not an E.O. 13771 regulatory action because this rule is not significant under E.O. 12866.
Under the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612), FMCSA is not required to complete a regulatory flexibility analysis, because, as discussed earlier in the Good Cause Exists section, this action is not subject to notice and comment under section
Act.
In accordance with section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, FMCSA wants to assist small entities in understanding this interim final rule so that they can better evaluate its effects on themselves and participate in the rulemaking initiative. If the interim final rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance; please consult the FMCSA point of contact, Ms. Christine A. Hydock listed in the
Small businesses may send comments on the actions of Federal employees who enforce or otherwise determine compliance with Federal regulations to the Small Business Administration's Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of FMCSA, call 1-888-REG-FAIR (1-888-734-3247). DOT has a policy regarding the rights of small entities to regulatory enforcement fairness and an explicit policy against retaliation for exercising these rights.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. 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 $156 million (which is the value equivalent of $100 million in 1995, adjusted for inflation to 2015 levels) or more in any one year. Though this interim final rule will not result in such an expenditure, the Agency does discuss the effects of this rule elsewhere in this preamble.
This interim final rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for Federalism under section 1(a) of Executive Order 13132 if it has “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” FMCSA has determined that this interim final rule would not have substantial direct costs on or for States, nor would it limit the policymaking discretion of States. Nothing in this document preempts any State law or regulation. Therefore, this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Impact Statement.
This interim final rule meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminates ambiguity, and reduce burden.
E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, Apr. 23, 1997), requires agencies issuing “economically significant” rules, if the regulation also concerns an environmental health or safety risk that an agency has reason to believe may disproportionately affect children, to include an evaluation of the regulation's environmental health and safety effects on children. The Agency determined this interim final rule is not economically significant. Therefore, no analysis of the impacts on children is required. In any event, the Agency does not anticipate that this regulatory action could in any respect present an environmental or safety risk that could disproportionately affect children.
FMCSA reviewed this interim final rule in accordance with E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights, and has determined it will not effect a taking of private property or otherwise have taking implications.
Section 522 of title I of division H of the Consolidated Appropriations Act, 2005, enacted December 8, 2004 (Pub. L. 108-447, 118 Stat. 2809, 3268, 5 U.S.C. 552a note), requires the Agency to conduct a privacy impact assessment (PIA) of a regulation that will affect the privacy of individuals. This rule does not require the collection of personally identifiable information (PII). The supporting PIA, available for review in the docket, gives a full and complete explanation of FMCSA practices for protecting PII in general and specifically in relation to this interim final rule.
The Privacy Act (5 U.S.C. 552a) applies only to Federal agencies and any non-Federal agency which receives records contained in a system of records from a Federal agency for use in a matching program.
The E-Government Act of 2002, Public Law 107-347, section 208, 116 Stat. 2899, 2921 (Dec. 17, 2002), requires Federal agencies to conduct a PIA for new or substantially changed technology that collects, maintains, or disseminates information in an identifiable form. No new or substantially changed technology would collect, maintain, or disseminate information because of this rule. As a result, FMCSA has not conducted a privacy impact assessment.
The regulations implementing E.O. 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this program.
FMCSA has analyzed this interim final rule under E.O. 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. The Agency has determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, it does not require a Statement of Energy Effects under E.O. 13211. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under E.O. 13211.
E.O. 13783 directs executive departments and agencies to review existing regulations that potentially burden the development or use of domestically produced energy resources, and to appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources. In accordance with E.O. 13783, DOT prepared and submitted a report to the Director of OMB that provides specific
This interim final rule does not have tribal implications under E.O. 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.
The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through OMB, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards (
FMCSA analyzed this interim final rule for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321
FMCSA also analyzed this rule under section 176(c) of the Clean Air Act, as amended (CAA) (42 U.S.C. 7401
Under E.O. 12898, each Federal agency must identify and address, as appropriate, “disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority populations and low-income populations” in the United States, its possessions, and territories. FMCSA evaluated the environmental justice effects of this interim final rule in accordance with the E.O., and has determined that no environmental justice issue is associated with this interim final rule, nor is there any collective environmental impact that would result from its promulgation.
Administrative practice and procedure, Alcohol abuse, Drug abuse, Highway safety, Motor carriers.
Administrative practice and procedure, Alcohol abuse, Drug abuse, Highway safety, Motor carriers.
Alcohol abuse, Drug abuse, Drug testing, Highway safety, Motor carriers, Reporting and recordkeeping requirements, Safety, Transportation.
In consideration of the foregoing, FMCSA amends 49 CFR chapter III, parts 383, 384, and 391 to read as follows:
49 U.S.C. 521, 31136, 31301
(h) * * *
(1)
(ii) On or after June 22, 2021, a new CLP or CDL applicant who certifies that he/she will operate CMVs in non-excepted, interstate commerce must be medically examined and certified in accordance with 49 CFR 391.43 as medically qualified to operate a CMV by a medical examiner, as defined in 49 CFR 390.5. Upon receiving an electronic copy of the medical examiner's certificate from FMCSA, the State will post a medical qualifications status of “certified” on the CDLIS driver record for the driver;
(3)
(ii) On or after June 22, 2021, in order to maintain a medical certification status of “certified,” a CLP or CDL holder who certifies that he/she will operate CMVs in non-excepted, interstate commerce must continue to be medically examined and certified in accordance with 49 CFR 391.43 as physically qualified to operate a commercial motor vehicle by a medical examiner, as defined in 49 CFR 390.5. FMCSA will provide the State with an electronic copy of the medical examiner's certificate information for all subsequent medical examinations in which the driver has been deemed qualified.
(4) In the event of a conflict between the medical certification information provided electronically by FMCSA and a paper copy of the medical examiner's certificate, the medical certification
(a) * * *
(2) * * *
(vii)(A) Before June 22, 2021, for drivers who certified their type of driving according to § 383.71(b)(1)(i) (non-excepted interstate) and, if the CLP applicant submits a current medical examiner's certificate, date-stamp the medical examiner's certificate, and post all required information from the medical examiner's certificate to the CDLIS driver record in accordance with paragraph (o) of this section.
(B) On or after June 22, 2021, for drivers who certified their type of driving according to § 383.71(b)(1)(i) (non-excepted interstate) and, if FMCSA provides current medical examiner's certificate information electronically, post all required information matching the medical examiner's certificate to the CDLIS driver record in accordance with paragraph (o) of this section.
(b) * * *
(5)(i) Before June 22, 2021, for drivers who certified their type of driving according to § 383.71(b)(1)(i) (non-excepted interstate) and, if the CDL holder submits a current medical examiner's certificate, date-stamp the medical examiner's certificate and post all required information from the medical examiner's certificate to the CDLIS driver record in accordance with paragraph (o) of this section.
(ii) On or after June 22, 2021, for drivers who certified their type of driving according to § 383.71(b)(1)(i) (non-excepted interstate) and, if FMCSA provides current medical examiner's certificate information electronically, post all required information matching the medical examiner's certificate to the CDLIS driver record in accordance with paragraph (o) of this section.
(o) * * *
(1)(i)
(ii)
(2)
(ii) On or after June 22, 2021, the State must, within 10 calendar days of the driver's medical examiner's certificate or medical variance expiring, the medical examiner's certificate becoming invalid, the medical variance being rescinded or the medical examiner's certificate being voided by FMCSA, update the medical certification status of that driver as “not certified.”
(3)
(ii) On or after June 22, 2021, within 1 business day of electronically receiving medical variance information from FMCSA regarding the issuance or renewal of a medical variance for a driver, the State must update the CDLIS driver record to include the medical variance information provided by FMCSA.
(4) * * *
(i) * * *
(A)(
(
(ii)(A) Before June 22, 2021, if a driver fails to provide the State with the certification contained in § 383.71(b)(1), or a current medical examiner's certificate if the driver self-certifies according to § 383.71(b)(1)(i) that he/she is operating in non-excepted interstate commerce as required by § 383.71(h), the State must mark that CDLIS driver record as “not-certified” and initiate a CLP or CDL downgrade following State procedures in accordance with paragraph (o)(4)(i)(B) of this section.
(B) On or after June 22, 2021, if a driver fails to provide the State with the certification contained in § 383.71(b)(1), or, if the driver self-certifies according to § 383.71(b)(1)(i) that he/she is operating in non-excepted interstate commerce as required by § 383.71(h) and the information required by paragraph (o)(2)(ii) of this section is not received and posted, the State must mark that CDLIS driver record as “not-certified” and initiate a CLP or CDL downgrade following State procedures in accordance with paragraph (o)(4)(i)(B) of this section.
(6) In the event of a conflict between the medical certification information provided electronically by FMCSA and a paper copy of the medical examiner's certificate, the medical certification information provided electronically by FMCSA shall control.
49 U.S.C. 31136, 31301,
(i) A State must come into substantial compliance with the requirements of subpart B of this part and part 383 of this chapter in effect as of June 22, 2015, as soon as practical, but, unless otherwise specifically provided in this part, not later than June 22, 2021.
49 U.S.C. 504, 508, 31133, 31136, 31149, and 31502; sec. 4007(b) of Pub. L. 102-240, 105 Stat. 1914, 2152; sec. 114 of Pub. L. 103-311, 108 Stat. 1673, 1677; sec. 215 of Pub. L. 106-159, 113 Stat. 1748, 1767; sec. 32934 of Pub. L. 112-141, 126 Stat. 405, 830; sec. 5524 of Pub. L. 114-94, 129 Stat. 1312, 1560; and 49 CFR 1.87.
(m) * * *
(2) * * *
(i) * * *
(B)(
(C)
(3) * * *
(i) * * *
(B)(
(C) Through June 21, 2021, if the driver provided the motor carrier with a copy of the current medical examiner's certificate that was submitted to the State in accordance with § 383.73(a)(2)(vii) of this chapter, the motor carrier may use a copy of that medical examiner's certificate as proof of the driver's medical certification for up to 15 days after the date it was issued.
(4) In the event of a conflict between the medical certification information provided electronically by FMCSA and a paper copy of the medical examiner's certificate, the medical certification information provided electronically by FMCSA shall control.
(a) * * *
(2) * * *
(i)(A) Beginning on January 30, 2015 and through June 21, 2021, a driver required to have a commercial driver's license under part 383 of this chapter, and who submitted a current medical examiner's certificate to the State in accordance with 49 CFR 383.71(h) documenting that he or she meets the physical qualification requirements of this part, no longer needs to carry on his or her person the medical examiner's certificate specified at § 391.43(h), or a copy, for more than 15 days after the date it was issued as valid proof of medical certification.
(B) On or after June 22, 2021, a driver required to have a commercial driver's license or a commercial learner's permit under 49 CFR part 383, and who has a current medical examiner's certificate documenting that he or she meets the physical qualification requirements of this part, no longer needs to carry on his or her person the medical examiner's certificate specified at § 391.43(h).
(ii) Beginning on July 8, 2015, and through June 21, 2021, a driver required to have a commercial learner's permit under part 383 of this chapter, and who submitted a current medical examiner's certificate to the State in accordance with § 383.71(h) of this chapter documenting that he or she meets the physical qualification requirements of this part, no longer needs to carry on his or her person the medical examiner's certificate specified at § 391.43(h), or a copy for more than 15 days after the date it was issued as valid proof of medical certification.
(iv) In the event of a conflict between the medical certification information provided electronically by FMCSA and a paper copy of the medical examiner's certificate, the medical certification information provided electronically by FMCSA shall control.
(g) * * *
(2)(i) Before June 22, 2021, if the medical examiner finds that the person examined is physically qualified to operate a commercial motor vehicle in accordance with § 391.41(b), he or she must complete a certificate in the form prescribed in paragraph (h) of this section and furnish the original to the person who was examined. The examiner must provide a copy to a prospective or current employing motor carrier who requests it.
(ii) On or after June 22, 2021, if the medical examiner identifies that the person examined will not be operating a commercial motor vehicle that requires a commercial driver's license or a commercial learner's permit and finds that the driver is physically qualified to operate a commercial motor vehicle in accordance with § 391.41(b), he or she must complete a certificate in the form prescribed in paragraph (h) of this section and furnish the original to the person who was examined. The examiner must provide a copy to a prospective or current employing motor carrier who requests it.
(3) On or after June 22, 2021, if the medical examiner finds that the person examined is not physically qualified to operate a commercial motor vehicle in accordance with § 391.41(b), he or she must inform the person examined that he or she is not physically qualified, and that this information will be reported to FMCSA. All medical examiner's certificates previously issued to the person are not valid and no longer satisfy the requirements of § 391.41(a).
(d) On or after June 22, 2021, any person found by a medical examiner not to be physically qualified to operate a commercial motor vehicle under the provisions of paragraph (g)(3) of § 391.43.
(b) * * *
(7) * * *
(ii)
(9) * * *
(ii) Through June 21, 2021, for drivers required to have a CDL, a note relating to verification of medical examiner listing on the National Registry of Certified Medical Examiners required by § 391.23(m)(2).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
This final rule implements annual harvest specifications and management measures to establish allowable catch levels for Pacific mackerel for the fishing years 2017-2018 and 2018-2019. The harvest guideline (HG) and annual catch target (ACT) for the 2017-2018 fishing year are 26,293 metric tons (mt) and 25,293 mt, respectively. The HG and ACT for the 2018-2019 fishing year are 23,840 mt and 22,840 mt, respectively. The ACT serves as the primary directed commercial harvest quotas. If the fishery attains the ACT in either fishing year, the directed fishery will close, reserving the difference between the HG and ACT as a 1,000 mt set-aside for incidental landings in other fisheries. If the HG is reached, all retention would be prohibited through the end of the fishing year. This rule is intended to conserve and manage the Pacific mackerel stock off the U.S. West Coast.
Effective July 23, 2018 through June 30, 2019.
Copies of the report, “Pacific Mackerel Biomass Projection Estimate for USA Management in 2017-2018 and 2018-2019” may be obtained from the West Coast Regional Office, 501 W Ocean Blvd., Ste. 4200, Long Beach, CA 90802-4250.
Joshua Lindsay, West Coast Region, NMFS, (562) 980-4034.
Under the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), 16 U.S.C. 1801
The purpose of this final rule is to implement these harvest specifications, which include allowable harvest levels (ACT, HG, annual catch limit (ACL)), as well as annual catch reference points (OFL and ABC) that take into consideration uncertainty surrounding the current biomass estimates for Pacific mackerel for the 2017-2018 and 2018-2019 fishing years. As described above, the Pacific mackerel HG control rule is the primary mechanism for setting the annual commercial fishery quota, however the Council recommended, and NMFS is implementing, ACTs under the HG that will trigger a closure of directed commercial fishing for Pacific mackerel and incidental harvest provisions. The reason for instituting an ACT and closing directed fishing at the ACT instead of all commercial catch at the HG, is that Pacific mackerel commonly school with other CPS; the 1,000 mt buffer between the ACT and HG would allow for the continued prosecution of these other important CPS fisheries after the ACT for Pacific mackerel is attained. The OFL is the catch level above which overfishing would be occurring and the ABC is set below the OFL to account for scientific uncertainty in the OFL. The ACL can be set equal to or less than the ABC if necessary to ensure overfishing does not occur and serves as the basis to invoke management controls that can prevent the ACL from being exceeded and to correct or mitigate overages of the ACL if they occur, and can be set no higher than the ABC.
The Council recommended, and NMFS is implementing, Pacific mackerel harvest specifications and management measures for both the 2017-2018 and 2018-2019 fishing years. For the 2017-2018 Pacific mackerel fishing year these include an OFL of 30,115 mt, an ABC and ACL of 27,510 mt, a HG of 26,293 mt, and an ACT of 25,293 mt. For the 2018-2019 Pacific mackerel fishing year these include an OFL of 27,662 mt, an ABC and ACL of 25,269 mt, a HG of 23,840 mt, and an ACT of 22,840 mt. The Pacific mackerel fishing season runs from July 1 to June 30. These catch specifications are based on the control rules established in the CPS FMP and biomass estimates of 143,403 mt (2017-2018) and 131,724 mt (2018-2019). These biomass estimates are the result of the NMFS Southwest Fishery Science Center's Pacific mackerel stock assessment completed in June 2015, and a subsequent catch-only projection estimate completed in June 2017. The Council's Scientific and Statistical Committee approved the biomass estimates from the assessment and catch-only projection estimate as the best available scientific information for management at its June 2017 meeting (see
Upon the unlikely attainment of the ACT in either fishing year, directed fishing would close, reserving the difference between the HG and ACT (1,000 mt) as a set aside for incidental landings in other fisheries and other sources of mortality. For the remainder of the fishing year, incidental landings would be constrained to a 45-percent incidental catch allowance when Pacific
The NMFS West Coast Regional Administrator will publish a notice in the
On November 28, 2017, a proposed rule was published in the
In the
Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this final rule is consistent with the CPS FMP, other provisions of the Magnuson-Stevens Act, and other applicable law.
This final rule has been determined to be not significant for purposes of Executive Order 12866.
The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification. As a result, a regulatory flexibility analysis was not required and none was prepared.
This action does not contain a collection-of-information requirement for purposes of the Paperwork Reduction Act.
Fisheries, Fishing, Reporting and recordkeeping requirements.
For the reasons set out in the preamble, 50 CFR part 660 is amended as follows:
16 U.S.C. 1801
(p) Retain, possess or land Pacific mackerel after an announcement under § 660.511(j) that the harvest guideline has been taken or is projected to be reached soon.
(i) The following harvest specifications apply for Pacific mackerel:
(1) For the Pacific mackerel fishing season July 1, 2017, through June 30, 2018, the harvest guideline is 26,293 mt and the ACT is 25,293 mt;
(2) For the Pacific mackerel fishing season July 1, 2018, through June 30, 2019, the harvest guideline is 23,840 mt and the ACT is 22,840 mt.
(j) When an ACT in paragraph (i) of this section has been reached or is projected to be reached soon, then for the remainder of the Pacific mackerel fishing season, Pacific mackerel may not be targeted and landings of Pacific mackerel may not exceed 45 percent of landings when Pacific mackerel are landed with other CPS (in other words, no more than 45 percent by weight of the CPS landed per trip may be Pacific mackerel), except that up to 3 mt of Pacific mackerel may be landed without landing any other CPS. When a harvest guideline in paragraph (i) of this section has been reached or is projected to be reached soon, no further retention of Pacific mackerel is allowed through the end of the Pacific mackerel fishing season. The Regional Administer shall announce in the
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard proposes to change the operating schedule that governs the draws of the Union Pacific Railroad bridge, mile 227.0, and the Midsouth Railroad bridge, mile 228.2, across the Red River at Shreveport, LA. This proposed rule would allow the drawbridges to permanently remain in the closed-to-navigation position, no longer opening for vessel traffic. While there is vessel traffic on the waterway, no one has requested that either drawbridge open since 2007. Union Pacific Railroad and Midsouth Railroad, the bridge owners, requested to update the operating schedule accordingly.
Comments and related material must reach the Coast Guard on or before July 23, 2018.
You may submit comments identified by docket number USCG-2017-0911 using Federal eRulemaking Portal at
If you have questions on this proposed rule, call or email Mr. Eric A. Washburn, Bridge Administrator, Western Rivers, U.S. Coast Guard; telephone 314-269-2378, email
The Coast Guard proposes to change the operating schedule that governs the draws of the Union Pacific Railroad bridge, mile 227.0, and the Midsouth Railroad bridge, mile 228.2, across the Red River at Shreveport, LA. The Red River extends approximately 294.0 miles from mile marker 304.0 on the Lower Mississippi River to Shreveport, LA, then through Twelve Mile and Cypress Bayous to its head of navigation near Daingerfield, TX. Regulations for the operation of drawbridges on the Red River are contained in 33 CFR 117.491. The Union Pacific Railroad bridge, mile 227.0, and the Midsouth Railroad bridge, mile 228.2, are currently the only bridges governed by the regulations in 33 CFR 117.491(c), which state that, “the draws of the bridges above mile 105.8 through mile 234.4 shall open on signal if at least 48 hours notice is given.”
Navigation on the Red River in the vicinity of these bridges consists primarily of recreational craft, and commercial use of the waterway is only possible during periods of high water. Moreover, the U.S. Army Corps of Engineers does not maintain any project depth or navigable channel on this reach of the Red River, nor does the U.S. Coast Guard maintain any aids to navigation above mile 211.4. Under 33 CFR 117.491(d), the bridges above mile 234.4 need not open for the passage of vessels. There are no alternate routes for vessels transiting this section of the Red River.
Union Pacific Railroad owns the Union Pacific Railroad bridge, mile 227.0, across the Red River at Shreveport, LA, and has requested that the drawbridge regulation be amended to allow the bridge to remain in the permanently closed position. Union Pacific provided the Coast Guard with bridge logs that indicate that there has been no request for a bridge opening since 2007. In the closed position, the Union Pacific Railroad bridge, mile 227.0, provides 15.1 feet of vertical clearance at mean high water.
Midsouth Railroad owns the Midsouth Railroad bridge, mile 228.2, across the Red River at Shreveport, LA, and has also requested that the drawbridge remain in the permanently closed position. Midsouth Railroad provided the Coast Guard with bridge logs that indicate that there has been no request for a bridge opening since 2007. In the closed position, the Midsouth Railroad bridge, mile 228.2, provides 37.0 feet of vertical clearance at mean high water.
Under 33 CFR 117.39, the District Commander may authorize a drawbridge to remain in the closed to navigation position and be untended when there have been no requests for drawbridge openings for two years. Due to the lack of significant navigation on this portion of the Red River that requires draws to open and the fact that there has been no request to open the draws in over ten years, the Coast Guard believes that this proposed rule is reasonable, and if implemented, should continue to meet the present and future needs of navigation. Based on the records provided by Union Pacific Railroad and Midsouth Railroad, it is expected that the proposed change will have no known impact to navigation or other waterway users. The Coast Guard proposes this rulemaking under authority of 33 U.S.C. 499.
The Coast Guard proposes to amend 33 CFR 117.491(c), which governs the operating schedule of the draws of the Union Pacific Railroad bridge, mile marker (MM) 227.0 and the Midsouth Railroad bridge, MM 228.2, across the Red River at Shreveport, LA. The regulation currently requires the draws of the bridges above mile 105.8 through mile 234.4 to open on signal if at least 48 hours' notice is given. This proposed rule would allow the bridges to remain closed to the passage of vessels. However, pursuant to 33 CFR 117.39, this rulemaking would include a provision that requires the owner or agency controlling the bridge to the draw to full operation within three months if the District Commander provides a notification that needs of navigation require resumed operation of the spans. The regulatory text and changes we are proposing appear at the end of this document.
We developed this proposed rule after considering numerous statutes and Executive Orders related to rulemaking. Below we summarize our analyses based on 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 13771 directs agencies to control regulatory costs through a budgeting process. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB) and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.
This regulatory action determination is based on the fact that these drawbridges do not currently open for the passage of vessels due to the lack of navigation on the river. The last recorded opening of the drawbridges was in 2007. Consultation with the bridge owners indicated that currently no bridge tender positions are assigned to the bridges.
The Regulatory Flexibility Act of 1980 (RFA), 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 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 bridge may be small entities, for the reasons stated in section IV.A. above, this proposed rule would not have a significant economic impact on any vessel owner or operator.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
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 proposed 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
This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under 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 proposed 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 proposed 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 proposed rule has implications for federalism or Indian tribes, please contact the person listed in the
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 proposed rule will not result in such an expenditure, we do discuss the effects of this proposed rule elsewhere in this preamble.
We have analyzed this proposed 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 proposed rule involves changing the operating schedule that governs the draws of two bridges on the Red River near Shreveport, LA to remain permanently closed to navigation. Normally such actions are categorically excluded from further review, under paragraph L49 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A preliminary Record of Environmental Consideration is not required for this proposed rule. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
Documents mentioned in this NPRM as being available in this docket and all public comments, will be in our online docket at
Bridges.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 117 as follows:
33 U.S.C. 499; 33 CFR 1.05-1; Department of Homeland Security Delegation No. 0170.1.
(c) The draws of the bridges above mile 105.8 through mile 234.4 need not open for passage of vessels. The owner or agency controlling the bridge must restore the draw to full operation within three months if notified by the District Commander that the needs of navigation require resumed operation of the spans.
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard proposes to establish a temporary safety zone on the waters of the Beaufort River in Beaufort, SC. The safety zone is needed to ensure safety of life on navigable waters of the United States during the Beaufort Water Festival Air Show. This proposed regulation will prohibit persons and vessels from entering, transiting through, anchoring in, or remaining within the regulated area unless authorized by the Captain of the Port Charleston (COTP) or a designated representative. We invite your comments on this proposed rulemaking.
Comments and related material must be received by the Coast Guard on or before July 23, 2018.
You may submit comments identified by docket number USCG-2018-0463 using the Federal eRulemaking Portal at
If you have questions about this proposed rulemaking, call or email Lieutenant Justin Heck, Sector Charleston Office of Waterways Management, Coast Guard; telephone (843) 740-3184, email
On April 27, 2018, the Coast Guard received a marine event application for the 2018 Beaufort Water Festival Air Show that will take place from 12 p.m. until 5 p.m. on July 21, 2018. The safety zone is necessary to ensure the safety of life on the navigable waters of the United States during the Beaufort Water Festival Air Show. The COTP has determined that potential hazards associated with the airshow would be a safety concern for anyone within the regulated area.
The purpose of this rulemaking is to ensure the safety of vessels and the navigable waters within the regulated area before, during, and after the scheduled event. The Coast Guard proposes this rulemaking under authority in 33 U.S.C. 1231.
The COTP proposes to establish a safety zone from 12 p.m. until 5 p.m. on July 21, 2018. The safety zone would encompass a portion of the waterway that is 700 feet wide by 2600 feet in length on the waters of the Beaufort River in Beaufort, SC. No vessel or person would be permitted to enter, transit through, anchor in, or remain within the safety zone without obtaining permission from the COTP or a designated representative. The Coast Guard would provide notice of the safety zone by Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives. The regulatory text we are proposing appears at the end of this document.
We developed this proposed 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 13771 directs agencies to control regulatory costs through a budgeting process. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.
This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. The safety zone will only be enforced for 5 hours, vessel traffic will be able to safely operate in the surrounding area during the enforcement period, and the rule will allow vessels to seek permission to enter the zone. Moreover, 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 via VHF-FM marine channel 16.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended,
We have considered the impact of this proposed rule on small entities. This rule may affect the following entities, some of which may be small entities: the owner or operators of vessels intending to enter, transit through, anchor in, or remain within the regulated area during the enforcement period. For the reasons stated in section IV.A. above, this proposed rule would not have a significant economic impact on a substantial number of small entities.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
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 proposed 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
This proposed rule would 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 proposed 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 proposed 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 proposed rule has implications for federalism or Indian tribes, please contact the person listed in the
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 proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this proposed 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 proposed rule involves a safety zone lasting 5 hours that would prohibit entry on certain waters of the Beaufort River in Beaufort, SC. Normally such actions are categorically excluded from further review under paragraph L 60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
Documents mentioned in this NPRM as being available in the docket, and all public comments, will be in our online docket at
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5;
(a)
(b)
(c)
(2) Persons and vessels desiring to enter, transit through, anchor in, or remain within the regulated area may contact the COTP 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 regulated area is granted by the COTP or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the COTP or a designated representative.
(3) The Coast Guard will provide notice of the regulated area by Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives.
(d)
U.S. Copyright Office, Library of Congress.
Notice of proposed rulemaking; extension of comment period.
The Copyright Office is extending the deadline for the submission of written comments in response to its May 24, 2018 notice of proposed rulemaking proposing the adoption of a new fee schedule.
The comment period for the notice of proposed rulemaking, published on May 24, 2018 (83 FR 24054), is extended by an additional sixty days. Comments must be made in writing and must be received in the U.S. Copyright Office no later than 11:59 p.m. Eastern Time on September 21, 2018.
For reasons of government efficiency, the Copyright Office is using the
Regan A. Smith, General Counsel and Associate Register of Copyrights, by email at
On May 24, 2018, the U.S. Copyright Office issued a proposed rulemaking recommending the adoption of a new fee schedule for services in the following areas: Registration, recordation, record retrieval, search, and certification, the Licensing Division, and other ancillary services. The proposed fee schedule would assist the Office in recovering a significant part, though not the whole, of its costs.
Environmental Protection Agency.
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve changes to the North Carolina State Implementation Plan (SIP), submitted by the North Carolina Department of Environmental Quality (NC DEQ) through the Division of Air Quality (DAQ), to EPA on October 17, 2017. This SIP submittal modifies North Carolina's Prevention of Significant Deterioration (PSD) regulations and includes the adoption of specific federal provisions needed to meet the New Source Review (NSR) permitting program requirements for the fine particulate matter (PM
Comments must be received on or before July 23, 2018.
Submit your comments, identified by Docket ID No. EPA-R04-OAR-2015-0501 at
Joel Huey of the Air Planning and Implementation Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW, Atlanta, Georgia 30303-8960. Mr. Huey can be reached by telephone at (404) 562-9104 or via electronic mail at
EPA is proposing two actions with regard to North Carolina's SIP submittal updating the State's PSD regulations found at 15A North Carolina Administrative Code (NCAC) 02D .0530.
Second, as a result of the proposed approval of North Carolina's October 17, 2017, SIP submittal for these PSD requirements, EPA is proposing to approve this submittal for portions of the infrastructure SIP PSD elements for the following NAAQS: 1997 Annual and 24-hour PM
As described in EPA's May 10, 2016 (81 FR 28801), proposal action to partially approve and partially disapprove revisions to North Carolina's SIP with regard to the State's NSR permitting regulations for PM
The CAA requires EPA to set air quality standards to protect both public health and the public welfare (
Since July 1, 1987, EPA had used PM
As established in part C of title I of the CAA, EPA's PSD program protects public health and welfare from adverse effects of air pollution by ensuring that construction of new major sources or modifications in attainment or unclassifiable areas does not lead to significant deterioration of air quality while simultaneously ensuring that economic growth will occur in a manner consistent with preservation of clean air resources. Under section 165(a)(3) of the CAA, a PSD permit applicant must demonstrate that emissions from the proposed construction and operation of a facility “will not cause, or contribute to, air pollution in excess of any maximum allowable increase or allowable concentration for any pollutant.” In other words, when a source applies for a permit to emit a regulated air pollutant in an area that is designated as attainment or unclassifiable for a NAAQS, the state and EPA must determine if the source's emissions of that pollutant will cause significant deterioration in air quality. Significant deterioration occurs when the amount of the new pollution exceeds the applicable PSD increment, which is the “maximum allowable increase” of an air pollutant allowed to occur above the applicable baseline concentration
EPA finalized the 2010 PSD PM
For purposes of calculating increment consumption, a baseline area for a particular pollutant includes the attainment or unclassifiable area in which the source is located and any other attainment or unclassifiable area in which the source's emissions of that pollutant are projected (by air quality modeling) to result in a significant ambient pollutant increase.
In general, the submittal date of the first complete PSD permit application in a particular area is the operative “baseline date,” after which new sources must evaluate increment consumption.
In practice, three dates related to the PSD baseline concept are important in understanding how to calculate the amount of increment consumed—(1) trigger date; (2) major source baseline date; and (3) minor source baseline date. The trigger date, as the name implies, is a fixed date that initiates the overall increment consumption process nationwide.
Once the minor source baseline date is established, the ambient pollutant concentration level increase caused by a proposed emission increase from the major source submitting the first PSD application consumes a portion of the increment in that area, as do any subsequent ambient concentration level increases caused by actual emission increases that occur from any new or existing source in the area. When the maximum pollutant concentration increase defined by the increment has been reached, additional PSD permits cannot be issued until sufficient amounts of the affected increment are “freed up” via emission reductions of the pollutant that may occur voluntarily (
In the 2010 PSD PM
On May 16, 2008 (73 FR 28321), EPA finalized the “Implementation of the New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM
By statute, states are required to have SIPs that provide for the implementation, maintenance, and enforcement of the NAAQS. States are further required to provide a SIP submittal meeting the applicable requirements of sections 110(a)(1) and (2) within three years after EPA promulgates a new or revised NAAQS.
This action pertains to certain PSD-related infrastructure SIP requirements of section 110(a)(2)(C), 110(a)(2)(D)(i)(II) and 110(a)(2)(J), which are relevant in the context of a state's development of, and EPA's evaluation of, infrastructure SIP submittals. With the exception of these PSD-related requirements of section 110(a)(2) of the CAA, EPA has already approved or will consider in separate actions all other elements of North Carolina's infrastructure SIP submittals related to the 1997 Annual and 24-hour PM
On September 5, 2013, DAQ submitted a SIP revision in response to EPA's 2010 PSD PM
(1) A May 16, 2011, submittal (as revised and updated by the State's September 5, 2013, SIP submittal) as meeting the requirements of EPA's rule, “Implementation of the New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM
(2) Administrative changes to North Carolina's PSD and NNSR regulations at 15A NCAC 02D .0530 and 15A NCAC 02D .0531 provided by the State in a SIP submittal also dated May 16, 2011, including clarification of the applicability of best available control technology (BACT) and lowest achievable emission rate (LAER) for electrical generating units (EGUs) in the State, and the inclusion of an additional Federal Land Manager (FLM) notification provision; and
(3) Portions of the PSD elements of North Carolina's infrastructure SIP submittals for various NAAQS as indicated.
In addition to disapproving the portions of North Carolina's September 5, 2013, SIP submittal pertaining to PM
On October 17, 2017, North Carolina provided a SIP revision to correct the deficiencies EPA had identified in the State's September 5, 2013, SIP submittal related to the adoption of the PM
This incorporation by reference as of July 1, 2014, also captures EPA's October 25, 2012 (77 FR 65107), amendment to the definition of “regulated NSR pollutant” concerning condensable particulate matter. In that action, EPA amended the definition of “regulated NSR pollutant” to remove an inadvertent general requirement of the 2008 NSR PM
North Carolina's October 17, 2017, SIP submittal addresses certain NSR/PSD requirements, as described above, and thereby meets the related infrastructure SIP requirements of section 110(a)(2)(C), 110(a)(2)(D)(i)(II), and 110(a)(2)(J). For the remainder of this proposed rulemaking, EPA's intent in referring to “PSD elements” is to address the PSD requirements in sections 110(a)(2)(C), 110(a)(2)(D)(i)(II), and 110(a)(2)(J). More detail regarding the aforementioned 110(a)(2) requirements related to PSD is provided in the discussion that follows.
Section 110(a)(2)(C) has three components that must be addressed in infrastructure SIP submittals: Enforcement, state-wide regulation of new and modified minor sources and minor modifications of major sources, and PSD permitting of new major sources and major modifications in areas designated attainment or unclassifiable as required by CAA title I part C (
Section 110(a)(2)(D)(i) has two components: 110(a)(2)(D)(i)(I) and 110(a)(2)(D)(i)(II). Each of these components has two subparts resulting in four distinct components, commonly referred to as “prongs,” that must be addressed in infrastructure SIP submittals. The first two prongs, which are codified in section 110(a)(2)(D)(i)(I), are provisions that prohibit any source or other type of emission activity in one state from contributing significantly to nonattainment of the NAAQS in another state (“prong 1”) and from interfering with maintenance of the NAAQS in another state (“prong 2”). The third and fourth prongs, which are codified in section 110(a)(2)(D)(i)(II), are provisions that prohibit emissions activity in one state from interfering with measures required in another state to prevent significant deterioration of air quality (“prong 3”) or to protect visibility (“prong 4”). With regard to section 110(a)(2)(D)(i), this proposed action only addresses North Carolina's infrastructure SIP submittals for prong 3.
Section 110(a)(2)(J) has four components that must be addressed in infrastructure SIP submittals: (1) Consultation with government officials; (2) public notification; (3) PSD; and (4) visibility protection. With regard to section 110(a)(2)(J), this proposed action only addresses North Carolina's infrastructure SIP submittals for PSD.
Regarding the PSD elements of sections 110(a)(2)(C) and (J), EPA interprets the CAA to require each state to make, for each new or revised NAAQS, an infrastructure SIP submittal that demonstrates that the state has a
As described in EPA's guidance dated September 13, 2013,
On September 14, 2016, EPA partially approved and partially disapproved the PSD elements of North Carolina's infrastructure SIP submittals for the following NAAQS: 1997 Annual and 24-hour PM
In this rule, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference North Carolina's regulations 15A NCAC 02D .0530, entitled “Prevention of Significant Deterioration,” effective September 1, 2017. EPA has made, and will continue to make, these documents generally available through
EPA is proposing to approve changes to the North Carolina SIP, provided by the NC DEQ, to EPA on October 17, 2017. These changes modify North Carolina's NSR permitting regulations codified at 15A 02D .0530—
If EPA finalizes all of the actions proposed in this notice, the version of 15A NCAC 02D .0530 (PSD) that became effective in the State on September 1, 2017, will be incorporated into North Carolina's SIP. As a result of the proposed approval of North Carolina's October 17, 2017, SIP submittal, EPA is also proposing to approve portions of the PSD elements of North Carolina's infrastructure SIP submittals (
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations.
• Are not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Are not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;
• Do not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Are certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Do not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Do not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Are not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Are not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Are not subject to requirements of Section 12(d) of the National
• Do not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides.
42 U.S.C. 7401
Environmental Protection Agency (EPA)
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to update a portion of the Outer Continental Shelf (OCS) Air Regulations. Requirements applying to OCS sources located within 25 miles of states' seaward boundaries must be updated periodically to remain consistent with the requirements of the corresponding onshore area (COA), as mandated by section 328(a)(1) of the Clean Air Act (“the Act”). The portion of the OCS air regulations that is being updated pertains to the requirements for OCS sources for which the Santa Barbara County Air Pollution Control District (“Santa Barbara County APCD”) is the designated COA. The intended effect of approving the OCS requirements for the Santa Barbara County APCD is to regulate emissions from OCS sources in accordance with the requirements onshore. The change to the existing requirements discussed below is proposed to be incorporated by reference into the Code of Federal Regulations and listed in the appendix to the OCS air regulations.
Any comments must arrive by July 23, 2018.
Submit your comments, identified by Docket ID No. EPA-R09-OAR-2018-0366 at
Christine Vineyard, Air Division (Air-4), U.S. EPA Region 9, 75 Hawthorne Street, San Francisco, CA 94105, (415) 947-4125,
On September 4, 1992, the EPA promulgated 40 CFR part 55,
Pursuant to § 55.12 of the OCS rule, consistency reviews will occur (1) at least annually; (2) upon receipt of a Notice of Intent under § 55.4; or (3) when a state or local agency submits a rule to the EPA to be considered for incorporation by reference in part 55. This proposed action is being taken in response to the submittal of requirements by the Santa Barbara County APCD. Public comments received in writing within 30 days of publication of this document will be considered by the EPA before publishing a final rule. Section 328(a) of the Act requires that the EPA establish requirements to control air pollution from OCS sources located within 25 miles of states' seaward boundaries that are the same as onshore requirements. To comply with this statutory mandate, the EPA must incorporate applicable onshore rules into part 55 as they exist onshore. This limits the EPA's flexibility in deciding which requirements will be incorporated into part 55 and prevents the EPA from making substantive changes to the requirements it incorporates. As a result, the EPA may be incorporating rules into part 55 that do not conform to all of the EPA's state implementation plan (SIP) guidance or certain requirements of the Act. Consistency updates may result in the inclusion of state or local rules or regulations into part 55, even though the same rules may
The Santa Barbara County APCD submitted the following requirement to update 40 CFR part 55:
An earlier version of this rule is currently implemented on the OCS.
In proposing to update 40 CFR part 55, the EPA reviewed the rule submitted for inclusion in part 55 to ensure that it is rationally related to the attainment or maintenance of federal or state ambient air quality standards or to requirements of part C of title I of the Act, that it is not designed expressly to prevent exploration and development of the OCS and that it is potentially applicable to OCS sources.
After review of the rule against the criteria set forth above and in 40 CFR part 55, the EPA is proposing to make Santa Barbara County APCD Rule 360 applicable to OCS sources. We will accept comments from the public on this proposal until July 23, 2018.
In this document, the EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference the Santa Barbara County APCD rule set forth below. The EPA has made, and will continue to make, these materials available through
Under the Act, the Administrator is required to establish requirements to control air pollution from OCS sources located within 25 miles of states' seaward boundaries that are the same as onshore air pollution control requirements. To comply with this statutory mandate, the EPA must incorporate applicable onshore rules into 40 CFR part 55 as they exist onshore.
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Is not expected to be an Executive Order 13771 regulatory action because this action is not significant under Executive Order 12866;
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Act; and
• Does not provide the EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this rule does have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), 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, nor does it impose substantial direct compliance costs on tribal governments or preempt tribal law.
Under the provisions of the Paperwork Reduction Act, 44 U.S.C 3501
Environmental protection, Administrative practice and procedure, Air pollution control, Hydrocarbons, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Nitrogen oxides, Outer continental shelf, Ozone, Particulate matter, Permits, Reporting and recordkeeping requirements, Sulfur oxides.
For the reasons set out in the preamble, title 40 of the Code of Federal Regulations, part 55, is proposed to be amended as follows:
Section 328 of the Clean Air Act (42 U.S.C. 7401,
(e) * * *
(3) * * *
(ii) * * *
(F)
(b) * * *
(6) The following requirements are contained in
National Marine Fisheries Service (NMFS), National Oceanic and
Notice of availability (NOA); request for comments.
The Gulf of Mexico (Gulf) Fishery Management Council (Gulf Council) and South Atlantic Fishery Management Council (South Atlantic Council) have submitted the Gulf For-hire Reporting Amendment for review, approval, and implementation by NMFS. The Gulf For-hire Reporting Amendment includes amendments to the Fishery Management Plan (FMP) for Reef Fish Resources of the Gulf of Mexico (Reef Fish FMP) and the Coastal Migratory Pelagic (CMP) Resources of the Gulf of Mexico and Atlantic Region (CMP FMP). If approved by the Secretary of Commerce, the Gulf For-hire Reporting Amendment would revise reporting requirements for owners and operators of federally permitted charter vessels and headboats (for-hire vessels). The Gulf For-hire Reporting Amendment would require an owner or operator of a for-hire vessel with a Federal charter vessel/headboat permit for Gulf Reef Fish or Gulf CMP to submit an electronic fishing report for each fishing trip using NMFS-approved hardware and software, before offloading fish from the vessel. The Gulf For-hire Reporting Amendment would also require these owners or operators to notify NMFS prior to departing on any trip. The purpose of the Gulf For-hire Reporting Amendment is to increase and improve fisheries information collected from owners and operators of vessels with a Federal charter vessel/headboat permit for Gulf reef fish or Gulf CMP species. The information is expected to improve recreational fisheries management of the for-hire component in the Gulf.
Written comments on the Gulf For-hire Reporting Amendment must be received by August 20, 2018.
You may submit comments on the Gulf For-hire Reporting Amendment, identified by “NOAA-NMFS-2018-0075,” by either of the following methods:
•
•
Electronic copies of the Gulf For-hire Reporting Amendment may be obtained from
Rich Malinowski, NMFS Southeast Regional Office, telephone: 727-824-5305, or email:
The Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) requires each regional fishery management council to submit any fishery management plan or amendment to NMFS for review and approval, partial approval, or disapproval. The Magnuson-Stevens Act also requires that NMFS, upon receiving an FMP or amendment, publish an announcement in the
The FMPs being revised by the Gulf For-hire Reporting Amendment were prepared by the Gulf Council and the South Atlantic Council, and the Gulf For-hire Reporting Amendment, if approved, would be implemented by NMFS through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Act.
The Magnuson-Stevens Act requires that NMFS and regional fishery management councils prevent overfishing and achieve, on a continuing basis, the optimum yield from federally managed fish stocks. These mandates are intended to ensure that fishery resources are managed for the greatest overall benefit to the nation, particularly with respect to providing food production and recreational opportunities, and protecting marine ecosystems. To further this goal, the Magnuson-Stevens Act states that the collection of reliable data is essential to the effective conservation, management, and scientific understanding of the nation's fishery resources.
In 2014, NMFS implemented management measures contained in a framework action to the Reef Fish FMP and the CMP FMP (Headboat Reporting Framework), which modified recordkeeping and reporting provisions for an owner or operator of a headboat that has been issued a charter vessel/headboat permit for Gulf reef fish or Gulf CMP species (79 FR 6097, February 3, 2014). If selected by NMFS to participate in the Southeast Region Headboat Survey (SRHS), a headboat owner or operator must submit an electronic fishing report weekly, or at shorter intervals if notified by the Science and Research Director (SRD) of NMFS' Southeast Fisheries Science Center (SEFSC). Currently, the selected headboat owners or operators must submit an electronic fishing report to NMFS via the internet by the Sunday following the end of each reporting week, which runs from Monday through Sunday; in other words, reports are due within 7 days after a reporting week ends. If the reports are not submitted on time, the owner or operator of the vessel is prohibited from harvesting or possessing the applicable species until any delinquent electronic fishing reports are submitted to NMFS. The purpose of the Headboat Reporting Framework was to obtain more timely fishing information from headboats to better monitor recreational annual catch limits (ACLs), improve stock assessments, and improve compliance with reporting in Gulf recreational fisheries.
Currently, landings and discards from federally permitted charter vessels in the Gulf reef fish and CMP fisheries are monitored through the survey of charter vessels by the Marine Recreational Information Program (MRIP). As of January 1, 2018, fishing effort is calculated based on a sample of federally permitted charter vessels through a mail survey. Catch rate observations and catch sampling are provided through dockside monitoring, also conducted by MRIP. This MRIP charter vessel information is then available in 2-month increments known as waves, so that there are six waves during the calendar year,
The Gulf For-hire Reporting Amendment modifies the reporting requirements for both charter vessels and headboats. Owners or operators of
If NMFS implements the electronic reporting requirements described in the Gulf For-hire Reporting Amendment, the MRIP survey of charter vessels would continue until the proposed electronic reporting program described in the amendment is certified by NMFS, and then the electronic reporting program could replace the MRIP survey of charter vessels.
Accurate and reliable fisheries information about catch, effort, and discards is critical to stock assessment and management evaluations. In addition, catch from federally permitted for-hire vessels may represent a substantial portion of the total recreational catch for Gulf Council managed fish species, such as red snapper, gray triggerfish, greater amberjack, and mutton snapper. The Gulf Council has determined that electronic reporting on a per trip basis for federally permitted for-hire vessels could provide more timely information than the current MRIP survey and SRHS, and more accurate and reliable information for many species with low catches, low ACLs, or for species that are only rarely encountered by fishery participants. The Gulf Council expects electronic reporting on a per trip basis by owners and operators of all federally permitted for-hire vessels to enhance data collection efforts and contribute to better fisheries management by improving the accuracy of the data and allowing for more data-rich stock assessments.
The Gulf For-hire Reporting Amendment includes actions to establish electronic reporting on a per trip basis before offloading fish from federally permitted charter vessels and headboats in the Gulf reef fish and CMP fisheries. The Gulf For-hire Reporting Amendment would also require vessel owners or operators to submit fishing reports via NMFS-approved hardware and software with global positioning system (GPS) capabilities that, at a minimum, archive vessel position data during a trip for subsequent transmission to NMFS. Lastly, prior to departing for any trip, the owner or operator of a federally permitted charter vessel or headboat would be required to notify NMFS and declare whether they are departing on a for-hire trip, or on another trip type. If the vessel will be operating as a charter vessel or headboat during the specified trip, the vessel owner or operator must also report expected return time and landing location.
The Gulf For-hire Reporting Amendment would require an owner or operator of a charter vessel or headboat with a Federal charter vessel/headboat permit for Gulf reef fish or Gulf CMP species, and is operating as a for-hire vessel, to submit an electronic fishing report for each trip before offloading fish from the vessel. The electronic fishing report would include any species that were caught or harvested in or from any area,
If the Gulf For-hire Reporting Amendment is approved and implemented, the owner or operator of a federally permitted for-hire vessel that is on a for-hire trip would be required to submit an electronic fishing report using hardware and software that meets NMFS technical requirements and has been type approved by NMFS. NMFS-approved hardware could include electronic devices such as computers, tablets, smartphones, and vessel monitoring system units that allow for internet access and are capable of operating approved software. NMFS is currently evaluating potential software applications for the electronic for-hire reporting program and is considering the use of existing software applications already being used by partners in the region, including e-trips online ande-trips mobile, which are reporting products developed by the Atlantic Coastal Cooperative Statistics Program. Hardware and software that meet the NMFS type approval would be posted on the NMFS Southeast Region website upon publication of any final rule to implement revisions to the Gulf for-hire electronic reporting program.
NMFS recently published a proposed rule in the
This means that if NMFS implements the measures in the South Atlantic For-hire Reporting Amendment before implementing measures established through the Gulf For-hire Reporting Amendment, for-hire vessels issued the applicable Federal charter vessel/headboat permits in both the Gulf and Atlantic would be required to comply with the Atlantic electronic reporting program until a Gulf electronic reporting program is implemented, even if the for-hire trips only occur in the Gulf. Then, if NMFS subsequently implements the Gulf For-hire Reporting Amendment, fishermen on for-hire vessels issued Gulf for-hire permits would need to comply with the Gulf electronic reporting program requirements.
The Gulf For-hire Reporting Amendment also contains provisions addressing reporting during catastrophic conditions, such as after a hurricane, and delinquent reporting. During NMFS-declared catastrophic conditions, NMFS may accept paper reporting forms, and can modify or waive reporting requirements. Also, a delinquent report would result in a prohibition on the harvest or possession of the applicable species by the for-hire vessel permit holder until all required and delinquent reports have been
The Gulf For-hire Reporting Amendment specifies that a for-hire vessel owner or operator submit fishing reports via NMFS-approved hardware and software with GPS capabilities that, at a minimum, archive vessel position data during a trip for subsequent transmission to NMFS. The location information would be transmitted electronically to NMFS. The GPS portion of the hardware would have to be permanently affixed to the vessel. The purpose of this requirement is verify whether a vessel is at the dock. Therefore, the GPS portion must have uninterrupted power unless the owner or operator applies for and is granted an exemption.
The Gulf For-hire Reporting Amendment would require an owner or operator of a federally permitted charter vessel or headboat to submit a trip notification to NMFS before departing for any trip. The trip notification would include whether the vessel will be departing on a for-hire vessel or as another trip type, such as commercial. If the vessel will be departing on a for-hire trip, the owner or operator must also report the expected trip completion date, time, and landing location. The Gulf Council determined that a trip notification would improve effort estimation for charter vessels and headboats, and the ability of port agents and law enforcement to meet a vessel at end of a trip for biological sampling and landings validation.
A proposed rule that would implement the Gulf For-hire Reporting Amendment is being drafted. In accordance with the Magnuson-Stevens Act, NMFS will evaluate the proposed rule to determine whether it is consistent with the FMPs, the Magnuson-Stevens Act, and other applicable laws. If that determination is affirmative, NMFS will publish the proposed rule in the
The Gulf Council has submitted the Gulf For-hire Reporting Amendment for Secretarial review, approval, and implementation. Comments on the Gulf For-hire Reporting Amendment must be received by August 20, 2018. Comments received will be considered by NMFS in the decision to approve, disapprove, or partially approve the Gulf For-hire Reporting Amendment. Comments received after the comment period will not be considered by NMFS in this decision. All comments received by NMFS on the amendment or the proposed rule during their respective comment periods will be addressed in the final rule.
16 U.S.C. 1801
U.S. Department of Commerce.
Notice of request for public comments and public hearing; extension of comment period.
In response to requests for additional time, the Department of Commerce is extending the comment period for the notice of request for public comments and public hearing that was published in the
The due date for filing comments, for requests to appear at the public hearing, and for submissions of a summary of expected testimony at the public hearing is June 29, 2018.
The due date is July 13, 2018 for rebuttal comments submitted in response to any comments filed on or before June 29, 2018.
The public hearings will be held on July 19 and 20, 2018. The hearings will begin at 8:30 a.m. local time and conclude at 5:00 p.m. local time, each day.
Sahra Park-Su, U.S. Department of Commerce (202) 482-2811. For more information about the section 232 program, including the regulations and the text of previous investigations, see
On May 30, 2018, the Secretary of Commerce (“Secretary”) issued a request for public comment on an investigation under section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862), to determine the effects on the national security of imports of automobiles, including cars, SUVs, vans and light trucks, and automotive parts (83 FR 24735). The Department of Commerce is extending the comment period on the notice published from June 22, 2018 to June 29, 2018. In addition, the Department of Commerce is extending the due date for rebuttal comments submitted in response to any comments filed on or before June 29, 2018 to July 13, 2018. The dates and location for the public hearings as well as other instructions to commenters remain unchanged. The Department believes that a 7-day extension for comments allows adequate additional time for interested persons to submit comments while still allowing this national security investigation to proceed expeditiously.
Pursuant to Section 766.24 of the Export Administration Regulations, 15
On March 17, 2008, Darryl W. Jackson, the then-Assistant Secretary of Commerce for Export Enforcement (“Assistant Secretary”), signed an order denying Mahan Airways' export privileges for a period of 180 days on the ground that issuance of the order was necessary in the public interest to prevent an imminent violation of the Regulations. The order also named as denied persons Blue Airways, of Yerevan, Armenia (“Blue Airways of Armenia”), as well as the “Balli Group Respondents,” namely, Balli Group PLC, Balli Aviation, Balli Holdings, Vahid Alaghband, Hassan Alaghband, Blue Sky One Ltd., Blue Sky Two Ltd., Blue Sky Three Ltd., Blue Sky Four Ltd., Blue Sky Five Ltd., and Blue Sky Six Ltd., all of the United Kingdom. The order was issued
This temporary denial order (“TDO”) was renewed in accordance with Section 766.24(d) of the Regulations.
The September 11, 2009 renewal order continued the denial order as to Mahan Airways, but not as to the Balli Group Respondents or Blue Airways of Armenia.
As part of the August 24, 2011 renewal, Kerman Aviation, Sirjanco Trading LLC, and Ali Eslamian were added as related persons. Mahan Air General Trading LLC, Equipco (UK) Ltd., and Skyco (UK) Ltd. were added as related persons by a modification order issued on April 9, 2012. Mehdi Bahrami was added as a related person as part of the February 4, 2013 renewal order.
On May 21, 2015, a modification order issued adding Al Naser Airlines, Ali Abdullah Alhay, and Bahar Safwa General Trading as respondents. As detailed in that order and discussed further
Sky Blue Bird Group and its chief executive officer, Issam Shammout, were added as related persons as part of the July 13, 2015 renewal order.
The December 20, 2017 renewal order continued the denial of the export privileges of Mahan Airways, Pejman Mahmood Kosarayanifard, Mahmoud Amini, Kerman Aviation, Sirjanco Trading LLC, Mahan Air General
On May 25, 2018, BIS, through OEE, submitted a written request for renewal of the TDO that issued on December 20, 2017. The written request was made more than 20 days before the TDO's scheduled expiration. Notice of the renewal request was provided to Mahan Airways, Al Naser Airlines, Ali Abdullah Alhay, and Bahar Safwa General Trading in accordance with Sections 766.5 and 766.24(d) of the Regulations. No opposition to the renewal of the TDO has been received. Furthermore, no appeal of the related person determinations made as part of the September 3, 2010, February 25, 2011, August 24, 2011, April 9, 2012, February 4, 2013, and July 13, 2015 renewal or modification orders has been made by Kosarian Fard, Mahmoud Amini, Kerman Aviation, Sirjanco Trading LLC, Mahan Air General Trading LLC, Mehdi Bahrami, Sky Blue Bird Group, or Issam Shammout.
Pursuant to Section 766.24, BIS may issue or renew an order temporarily denying a respondent's export privileges upon a showing that the order is necessary in the public interest to prevent an “imminent violation” of the Regulations. 15 CFR 766.24(b)(1) and 766.24(d). “A violation may be `imminent' either in time or degree of likelihood.” 15 CFR 766.24(b)(3). BIS may show “either that a violation is about to occur, or that the general circumstances of the matter under investigation or case under criminal or administrative charges demonstrate a likelihood of future violations.”
OEE's request for renewal is based upon the facts underlying the issuance of the initial TDO, and the renewal and modification orders subsequently issued in this matter, including the May 21, 2015 modification order and the renewal order issued on December 20, 2017, and the evidence developed over the course of this investigation, which indicate a blatant disregard of U.S. export controls and the TDO. The initial TDO was issued as a result of evidence that showed that Mahan Airways and other parties engaged in conduct prohibited by the EAR by knowingly re-exporting to Iran three U.S.-origin aircraft, specifically Boeing 747s (“Aircraft 1-3”), items subject to the EAR and classified under Export Control Classification Number (“ECCN”) 9A991.b, without the required U.S. Government authorization. Further evidence submitted by BIS indicated that Mahan Airways was involved in the attempted re-export of three additional U.S.-origin Boeing 747s (“Aircraft 4-6”) to Iran.
As discussed in the September 17, 2008 renewal order, evidence presented by BIS indicated that Aircraft 1-3 continued to be flown on Mahan Airways' routes after issuance of the TDO, in violation of the Regulations and the TDO itself.
The March 9, 2010 renewal order also noted that a court in the United Kingdom (“U.K.”) had found Mahan Airways in contempt of court on February 1, 2010, for failing to comply with that court's December 21, 2009 and January 12, 2010 orders compelling Mahan Airways to remove the Boeing 747s from Iran and ground them in the Netherlands. Mahan Airways and the Balli Group Respondents had been litigating before the U.K. court concerning ownership and control of Aircraft 1-3. In a letter to the U.K. court dated January 12, 2010, Mahan Airways' Chairman indicated,
The September 3, 2010 renewal order discussed the fact that Mahan Airways' violations of the TDO extended beyond operating U.S.-origin aircraft and attempting to acquire additional U.S.-origin aircraft. In February 2009, while subject to the TDO, Mahan Airways participated in the export of computer motherboards, items subject to the Regulations and designated as EAR99, from the United States to Iran, via the United Arab Emirates (“UAE”), in violation of both the TDO and the Regulations, by transporting and/or forwarding the computer motherboards from the UAE to Iran. Mahan Airways' violations were facilitated by Gatewick LLC, which not only participated in the transaction, but also has stated to BIS that it acted as Mahan Airways' sole booking agent for cargo and freight forwarding services in the UAE.
Moreover, in a January 24, 2011 filing in the U.K. court, Mahan Airways asserted that Aircraft 1-3 were not being used, but stated in pertinent part that the aircraft were being maintained in Iran especially “in an airworthy condition” and that, depending on the outcome of its U.K. court appeal, the aircraft “could immediately go back into service . . . on international routes into and out of Iran.” Mahan Airways' January 24, 2011 submission to U.K. Court of Appeal, at p. 25, ¶¶ 108, 110. This clearly stated intent, both on its own and in conjunction with Mahan Airways' prior misconduct and statements, demonstrated the need to renew the TDO in order to prevent imminent future violations. Two of these three 747s subsequently were removed from Iran and are no longer in Mahan Airways' possession. The third of these 747s, with Manufacturer's Serial Number (“MSN”) 23480 and Iranian tail number EP-MNE, remained
In addition, as first detailed in the July 1, 2011 and August 24, 2011 orders, and discussed in subsequent renewal orders in this matter, Mahan Airways also continued to evade U.S. export control laws by operating two Airbus A310 aircraft, bearing Mahan Airways' livery and logo, on flights into and out of Iran.
The August 2012 renewal order also found that Mahan Airways had acquired another Airbus A310 aircraft subject to the Regulations, with MSN 499 and Iranian tail number EP-VIP, in violation of the TDO and the Regulations.
The February 4, 2013 renewal order laid out further evidence of continued and additional efforts by Mahan Airways and other persons acting in concert with Mahan, including Kral Aviation and another Turkish company, to procure U.S.-origin engines—two GE CF6-50C2 engines, with MSNs 517621 and 517738, respectively—and other aircraft parts in violation of the TDO and the Regulations.
On December 31, 2013, Kral Aviation was added to BIS's Entity List, Supplement No. 4 to Part 744 of the Regulations.
The July 31, 2013 renewal order detailed additional evidence obtained by OEE showing efforts by Mahan Airways to obtain another GE CF6-50C2 aircraft engine (MSN 528350) from the United States via Turkey. Multiple Mahan employees, including Mehdi Bahrami, were involved in or aware of matters related to the engine's arrival in Turkey from the United States, plans to visually inspect the engine, and prepare it for shipment from Turkey.
Mahan Airways sought to obtain this U.S.-origin engine through Pioneer Logistics Havacilik Turizm Yonetim Danismanlik (“Pioneer Logistics”), an aircraft parts supplier located in Turkey, and its director/operator, Gulnihal Yegane, a Turkish national who previously had conducted Mahan related business with Mehdi Bahrami and Ali Eslamian. Moreover, as referenced in the July 31, 2013 renewal order, a sworn affidavit by Kosol Surinanda, also known as Kosol Surinandha, Managing Director of Mahan's General Sales Agent in Thailand, stated that the shares of Pioneer Logistics for which he was the listed owner were “actually the property of and owned by Mahan.” He further stated that he held “legal title to the shares until otherwise required by Mahan” but would “exercise the rights granted to [him] exactly and only as instructed by Mahan and [his] vote and/or decisions [would] only and exclusively reflect the wills and demands of Mahan[.]”
The January 24, 2014 renewal order outlined OEE's continued investigation of Mahan Airways' activities and detailed an attempt by Mahan, which OEE thwarted, to obtain, via an Indonesian aircraft parts supplier, two U.S.-origin Honeywell ALF-502R-5 aircraft engines (MSNs LF5660 and LF5325), items subject to the Regulations, from a U.S. company located in Texas. An invoice of the Indonesian aircraft parts supplier dated March 27, 2013, listed Mahan Airways as the purchaser of the engines and included a Mahan ship-to address. OEE also obtained a Mahan air waybill dated March 12, 2013, listing numerous U.S.-origin aircraft parts subject to the Regulations—including, among other items, a vertical navigation gyroscope, a transmitter, and a power control unit—being transported by Mahan from Turkey to Iran in violation of the TDO.
The July 22, 2014 renewal order discussed open source evidence from the March-June 2014 time period regarding two BAE regional jets, items subject to the Regulations, that were painted in the livery and logo of Mahan Airways and operating under Iranian tail numbers EP-MOK and EP-MOI, respectively.
The January 16, 2015 renewal order detailed evidence of additional attempts by Mahan Airways to acquire items subject the Regulations in further violation of the TDO. Specifically, in March 2014, OEE became aware of an inertial reference unit bearing serial number 1231 (“the IRU”) that had been sent to the United States for repair. The IRU is subject to the Regulations, classified under ECCN 7A103, and controlled for missile technology reasons. Upon closer inspection, it was determined that IRU came from or had been installed on an Airbus A340 aircraft bearing MSN 056. Further investigation revealed that as of approximately February 2014, this aircraft was registered under Iranian tail number EP-MMB and had been painted in the livery and logo of Mahan Airways.
The January 16, 2015 renewal order also described related efforts by the Departments of Justice and Treasury to further thwart Mahan's illicit procurement efforts. Specifically, on August 14, 2014, the United States Attorney's Office for the District of Maryland filed a civil forfeiture complaint for the IRU pursuant to 22 U.S.C. 401(b) that resulted in the court issuing an Order of Forfeiture on December 2, 2014. EP-MMB remains listed as active in Mahan Airways' fleet and has been used on flights into and out of Iran as recently as December 19, 2017
Additionally, on August 29, 2014, OFAC blocked the property and interests in property of Asian Aviation Logistics of Thailand, a Mahan Airways affiliate or front company, pursuant to Executive Order 13224. In doing so, OFAC described Mahan Airways' use of Asian Aviation Logistics to evade sanctions by making payments on behalf of Mahan for the purchase of engines and other equipment.
The May 21, 2015 modification order detailed the acquisition of two aircraft, specifically an Airbus A340 bearing MSN 164 and an Airbus A321 bearing MSN 550, that were purchased by Al Naser Airlines in late 2014/early 2015 and were under the possession, control, and/or ownership of Mahan Airways.
The May 21, 2015 modification order also laid out evidence showing the respondents' attempts to obtain other controlled aircraft, including aircraft physically located in the United States in similarly-patterned transactions during the same recent time period. Transactional documents involving two Airbus A320s bearing MSNs 82 and 99, respectively, again showed Ali Abdullah Alhay signing sales agreements for Al Naser Airlines.
The July 13, 2015 renewal order outlined evidence showing that Al Naser Airlines' attempts to acquire aircraft on behalf of Mahan Airways extended beyond MSNs 164 and 550 to include a total of nine aircraft.
The January 7, 2016 renewal order discussed evidence that Mahan Airways had begun actively flying EP-MMD on international routes into and out of Iran, including from/to Bangkok, Thailand. Additionally, the January 7, 2016 order described publicly available aviation database and flight tracking information indicating that Mahan Airways continued efforts to acquire Iranian tail
The July 7, 2016 renewal order described Mahan Airways' acquisition of a BAE Avro RJ-85 aircraft (MSN 2392) in violation of the TDO and its subsequent registration under Iranian tail number EP-MOR.
The December 30, 2016 renewal order outlined Mahan's continued operation of multiple Airbus aircraft, including EP-MMD (MSN 164), EP-MMF (MSN 376), and EP-MMH (MSN 391), which were acquired from or through Al Naser Airlines in violation of the TDO, as previously detailed in pertinent part in the July 13, 2015 and January 7, 2016 renewal orders. Publicly available flight tracking information showed that the aircraft were operated on flights into and out of Iran, including from/to Beijing, China, Kuala Lumpur, Malaysia, and Istanbul, Turkey.
The June 27, 2017 order also detailed evidence concerning a suspected planned or attempted diversion to Mahan of an Airbus A340 subject to the Regulations that had first been mentioned in OEE's December 13, 2016 renewal request.
The December 20, 2017 renewal order presented evidence that a Mahan employee attempted to initiate negotiations with a U.S. company for the purchase of an aircraft subject to the Regulations and classified under ECCN 9A610. Moreover, the order highlighted Al Naser Airlines' acquisition, via lease, of at least possession and/or control of a Boeing 737 (MSN 25361), bearing tail number YR-SEB, and an Airbus A320 (MSN 357), bearing tail number YR-SEA, from a Romanian company in violation of the TDO.
Finally, the order also included evidence indicating that Mahan Airways was continuing to operate a number of aircraft subject to the Regulations, including aircraft originally procured from or through Al Naser Airlines, on flights into and out of Iran from/to Lahore, Pakistan, Shanghai, China, Ankara, Turkey, Kabul, Afghanistan, and Baghdad, Iraq, in violation of the TDO.
OEE's May 25, 2018 renewal request includes evidence showing that Mahan continues to operate a number of aircraft subject to the EAR, including, but not limited to EP- MMF, EP-MMH, and EP-MME, on international flights into and out of Iran from/to Beijing, China, Dubai, United Arab Emirates, and Istanbul, Turkey.
Also, on May 24, 2018, OFAC designated a number of Mahan related entities and individuals, including, but not limited to, Otik Aviation of Turkey as Specially Designated Global Terrorists, pursuant to Executive Order 13224 for providing material support to Mahan as recently at 2017.
Lastly, OEE's renewal request also cites the April 2018 arrest and arraignment of a U.S. citizen on a three-count criminal information for unlicensed exports of U.S-origin aircraft parts to Iran valued at over $2 million. The criminal information lists Mahan as one of the defendant's customers.
Under the applicable standard set forth in Section 766.24 of the Regulations and my review of the entire record, I find that the evidence presented by BIS convincingly demonstrates that the denied persons have acted in violation of the Regulations and the TDO; that such violations have been significant, deliberate and covert; and that given the foregoing and the nature of the matters under investigation, there is a likelihood of future violations. Therefore, renewal of the TDO is necessary in the public interest to prevent imminent violation of the Regulations and to give notice to companies and individuals in the United States and abroad that they should continue to cease dealing with Mahan Airways and Al Naser Airlines and the other denied persons in connection with export and reexport transactions involving items subject to the Regulations and in connection with any other activity subject to the Regulations.
A. Applying for, obtaining, or using any license, License Exception, or export control document;
B. Carrying on negotiations concerning, or ordering, buying, receiving, using, selling, delivering, storing, disposing of, forwarding, transporting, financing, or otherwise servicing in any way, any transaction involving any item exported or to be exported from the United States that is subject to the EAR, or in any other activity subject to the EAR; or
C. Benefitting in any way from any transaction involving any item exported or to be exported from the United States that is subject to the EAR, or in any other activity subject to the EAR.
A. Export or reexport to or on behalf of a Denied Person any item subject to the EAR;
B. Take any action that facilitates the acquisition or attempted acquisition by a Denied Person of the ownership, possession, or control of any item subject to the EAR that has been or will be exported from the United States, including financing or other support activities related to a transaction whereby a Denied Person acquires or attempts to acquire such ownership, possession or control;
C. Take any action to acquire from or to facilitate the acquisition or attempted acquisition from a Denied Person of any item subject to the EAR that has been exported from the United States;
D. Obtain from a Denied Person in the United States any item subject to the EAR with knowledge or reason to know that the item will be, or is intended to be, exported from the United States; or
E. Engage in any transaction to service any item subject to the EAR that has been or will be exported from the United States and which is owned, possessed or controlled by a Denied Person, or service any item, of whatever origin, that is owned, possessed or controlled by a Denied Person if such service involves the use of any item subject to the EAR that has been or will be exported from the United States. For purposes of this paragraph, servicing means installation, maintenance, repair, modification or testing.
In accordance with the provisions of Sections 766.24(e) of the EAR, Mahan Airways, Al Naser Airlines, Ali Abdullah Alhay, and/or Bahar Safwa General Trading may, at any time, appeal this Order by filing a full written statement in support of the appeal with the Office of the Administrative Law Judge, U.S. Coast Guard ALJ Docketing Center, 40 South Gay Street, Baltimore, Maryland 21202-4022. In accordance with the provisions of Sections 766.23(c)(2) and 766.24(e)(3) of the EAR, Pejman Mahmood Kosarayanifard, Mahmoud Amini, Kerman Aviation,
In accordance with the provisions of Section 766.24(d) of the EAR, BIS may seek renewal of this Order by filing a written request not later than 20 days before the expiration date. A renewal request may be opposed by Mahan Airways, Al Naser Airlines, Ali Abdullah Alhay, and/or Bahar Safwa General Trading as provided in Section 766.24(d), by filing a written submission with the Assistant Secretary of Commerce for Export Enforcement, which must be received not later than seven days before the expiration date of the Order.
A copy of this Order shall be provided to Mahan Airways, Al Naser Airlines, Ali Abdullah Alhay, and Bahar Safwa General Trading and each related person, and shall be published in the
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public meeting; correction.
NMFS and the Western Pacific Fishery Management Council (Council) have rescheduled a Western Pacific Stock Assessment Review (WPSAR) of a draft 2018 benchmark stock assessment for main Hawaiian Islands Kona crab. The meeting announced in the
See
The location of the meeting has not changed. It will be at the Council office at 1164 Bishop St., Suite 1400, Honolulu, HI 96813.
Michael Seki, Director—NMFS Pacific Islands Fisheries Science Center (PIFSC), telephone: (808) 725-5360.
You may find background information about the stock assessment and WPSAR process, and details of the meeting agenda and special accommodations in the June 5, 2018,
In the
The meeting times and agenda items are not changed.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; Issuance of an Incidental Harassment Authorization.
In accordance with the regulations implementing the Marine Mammal Protection Act (MMPA) as amended, notification is hereby given that NMFS has issued an incidental harassment authorization (IHA) to Deepwater Wind New England, LLC (DWW), for authorization to take marine mammals incidental to marine site characterization surveys off the coast of Rhode Island and Massachusetts in the area of the Commercial Lease of Submerged Lands for Renewable Energy Development on the Outer Continental Shelf (OCS-A 0486) and along potential submarine cable routes to a landfall location in Rhode Island, Massachusetts or New York.
This Authorization is valid for one year from the date of issuance.
Jordan Carduner, Office of Protected Resources, NMFS, (301) 427-8401. Electronic copies of the applications and supporting documents, as well as a list of the references cited in this document, may be obtained by visiting the internet at:
Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth.
NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
The MMPA states that the term “take” means to harass, hunt, capture, or kill,
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as: Any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
On January 3, 2018, NMFS received a request from DWW for an IHA to take marine mammals incidental to marine site characterization surveys off the coast of Massachusetts and Rhode Island in the area of the Commercial Lease of Submerged Lands for Renewable Energy Development on the Outer Continental Shelf (OCS-A 0486) and along potential submarine cable routes to a landfall location in either Rhode Island, Massachusetts or New York. A revised application was received on April 18, 2018. NMFS deemed that request to be adequate and complete. DWW's request is for take of 14 marine mammal species by Level B harassment. Neither DWW nor NMFS expects serious injury or mortality to result from this activity and the activity is expected to last no more than one year, therefore, an IHA is appropriate.
DWW proposes to conduct marine site characterization surveys, including high-resolution geophysical (HRG) and geotechnical surveys, in the area of the Commercial Lease of Submerged Lands for Renewable Energy Development on the Outer Continental Shelf #OCS-A 0486 (Lease Area) and along potential submarine cable routes to landfall locations in either Rhode Island, Massachusetts or Long Island, New York. The purpose of the marine site characterization surveys are to obtain a baseline assessment of seabed/sub-surface soil conditions in the Lease Area and cable route corridors to support the siting of potential future offshore wind projects. Underwater sound resulting from DWW's proposed site characterization surveys has the potential to result in incidental take of marine mammals in the form of behavioral harassment.
DWW's survey activities would occur in the Northwest Atlantic Ocean within Federal waters. Surveys would occur within the Bureau of Ocean Energy Management (BOEM) Rhode Island-Massachusetts Wind Energy Area (RI-MA WEA) which is located east of Long Island, New York and south of Rhode Island and Massachusetts (see Figure 1 in the IHA application). Water depths in the Lease Area range from 26 to 48 meters (m) (85 to 157 feet (ft)). For the purpose of this IHA the Lease Area and submarine cable corridor are collectively termed the Project Area. Surveys would occur from approximately June 15, 2018 through December 31, 2018. The estimated duration of the geophysical survey is expected to be up to 200 days and the estimated duration of the geotechnical survey is expected to be up to 100 days.
Geotechnical surveys would entail the use of core penetration testing, deep boring cores and vibracores. Geotechnical surveys are not expected to result in the take of marine mammals, as described in the
A detailed description of the planned survey activities, including types of survey equipment planned for use, is provided in the
NMFS published a notice of proposed IHA in the
DWW determined the planned duration of the survey based on their data acquisition needs, which are largely driven by the Bureau of Ocean Energy Management's (BOEM) data acquisition requirements prior to required submission of a construction and operations plan (COP). Any effort on the part of NMFS to restrict the months during which the survey could operate would likely have the effect of forcing the applicant to conduct additional months of surveys the following year, resulting in increased costs incurred by the applicant and additional time on the water with associated additional production of underwater noise which could have further potential impacts to marine mammals. Thus the time and area restrictions recommended by the commenters would not be practicable for the applicant to implement and would to some degree offset the benefit of the recommended measure. In addition, our analysis of the potential impacts of the survey on right whales does not indicate that such closures are warranted, as potential impacts to right whales from the survey activities would be limited to short-term behavioral responses; no marine mammal injury is expected as a result of the survey, nor is injury authorized in the IHA. We also note that the majority of the survey is already scheduled to occur outside the time frame recommended for closure by the commenters; the survey is planned to occur from June 15 through December 31, while the commenters recommend a seasonal closure from November 1 through May 14. Thus, in consideration of the limited potential benefits of time and area restrictions, in concert with the impracticability and increased cost on the part of the applicant that would result from such restrictions, NMFS has determined that time and area restrictions are not warranted in this case. Existing mitigation measures, including exclusion zones, ramp-up of survey equipment, and vessel strike avoidance measures, are sufficiently protective to ensure the least practicable adverse impact on species or stocks and their habitat.
However, in recognition of the concerns raised by the commenters, we have added a mitigation requirement to the IHA that shutdown of geophysical survey equipment is required upon
Regarding the commenters' recommendation to require a 500 m EZ for all marine mammals (except dolphins that approach the vessel) we have determined the EZs as currently required in the IHA (described in Mitigation Measures, below) are sufficient to ensure the least practicable adverse impact on species or stocks and their habitat. The EZs would prevent all potential instances of marine mammal injury (though in this instance, injury would not be an expected outcome even in the absence of mitigation due to very small predicted isopleths corresponding to the Level A harassment threshold (Table 5) and would further prevent some instances of behavioral harassment, as well as limiting the intensity and/or duration of behavioral harassment that does occur. As NMFS has determined the EZs currently required in the IHA to be sufficiently protective, we do not think expanded EZs, beyond what is required in the IHA, are warranted.
Sections 3 and 4 of DWW's IHA application summarize available information regarding status and trends, distribution and habitat preferences, and behavior and life history, of the potentially affected species. Additional information regarding population trends and threats may be found in NMFS' Stock Assessment Reports (SAR;
Table 2 lists all species with expected potential for occurrence in the survey area and with the potential to be taken as a result of the proposed survey and summarizes information related to the population or stock, including regulatory status under the MMPA and ESA and potential biological removal (PBR), where known. For taxonomy, we follow Committee on Taxonomy (2017). PBR is defined by the MMPA as the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its optimum sustainable population (as described in NMFS' SARs). While no mortality is anticipated or authorized here, PBR is included here as a gross indicator of the status of the species and other threats.
Marine mammal abundance estimates presented in this document represent the total number of individuals that make up a given stock or the total number estimated within a particular study or survey area. NMFS' stock abundance estimates for most species represent the total estimate of individuals within the geographic area, if known, that comprises that stock. For some species, this geographic area may extend beyond U.S. waters. All managed stocks in this region are assessed in NMFS' U.S. Atlantic SARs (
Four marine mammal species that are listed under the Endangered Species Act (ESA) may be present in the survey area and are included in the take request: The North Atlantic right whale, fin whale, sei whale, and sperm whale.
Though marine mammal species other than those listed in Table 1 are known to occur in the Northwest Atlantic
For the majority of species potentially present in the specific geographic region, NMFS has designated only a single generic stock (
A detailed description of the species and stocks likely to be affected by DWW's survey, including brief introductions to the species and relevant stocks as well as available information regarding population trends and threats, and information regarding local occurrence, were provided in the
Information concerning marine mammal hearing, including marine mammal functional hearing groups, was provided in the
The effects of underwater noise from DWW's geophysical survey activities have the potential to result in behavioral harassment of marine mammals in the vicinity of the survey area. The
This section provides an estimate of the number of incidental takes authorized through the IHA, which will inform both NMFS' consideration of “small numbers” and the negligible impact determination.
Harassment is the only type of take expected to result from these activities. Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
Authorized takes are by Level B harassment, as use of the HRG equipment has the potential to result in disruption of behavioral patterns for individual marine mammals. NMFS has determined take by Level A harassment is not an expected outcome of the proposed activity and thus we do not authorize the take of any marine mammals by Level A harassment. This is discussed in greater detail below. As described previously, no mortality or serious injury is anticipated or authorized for this activity. Below we describe how the take is estimated for this project.
Described in the most basic way, we estimate take by considering: (1) Acoustic thresholds above which NMFS believes the best available science indicates marine mammals will be behaviorally harassed or incur some degree of permanent hearing impairment; (2) the area or volume of water that will be ensonified above these levels in a day; (3) the density or occurrence of marine mammals within these ensonified areas; and, (4) and the number of days of activities. Below, we describe these components in more detail and present the take estimate.
NMFS uses acoustic thresholds that identify the received level of underwater sound above which exposed marine mammals would be reasonably expected to be behaviorally harassed (equated to Level B harassment) or to incur permanent threshold shift (PTS) of some degree (equated to Level A harassment).
These thresholds were developed by compiling and synthesizing the best available science and soliciting input multiple times from both the public and peer reviewers to inform the final product, and are provided in Table 2 below. The references, analysis, and methodology used in the development of the thresholds are described in NMFS 2016 Technical Guidance, which may be accessed at:
Here, we describe operational and environmental parameters of the activity that will feed into estimating the area ensonified above the acoustic thresholds.
The survey would entail the use of HRG survey equipment. The distance to the isopleth corresponding to the threshold for Level B harassment was calculated for all HRG survey equipment with the potential to result in harassment of marine mammals using the spherical transmission loss (TL) equation: TL = 20log
Predicted distances to Level A harassment isopleths, which vary based on marine mammal functional hearing groups (Table 4), were also calculated. The updated acoustic thresholds for impulsive sounds (such as HRG survey equipment) contained in the Technical Guidance (NMFS, 2016) were presented as dual metric acoustic thresholds using both cumulative sound exposure level (SEL
The SEL
Modeling of distances to isopleths corresponding to Level A harassment was performed for all types of HRG equipment planned for use with the potential to result in harassment of marine mammals. Of the HRG equipment types modeled, the AA Dura Spark resulted in the largest distances to isopleths corresponding to Level A harassment for all marine mammal functional hearing groups; therefore, to be conservative, the isopleths modeled for the AA Dura Spark were used to estimate potential Level A take. Based on a conservative assumption that the AA Dura Spark would be operated at 1,000 joules during the survey, a peak source level of 223 dB re 1μPa was used for modeling Level A harassment isopleths based on peak pressure (Crocker & Fratantonio, 2016). Inputs to the NMFS optional User Spreadsheet for the AA Dura Spark are shown in Table 4. Modeled distances to isopleths corresponding to Level A harassment thresholds for the AA Dura Spark are shown in Table 5 (modeled distances to Level A harassment isopleths for all other types of HRG equipment planned for use are shown in Table 6 of the IHA application). As described above, NMFS considers onset of PTS (Level A harassment) to have occurred when either one of the two metrics is exceeded (
Due to the small estimated distances to Level A harassment thresholds for all marine mammal functional hearing groups, based on both SEL
We note that because of some of the assumptions included in the methods used, isopleths produced may be overestimates to some degree. Most of the acoustic sources planned for use in DWW's survey (including the AA Dura Spark) do not radiate sound equally in all directions but were designed instead to focus acoustic energy directly toward the sea floor. Therefore, the acoustic energy produced by these sources is not received equally in all directions around the source but is instead concentrated along some narrower plane depending on the beamwidth of the source. However, the calculated distances to isopleths do not account for this directionality of the sound source and are therefore conservative. Two types of geophysical survey equipment planned for use in the planned survey are omni-directional, however the modeled distances to isopleths corresponding to the Level B harassment threshold for these sources are smaller than that for the Dura Spark, and the Dura Spark was used to conservatively estimate take for the duration of the survey. For mobile sources, such as the planned survey, the User Spreadsheet predicts the closest distance at which a stationary animal would not incur PTS if the sound source traveled by the animal in a straight line at a constant speed.
In this section we provide the information about the presence, density, or group dynamics of marine mammals that will inform the take calculations.
The best available scientific information was considered in calculating marine mammal exposure estimates (the basis for estimating take). For cetacean species, densities calculated by Roberts
For the purposes of the take calculations, density data from Roberts
Systematic, offshore, at-sea survey data for pinnipeds are more limited than those for cetaceans. The best available information concerning pinniped densities in the planned survey area is the U.S. Navy's Operating Area (OPAREA) Density Estimates (NODEs) (DoN, 2007). These density models utilized vessel-based and aerial survey data collected by NMFS from 1998-2005 during broad-scale abundance studies. Modeling methodology is detailed in DoN (2007). For the purposes of the take calculations, NODEs Density Estimates (DoN, 2007) as reported for the summer and fall seasons were used to estimate harbor seal and gray seal densities.
Here we describe how the information provided above is brought together to produce a quantitative take estimate.
In order to estimate the number of marine mammals predicted to be exposed to sound levels that would result in harassment, radial distances to predicted isopleths corresponding to harassment thresholds are calculated, as described above. Those distances are then used to calculate the area(s) around the HRG survey equipment predicted to be ensonified to sound levels that exceed harassment thresholds. The area estimated to be ensonified to relevant thresholds in a single day of the survey is then calculated, based on areas predicted to be ensonified around the HRG survey equipment and the estimated trackline distance traveled per day by the survey vessel. DWW estimates a maximum daily track line distance of 110 km per day during HRG surveys. Based on the maximum estimated distance to the Level B harassment threshold of 447 m (Table 3) and the maximum estimated daily track line distance of 110 km, an area of 98.9 km
The number of marine mammals expected to be incidentally taken per day is then calculated by estimating the number of each species predicted to occur within the daily ensonified area, using estimated marine mammal densities as described above. Estimated numbers of each species taken per day are then multiplied by the number of survey days (
The applicant estimated a total of 11 takes by Level A harassment of harbor porpoises, 5 takes by Level A harassment of harbor seals, and 7 takes by Level A harassment of gray seals would occur, in the absence of mitigation. However, as described above, due to the very small estimated distances to Level A harassment thresholds (Table 5), and in consideration of the mitigation measures, the likelihood of the planned survey resulting in take in the form of Level A harassment is considered so low as to be discountable; therefore, we do not authorize take of any marine mammals by Level A harassment. Although there are no exclusion zones (EZs) required for pinnipeds, the estimated distance to the isopleth corresponding to the Level A harassment threshold for pinnipeds is less than 2 m (Table 6); therefore, we determined the likelihood of an animal being taken within this proximity of the survey equipment to be so low as to be discountable. Authorized take numbers are shown in Table 6.
We note that the IHA authorizes take of Risso's dolphins, though authorization for the take of Risso's dolphins was not proposed in the
In order to issue an IHA under Section 101(a)(5)(D) of the MMPA, NMFS must set forth the permissible methods of taking pursuant to such activity, and other means of effecting the least practicable impact on such species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stock for taking for certain subsistence uses (latter not applicable for this action). NMFS regulations require applicants for incidental take authorizations to include information about the availability and feasibility (economic and technological) of equipment, methods, and manner of conducting such activity or other means of effecting the least practicable adverse impact upon the affected species or stocks and their habitat (50 CFR 216.104(a)(11)).
In evaluating how mitigation may or may not be appropriate to ensure the least practicable adverse impact on species or stocks and their habitat, as well as subsistence uses where applicable, we carefully consider two primary factors:
(1) The manner in which, and the degree to which, the successful implementation of the measure(s) is expected to reduce impacts to marine mammals, marine mammal species or stocks, and their habitat. This considers the nature of the potential adverse impact being mitigated (likelihood, scope, range). It further considers the likelihood that the measure will be effective if implemented (probability of accomplishing the mitigating result if implemented as planned) the likelihood of effective implementation (probability implemented as planned); and
(2) The practicability of the measures for applicant implementation, which may consider such things as relative cost and impact on operations.
Based on the applicant's request, which includes requirements relating to the BOEM lease stipulations associated with ESA-listed marine mammals, and specific information regarding the zones ensonified above NMFS thresholds, NMFS is requiring the following mitigation measures during the marine site characterization surveys.
Marine mammal exclusion zones (EZ) will be established around the HRG survey equipment and monitored by protected species observers (PSO) during HRG surveys as follows:
• 500 m EZ for North Atlantic right whales;
• 200 m EZ for all other ESA-listed cetaceans (including fin whale, sei whale and sperm whale); and
• 25 m EZ for harbor porpoises.
The applicant proposed a 500 m EZ for North Atlantic right whales and 200 m EZ for all other marine mammals; however, for non-ESA-listed marine mammals, based on estimated distances to isopleths corresponding with Level A harassment thresholds (Table 5), we determined EZs for species other than those described above were not warranted. If HRG survey equipment is shut down (as described below) due to
As per the BOEM lease, visual and acoustic monitoring of the established exclusion and monitoring zones will be performed by qualified and NMFS-approved PSOs. It will be the responsibility of the Lead PSO on duty to communicate the presence of marine mammals as well as to communicate the action(s) that are necessary to ensure mitigation and monitoring requirements are implemented as appropriate. PSOs will be equipped with binoculars and would estimate distances to marine mammals located in proximity to the vessel and/or exclusion zone using range finders. Reticulated binoculars will also be available to PSOs for use as appropriate based on conditions and visibility to support the siting and monitoring of marine species. Position data will be recorded using hand-held or vessel GPS units for each sighting. Observations will take place from the highest available vantage point on the survey vessel. During surveys conducted at night, night-vision equipment with infrared light-emitting diodes spotlights and/or infrared video monitoring will be available for PSO use, and passive acoustic monitoring (described below) will be used.
Prior to initiating HRG survey activities, DWW will implement a 30-minute pre-clearance period. During this period, the PSOs will ensure that no North Atlantic right whales are observed within 500 m of geophysical survey equipment, and that no other marine mammal species are observed within 200 m of geophysical survey equipment. Surveys may not begin until these zones have been clear of the relevant marine mammal species for 30 minutes. This pre-clearance requirement would include small delphinoids that approach the vessel (
As proposed by the applicant and required by BOEM lease stipulations, PAM will be used to support monitoring during night time operations to provide for optimal acquisition of species detections at night. The PAM system will consist of an array of hydrophones with both broadband (sampling mid-range frequencies of 2 kHz to 200 kHz) and at least one low-frequency hydrophone (sampling range frequencies of 75 hertz (Hz) to 30 kHz). The PAM operator(s) will monitor acoustic signals in real time both aurally (using headphones) and visually (via sound analysis software). PAM operators will communicate nighttime detections to the lead PSO on duty who will ensure the implementation of the appropriate mitigation measure.
Shutdown of geophysical survey equipment is required upon confirmed PAM detection of a North Atlantic right whale at night, even in the absence of visual confirmation, except in cases where the acoustic detection can be localized and the right whale can be confirmed as being beyond the 500 m EZ; equipment may be re-started no sooner than 30 minutes after the last confirmed acoustic detection. However, aside from the required shutdown for right whales as described above, PAM detection alone would not trigger a requirement for any mitigation action to be taken upon acoustic detection of marine mammals, per BOEM requirements.
As proposed by the applicant, where technically feasible, a ramp-up procedure will be used for geophysical survey equipment capable of adjusting energy levels at the start or re-start of survey activities. The ramp-up procedure will be used at the beginning of HRG survey activities in order to provide additional protection to marine mammals near the survey area by allowing them to detect the presence of the survey and vacate the area prior to the commencement of survey equipment use at full energy. Ramp-up of the survey equipment will not begin until the relevant EZs have been cleared by the PSOs, as described above. Systems will be initiated at their lowest power output and will be incrementally increased to full power. If any marine mammals are detected within the EZ prior to or during the ramp-up, HRG equipment will be shut down (as described below).
If a marine mammal is observed within or approaching the relevant EZ (as described above) an immediate shutdown of the survey equipment is required. Subsequent restart of the survey equipment may only occur after the animal(s) has either been observed exiting the relevant EZ or until an additional time period has elapsed with no further sighting of the animal (
In addition, shutdown of geophysical survey equipment is required upon confirmed PAM detection of a North Atlantic right whale at night, even in the absence of visual confirmation, except in cases where the acoustic detection can be localized and the right whale can be confirmed as being beyond the 500 m EZ; equipment may be re-started no sooner than 30 minutes after the last confirmed acoustic detection.
As required in the BOEM lease, if the HRG equipment shuts down for reasons other than mitigation (
If a species for which authorization has not been granted, or, a species for which authorization has been granted but the authorized number of takes have been met, approaches or is observed within an EZ or within the area encompassing the Level B harassment isopleth (450 m), shutdown will occur.
Vessel strike avoidance measures will include, but are not limited to, the following, as required in the BOEM lease, except under circumstances when complying with these requirements would put the safety of the vessel or crew at risk:
• All vessel operators and crew will maintain vigilant watch for cetaceans
• All survey vessels greater than or equal to 65 ft (19.8 m) in overall length will comply with 10 knot (18.5 km/hr) or less speed restriction in any SMA per the NOAA ship strike reduction rule (73 FR 60173; October 10, 2008);
• All vessel operators will reduce vessel speed to 10 knots (18.5 km/hr) or less when any large whale, any mother/calf pairs, or large assemblages of non-delphinoid cetaceans are observed near (within 100 m (330 ft)) an underway vessel;
• All survey vessels will maintain a separation distance of 500 m (1640 ft) or greater from any sighted North Atlantic right whale;
• If underway, vessels must steer a course away from any sighted North Atlantic right whale at 10 knots (18.5 km/hr) or less until the 500 m (1640 ft) minimum separation distance has been established. If a North Atlantic right whale is sighted in a vessel's path, or within 500 m (330 ft) to an underway vessel, the underway vessel must reduce speed and shift the engine to neutral. Engines will not be engaged until the North Atlantic right whale has moved outside of the vessel's path and beyond 500 m. If stationary, the vessel must not engage engines until the North Atlantic right whale has moved beyond 500 m;
• All vessels will maintain a separation distance of 100 m (330 ft) or greater from any sighted non-delphinoid cetacean. If sighted, the vessel underway must reduce speed and shift the engine to neutral, and must not engage the engines until the non-delphinoid cetacean has moved outside of the vessel's path and beyond 100 m. If a survey vessel is stationary, the vessel will not engage engines until the non-delphinoid cetacean has moved out of the vessel's path and beyond 100 m;
• All vessels will maintain a separation distance of 50 m (164 ft) or greater from any sighted delphinoid cetacean. Any vessel underway remain parallel to a sighted delphinoid cetacean's course whenever possible, and avoid excessive speed or abrupt changes in direction. Any vessel underway reduces vessel speed to 10 knots (18.5 km/hr) or less when pods (including mother/calf pairs) or large assemblages of delphinoid cetaceans are observed. Vessels may not adjust course and speed until the delphinoid cetaceans have moved beyond 50 m and/or the abeam of the underway vessel;
• All vessels will maintain a separation distance of 50 m (164 ft) or greater from any sighted pinniped; and
• All vessels underway will not divert or alter course in order to approach any whale, delphinoid cetacean, or pinniped. Any vessel underway will avoid excessive speed or abrupt changes in direction to avoid injury to the sighted cetacean or pinniped.
DWW will ensure that vessel operators and crew maintain a vigilant watch for cetaceans and pinnipeds by slowing down or stopping the vessel to avoid striking marine mammals. Project-specific training will be conducted for all vessel crew prior to the start of the site characterization survey activities. Confirmation of the training and understanding of the requirements will be documented on a training course log sheet. Signing the log sheet will certify that the crew members understand and will comply with the necessary requirements throughout the survey activities.
The northern section of the survey area partially overlaps with a portion of a North Atlantic right whale SMA which occurs east of Long Island, New York, and south of Massachusetts and Rhode Island. This SMA is active from November 1 through April 30 of each year. Survey vessels that are >65 ft in length would be required to adhere to the mandatory vessel speed restrictions (<10 kn) when operating within the SMA during times when the SMA is active. In addition, between watch shifts, members of the monitoring team would consult NMFS' North Atlantic right whale reporting systems for the presence of North Atlantic right whales throughout survey operations. Members of the monitoring team would monitor the NMFS North Atlantic right whale reporting systems for the establishment of a Dynamic Management Area (DMA). If NMFS should establish a DMA in the survey area, within 24 hours of the establishment of the DMA DWW would coordinate with NMFS to shut down and/or alter the survey activities as needed to avoid right whales to the extent possible.
The mitigation measures are designed to avoid the already low potential for injury in addition to some Level B harassment, and to minimize the potential for vessel strikes. There are no known marine mammal rookeries or mating grounds in the survey area that would otherwise potentially warrant increased mitigation measures for marine mammals or their habitat (or both). The planned survey would occur in an area that has been identified as a biologically important area for migration for North Atlantic right whales. However, given the small spatial extent of the survey area relative to the substantially larger spatial extent of the right whale migratory area, the survey is not expected to appreciably reduce migratory habitat nor to negatively impact the migration of North Atlantic right whales, thus mitigation to address the survey's occurrence in North Atlantic right whale migratory habitat is not warranted. The survey area would partially overlap spatially with a biologically important feeding area for fin whales. However, the fin whale feeding area is sufficiently large (2,933 km
Based on our evaluation of the applicant's proposed measures, NMFS has determined that the mitigation measures provide the means of effecting the least practicable impact on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.
In order to issue an IHA for an activity, Section 101(a)(5)(D) of the MMPA states that NMFS must set forth, requirements pertaining to the monitoring and reporting of such taking. The MMPA implementing regulations at 50 CFR 216.104 (a)(13) indicate that requests for authorizations must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present in the survey area. Effective reporting is critical both to compliance as well as ensuring that the most value is obtained from the required monitoring.
Monitoring and reporting requirements prescribed by NMFS should contribute to improved understanding of one or more of the following:
• Occurrence of marine mammal species or stocks in the area in which take is anticipated (
• Nature, scope, or context of likely marine mammal exposure to potential
• Individual marine mammal responses (behavioral or physiological) to acoustic stressors (acute, chronic, or cumulative), other stressors, or cumulative impacts from multiple stressors;
• How anticipated responses to stressors impact either: (1) Long-term fitness and survival of individual marine mammals; or (2) populations, species, or stocks;
• Effects on marine mammal habitat (
• Mitigation and monitoring effectiveness.
As described above, visual monitoring of the EZs and monitoring zone will be performed by qualified and NMFS-approved PSOs. PSO Qualifications will include completion of a PSO training course and documented field experience conducting similar surveys. As proposed by the applicant and required by BOEM, an observer team comprising a minimum of four NMFS-approved PSOs and a minimum of two certified PAM operator(s), operating in shifts, will be employed by DWW during the planned surveys. PSOs and PAM operators will work in shifts such that no one monitor will work more than 4 consecutive hours without a 2 hour break or longer than 12 hours during any 24 hour period. During daylight hours the PSOs will rotate in shifts of one on and three off, while during nighttime operations PSOs will work in pairs. The PAM operators will also be on call as necessary during daytime operations should visual observations become impaired. Each PSO will monitor 360 degrees of the field of vision.
Also as described above, PSOs will be equipped with binoculars and have the ability to estimate distances to marine mammals located in proximity to the vessel and/or exclusion zone using range finders. Reticulated binoculars will also be available to PSOs for use as appropriate based on conditions and visibility to support the sighting and monitoring of marine species. During night operations, PAM and night-vision equipment with infrared light-emitting diode spotlights and/or infrared video monitoring will be used to increase the ability to detect marine mammals. Position data will be recorded using hand-held or vessel global positioning system (GPS) units for each sighting. Observations will take place from the highest available vantage point on the survey vessel. General 360-degree scanning will occur during the monitoring periods, and target scanning by the PSO will occur when alerted of a marine mammal presence.
Data on all PAM/PSO observations will be recorded, including dates, times, and locations of survey operations; time of observation, location and weather; details of marine mammal sightings (
Within 90 days after completion of survey activities, a final technical report will be provided to NMFS that fully documents the methods and monitoring protocols, summarizes the data recorded during monitoring, summarizes the number of marine mammals estimated to have been taken during survey activities (by species, when known), summarizes the mitigation actions taken during surveys (including what type of mitigation and the species and number of animals that prompted the mitigation action, when known), and provides an interpretation of the results and effectiveness of all mitigation and monitoring. Any recommendations made by NMFS must be addressed in the final report prior to acceptance by NMFS.
In addition to the final technical report, DWW will provide the reports described below as necessary during survey activities. In the unanticipated event that DWW's survey activities lead to an injury (Level A harassment) or mortality (
• Time, date, and location (latitude/longitude) of the incident;
• Name and type of vessel involved;
• Vessel's speed during and leading up to the incident;
• Description of the incident;
• Status of all sound source use in the 24 hours preceding the incident;
• Water depth;
• Environmental conditions (
• Description of all marine mammal observations in the 24 hours preceding the incident;
• Species identification or description of the animal(s) involved;
• Fate of the animal(s); and
• Photographs or video footage of the animal(s) (if equipment is available).
Activities would not resume until NMFS is able to review the circumstances of the event. NMFS would work with DWW to minimize reoccurrence of such an event in the future. DWW would not resume activities until notified by NMFS.
In the event that DWW discovers an injured or dead marine mammal and determines that the cause of the injury or death is unknown and the death is relatively recent (
In the event that DWW discovers an injured or dead marine mammal and determines that the injury or death is not associated with or related to the activities authorized in the IHA (
NMFS has defined negligible impact as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
To avoid repetition, our analysis applies to all the species listed in Table 6, given that NMFS expects the anticipated effects of the planned survey to be similar in nature.
NMFS does not anticipate that injury or mortality would occur as a result of DWW's planned survey, even in the absence of mitigation. Thus the IHA does not authorize any injury or mortality. As discussed in the
We expect that all potential takes would be in the form of short-term Level B behavioral harassment in the form of temporary avoidance of the area or decreased foraging (if such activity were occurring), reactions that are considered to be of low severity and with no lasting biological consequences (
There are no rookeries or mating grounds known to be biologically important to marine mammals within the planned survey area. As described above, the survey area would overlap spatially and temporally with a biologically important feeding area for fin whales. The important fin whale feeding area occurs from March through October and stretches from an area south of Montauk Point to south of Martha's Vineyard. However, the fin whale feeding area is sufficiently large (2,933 km
The survey area is within a biologically important migratory area for North Atlantic right whales (effective March-April and November-December) that extends from Massachusetts to Florida (LaBrecque,
The mitigation measures are expected to reduce the number and/or severity of takes by (1) giving animals the opportunity to move away from the sound source before HRG survey equipment reaches full energy; (2) preventing animals from being exposed to sound levels that may otherwise result in injury. Additional vessel strike avoidance requirements will further mitigate potential impacts to marine mammals during vessel transit to and within the survey area.
NMFS concludes that exposures to marine mammal species and stocks due to DWW's survey would result in only short-term (temporary and short in duration) effects to individuals exposed. Marine mammals may temporarily avoid the immediate area, but are not expected to permanently abandon the area. Major shifts in habitat use, distribution, or foraging success are not expected. NMFS does not anticipate the authorized take estimates to impact annual rates of recruitment or survival.
In summary and as described above, the following factors primarily support our determination that the impacts resulting from this activity are not expected to adversely affect the species or stock through effects on annual rates of recruitment or survival:
• No mortality, serious injury, or Level A harassment is anticipated or authorized;
• The anticipated impacts of the activity on marine mammals would be temporary behavioral changes due to avoidance of the area around the survey vessel;
• The availability of alternate areas of similar habitat value for marine mammals to temporarily vacate the survey area during the planned survey to avoid exposure to sounds from the activity;
• The project area does not contain areas of significance for mating or calving;
• Effects on species that serve as prey species for marine mammals from the survey would be temporary and would not be expected to reduce the availability of prey or to affect marine mammal feeding;
• The mitigation measures, including visual and acoustic monitoring, exclusion zones, and shutdown measures, are expected to minimize potential impacts to marine mammals.
Based on the analysis contained herein of the likely effects of the specified activity on marine mammals
As noted above, only small numbers of incidental take may be authorized under Section 101(a)(5)(D) of the MMPA for specified activities other than military readiness activities. The MMPA does not define small numbers and so, in practice, where estimated numbers are available, NMFS compares the number of individuals taken to the most appropriate estimation of abundance of the relevant species or stock in our determination of whether an authorization is limited to small numbers of marine mammals. Additionally, other qualitative factors may be considered in the analysis, such as the temporal or spatial scale of the activities.
The numbers of marine mammals that we authorize to be taken, for all species and stocks, would be considered small relative to the relevant stocks or populations (less than 11 percent of each species and stock). See Table 6. Based on the analysis contained herein of the proposed activity (including the mitigation and monitoring measures) and the anticipated take of marine mammals, NMFS finds that small numbers of marine mammals will be taken relative to the population size of the affected species or stocks.
There are no relevant subsistence uses of the affected marine mammal stocks or species implicated by this action. Therefore, NMFS has determined that the total taking of affected species or stocks would not have an unmitigable adverse impact on the availability of such species or stocks for taking for subsistence purposes.
Section 7(a)(2) of the Endangered Species Act of 1973 (16 U.S.C. 1531
The NMFS Office of Protected Resources is authorizing the incidental take of four species of marine mammals which are listed under the ESA: The North Atlantic right, fin, sei, and sperm whale. BOEM consulted with NMFS GARFO under section 7 of the ESA on commercial wind lease issuance and site assessment activities on the Atlantic Outer Continental Shelf in Massachusetts, Rhode Island, New York and New Jersey Wind Energy Areas. The NMFS GARFO issued a Biological Opinion concluding that these activities may adversely affect but are not likely to jeopardize the continued existence of the North Atlantic right, fin, and sperm whale. The Biological Opinion can be found online at:
To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321
NMFS has issued an IHA to Deepwater Wind New England, LLC for conducting marine site characterization surveys offshore of Rhode Island and Massachusetts and along potential submarine cable routes, for a period of one year, provided the previously mentioned mitigation, monitoring, and reporting requirements are incorporated.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice.
Per approval of the Secretary of Commerce, The National Marine Fisheries Service (NMFS) announces the availability of the 2018 Revision (NOAA Technical Memorandum NMFS-OPR-59) to its 2016 Technical Guidance for Assessing the Effects of Anthropogenic Sound on Marine Mammal Hearing—Underwater Acoustic Thresholds for Onset of Permanent and Temporary Threshold Shifts (Technical Guidance or Guidance) based on comments received during the review of the Guidance pursuant to section 10 of Presidential Executive Order, Implementing an America-First Offshore Energy Strategy (April 28, 2017).
The 2018 Revision to the Technical Guidance (NOAA Technical Memorandum NMFS-OPR-59) is available in electronic form via the internet at
Amy R. Scholik-Schlomer, Office of Protected Resources, 301-427-8449,
Presidential Executive Order (E.O.) 13795, Implementing an America-First Offshore Energy Strategy (82 FR 20815; April 28, 2017), states in section 2 that “It shall be the policy of the United States to encourage energy exploration and production, including on the Outer Continental Shelf, in order to maintain
Among the requirements of E.O. 13795 is section 10, which called for a review of NMFS' Technical Guidance as follows: “The Secretary of Commerce shall review [NMFS' Technical Guidance] for consistency with the policy set forth in Section 2 of this order and, after consultation with the appropriate Federal agencies, take all steps permitted by law to rescind or revise that guidance, if appropriate.”
The 2016 Technical Guidance referred to in E.O. 13795 is a technical document that compiles, interprets, and synthesizes scientific literature to produce updated received levels, or acoustic thresholds, above which individual marine mammals under NMFS' jurisdiction are predicted to experience changes in their hearing sensitivity (either temporary or permanent) for all underwater human-made sound sources. It is intended for use by NMFS analysts and managers and other relevant user groups and stakeholders, including other Federal agencies, when seeking to determine whether and how their activities are expected to result in hearing impacts to marine mammals via acoustic exposure. The Technical Guidance helps evaluate a proposed activity within a comprehensive effects analysis. It can inform decisions related to mitigation and monitoring requirements, but it does not mandate any specific mitigation. The Technical Guidance does not address or change NMFS' application of standards in the regulatory context, under applicable statutes, and does not create or confer any rights for or on any person, or operate to bind the public (
The Office of Management and Budget previously classified the Technical Guidance as a Highly Influential Scientific Assessment (HISA). As such, the document underwent three independent peer reviews, at three different stages its development, including a follow-up to one of the peer reviews, prior to its dissemination by NMFS in 2016. Details of each peer review are included within the Technical Guidance (Appendix C), and specific peer reviewer comments and NMFS' responses are at
To assist the Secretary of Commerce in the review of the Technical Guidance for consistency with the policy in section 2 of E.O. 13795, NMFS solicited public comment via a 45-day public comment period (82 FR 24950; May 31, 2017). Additionally, on September 25, 2017, NMFS hosted an Interagency Consultation meeting with representatives from the Bureau of Ocean Energy Management (BOEM), Department of State, Federal Highway Administration, Marine Mammal Commission, National Park Service, National Science Foundation, U.S. Air Force, U.S. Army Corps of Engineers, U.S. Geological Survey, and U.S. Navy.
During the public comment period, NMFS received 62 comments from Federal agencies (Bureau of Ocean Energy Management, U.S. Navy, and Marine Mammal Commission), oil and gas industry representatives, Members of Congress, subject matter experts, non-governmental organizations, and members of the public. Most of the comments (85%) recommended no changes to the Technical Guidance. No public commenter suggested rescinding the Technical Guidance. The U.S. Navy, Marine Mammal Commission, Members of Congress, and subject matter experts expressed support for the Technical Guidance's auditory injury thresholds as reflecting the best available science. The remaining comments (15%) focused on additional scientific publications for consideration or recommended revisions to improve implementation of the Technical Guidance.
At the Federal Interagency Consultation meeting, none of the Federal agencies recommended rescinding the Technical Guidance. They expressed support for the Technical Guidance's auditory injury thresholds and the science behind their derivation. Comments received at the meeting focused on improvements to implementation of the Technical Guidance.
During both the public comment period and the Interagency meeting, three key topic areas were raised: (1) The limited scientific data on the impacts of sound on baleen whale hearing; (2) the need to determine accurate sound exposure durations for all species of marine mammals; and (3) the need to improve the Technical Guidance's optional User Spreadsheet tool. Commenters also encouraged the agency to establish working groups to address these data gaps and future needs.
In response to the feedback received during the public comment period and the Interagency meeting, NMFS has improved the Technical Guidance and updated User Spreadsheet tool in several ways. Since none of the public commenters or Federal agencies offered additional scientific data to modify the auditory injury thresholds, including those for baleen whales, no changes are warranted on that topic at this time. Nevertheless, NMFS plans to convene a working group later in 2018 to continue to examine and refine the auditory injury thresholds for baleen whales as more scientific data become available. Also, since none of the public commenters or Federal agencies offered additional scientific data to modify the sound exposure durations for all species of marine mammals, no specific changes are warranted on that topic at this time either. Nevertheless, NMFS plans to convene a working group later in 2018 to evaluate sound exposure durations to determine whether revisions are appropriate for future updates of the Technical Guidance based on any new information.
To help applicants implement the Technical Guidance and optional User Spreadsheet tool, NMFS has: (a) Drafted a new User Manual for the optional User Spreadsheet that provides more detailed instructions and examples on how to use it and plans to submit this User Manual for public comment later in 2018 to gain input from stakeholders and inform future versions of this manual; (b) modified the optional User Spreadsheet to provide additional capabilities to assess auditory injury thresholds; (c) modified the current optional User Spreadsheet tool to facilitate assessing auditory injury thresholds for commonly used sound source; (d) modified the Technical Guidance to be more reflective of an updated international standard specifically developed for underwater acoustics that became available after the documents finalization in 2016; (e) included a summary and preliminary analysis of relevant scientific literature published since the 2016 Technical Guidance's finalization; and (f) updated the Technical Guidance to include the Navy's finalized version of their 2016 Technical Report that was used to derive the Technical Guidance's auditory injury thresholds.
The 2018 Revision to the Technical Guidance (NOAA Technical
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; Issuance of an Incidental Harassment Authorization.
In accordance with the regulations implementing the Marine Mammal Protection Act (MMPA) as amended, notification is hereby given that NMFS has issued an incidental harassment authorization (IHA) to the San Francisco Bay Area Water Emergency Transportation Authority (WETA) to incidentally harass, by Level B harassment only, marine mammals during construction activities associated with the Downtown San Francisco Ferry Terminal Expansion Project, South Basin Improvements Project in San Francisco, California.
This Authorization is effective from June 1, 2018 through May 31, 2019.
Amy Fowler, Office of Protected Resources, NMFS, (301) 427-8401. Electronic copies of the application and supporting documents, as well as a list of the references cited in this document, may be obtained online at:
Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth.
NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
The MMPA states that the term “take” means to harass, hunt, capture, kill or attempt to harass, hunt, capture, or kill any marine mammal.
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321
This action is consistent with categories of activities identified in Categorical Exclusion B4 (incidental harassment authorizations with no anticipated serious injury or mortality) of the Companion Manual for NOAA Administrative Order 216-6A, which do not individually or cumulatively have the potential for significant impacts on the quality of the human environment and for which we have not identified any extraordinary circumstances that would preclude this categorical exclusion. Accordingly, NMFS has determined that the issuance of the IHA qualifies to be categorically excluded from further NEPA review.
On January 22, 2018, NMFS received a request from WETA for an IHA to take marine mammals incidental to expansion and improvements at the downtown San Francisco ferry terminal. The application was determined to be adequate and complete on April 10, 2018. WETA's request was for take of seven species of marine mammals by Level A and Level B harassment. This authorization is valid from June 1, 2018 to May 31, 2019. Neither WETA nor NMFS expect serious injury or mortality to result from this activity and, therefore, an IHA is appropriate.
NMFS previously issued an IHA to WETA for similar work (82 FR 29521; June 29, 2017). WETA complied with all the requirements (
WETA is planning to expand berthing capacity at the Downtown San Francisco Ferry Terminal, located at the San Francisco Ferry Building, to support existing and future planned water transit services operated on San Francisco Bay by WETA and WETA's emergency operations. The Downtown San Francisco Ferry Terminal Expansion Project includes the construction of three new water transit gates and overwater berthing facilities, in addition to supportive landside improvements, such as additional passenger waiting and queueing areas, circulation improvements, and other water transit-related amenities. The new gates and other improvements would be designed to accommodate future planned water transit services between Downtown San Francisco and Antioch, Berkeley, Martinez, Hercules, Redwood City, Richmond, and Treasure Island, as well as emergency operation needs. The new gates will be constructed using 81 steel piles, ranging in diameter from 24 to 36 inches (in). All piles will be driven during the authorized in-water work window of June 1 to November 30, 2018.
A detailed description of the planned terminal expansion project is provided in the
A notice of NMFS's proposal to issue an IHA to WETA was published in the
NMFS will evaluate the appropriateness of using a certain source level reduction factor for sound attenuation device implementation during impact pile driving for all relevant incidental take authorizations when more data become available.
A detailed description of the species likely to be affected by WETA's actions, including brief introductions to the species and relevant stocks as well as available information regarding population trends and threats, and information regarding local occurrence, are provided in WETA's application and the
Table 1 lists all species with expected potential for occurrence near downtown San Francisco and summarizes information related to the population or stock, including regulatory status under the MMPA and ESA and potential biological removal (PBR), where known. For taxonomy, we follow Committee on Taxonomy (2016). PBR is defined by the MMPA as the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its optimum sustainable population (as described in NMFS's Stock Assessment Reports (SARs)). While no mortality is anticipated or authorized here, PBR and annual serious injury and mortality from anthropogenic sources are included here as gross indicators of the status of the species and other threats.
Marine mammal abundance estimates presented in this document represent the total number of individuals that make up a given stock or the total number estimated within a particular study or survey area. NMFS's stock abundance estimates for most species represent the total estimate of individuals within the geographic area, if known, that comprises that stock. For some species, this geographic area may extend beyond U.S. waters. All managed stocks in this region are assessed in NMFS's U.S. 2016 SARs (Caretta
All species that could potentially occur in the project area are included in Table 1. However, the temporal and/or spatial occurrence of humpback whales and Guadalupe fur seals is such that take is not expected to occur, and they are not discussed further beyond the explanation provided here. Humpback whales are rare visitors to the interior of San Francisco Bay. A recent, seasonal influx of humpback whales inside San Francisco Bay near the Golden Gate was recorded from April to November in 2016 and 2017 (Keener 2017). The Golden Gate is outside of this project's action area and humpback whales are not expected to be present during the project. Guadalupe fur seals occasionally range into the waters of Northern California and the Pacific Northwest. The Farallon Islands (off central California) and Channel Islands (off southern California) are used as haulouts during these movements (Simon 2016). Juvenile Guadalupe fur seals occasionally strand in the vicinity of San Francisco, especially during El Niño events. Most strandings along the California coast are animals younger than two years old, with evidence of malnutrition (NMFS 2017c). In the rare event that a Guadalupe fur seal or humpback whale is detected within the Level A or Level B harassment zones, work will cease until the animal has left the area (see “Mitigation”).
Information concerning marine mammal hearing, including marine mammal functional hearing groups, was provided in the
The effects of underwater noise from pile driving activities for the Ferry Terminal Expansion Project have the potential to result in behavioral harassment of marine mammals in the vicinity of the action area. The
The main impact to habitat associated with the Ferry Terminal Expansion Project would be temporarily increased sound levels and the associated direct effects on marine mammals. The project would not result in permanent impacts to habitats used by marine mammals, such as haulout sits, but may have potential short-term impacts to food sources such as fish and minor impacts to the immediate substrate during installation of piles. These potential effects are discussed in detail in the
This section provides an estimate of the number of incidental takes authorized through this IHA, which will inform both NMFS' consideration of “small numbers” and the negligible impact determination.
Harassment is the only type of take expected to result from these activities. Except with respect to certain activities not pertinent here, section 3(18) of the MMPA defines “harassment” as any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
Authorized takes would primarily be by Level B harassment as exposure to acoustic sources (
Below we describe how the take is estimated.
Described in the most basic way, we estimate take by considering: (1) Acoustic thresholds above which NMFS believes the best available science indicates marine mammals will be behaviorally harassed or incur some degree of permanent hearing impairment; (2) the area or volume of water that will be ensonified above these levels in a day; (3) the density or occurrence of marine mammals within these ensonified areas; and, (4) and the number of days of activities. Below, we describe these components in more detail and present the take estimate.
Using the best available science, NMFS has developed acoustic thresholds that identify the received level of underwater sound above which exposed marine mammals would be reasonably expected to be behaviorally harassed (equated to Level B harassment) or to incur permanent threshold shift (PTS) of some degree (equated to Level A harassment).
WETA's activity includes the use of continuous (vibratory pile driving) and impulsive (impact pile driving) sources, and therefore the 120 and 160 dB re 1 μPa (rms) are applicable.
These thresholds are provided in the table below. The references, analysis, and methodology used in the development of the thresholds are described in NMFS 2016 Technical Guidance, which may be accessed at:
Here, we describe operational and environmental parameters of the activity that will feed into identifying the area ensonified above the acoustic thresholds.
Additionally, monitoring conducted during 2017 construction established that for vibratory pile driving in the project area, the transmission loss is greater than the standard value of 15 used in typical take calculations. For estimating take from vibratory pile driving, Level B harassment zones were calculated using the average transmission loss measured during pile driving from June through August of 2017 minus one standard deviation of those measurements (22.26 − 3.51 = 18.75). Additional pile driving in September and November of 2017 yielded a mean transmission loss of 19.0. The F value originally calculated (18.75) is comparable to the final reported average and is slightly more conservative, and was therefore used to calculate the harassment zones from vibratory pile driving. Using the calculated transmission loss model (18.75logR), the in-water Level B harassment zones were determined for each pile size (Table 4). For 24-in steel piles driven with a vibratory hammer, the Level B harassment zone is expected to be 651 m (2,136 ft). For 30-in piles, the Level B harassment zone is expected to be 450 m (1,476 ft). For 36-in piles, the Level B harassment zone is expected to be 940 m (3,084 ft).
Other projects constructed under similar circumstances were reviewed to estimate the approximate noise produced by the 24-, 30, and 36-in steel piles. These projects include the driving of similarly sized piles at the Alameda Bay Ship and Yacht project, the Rodeo Dock Repair project, and the Amorco Wharf Repair Project (Caltrans 2012). Bubble curtains will be used during the installation of these piles, which, based on guidance provided by Caltrans for a mid-sized steel piles (with a diameter greater than 24 but less than 48 in), is expected to reduce noise levels by 7 dB rms (Caltrans 2015a).
Because no impact pile driving was used in the 2017 construction season, no site-specific transmission loss measurements exist for this project. The Practical Spreading Loss Model (15logR) is used to determine the Level B harassment zones for each pile size (Table 4). Both 24- and 30-in steel piles have a SL of 183 dB rms re 1 µPa and therefore have the same Level B harassment zone of 341 m (1,120 ft). For 36-in piles, the Level B harassment zone is expected to be 541 m (1,775 ft).
When NMFS Technical Guidance (2016) was published, in recognition of the fact that ensonified area/volume could be more technically challenging to predict because of the duration component in the new thresholds, we developed a User Spreadsheet that includes tools to help predict a simple isopleth that can be used in conjunction with marine mammal density or occurrence to help predict takes. We note that because of some of the assumptions included in the methods used for these tools, we anticipate that isopleths produced are typically going to be overestimates of some degree, which will result in some degree of overestimate of Level A take. However, these tools offer the best way to predict appropriate isopleths when more sophisticated 3D modeling methods are not available, and NMFS continues to develop ways to quantitatively refine these tools, and will qualitatively address the output where appropriate. For stationary sources (such as impact and vibratory pile driving), NMFS User Spreadsheet predicts the closest distance at which, if a marine mammal remained at that distance the whole duration of the activity, it would not incur PTS. Inputs used in the User Spreadsheet, and the resulting isopleths are reported below.
The resulting PTS isopleths assume an animal would remain stationary at that distance for the duration of the activity. The largest isopleths result from impact pile driving. All piles installed in the 2017 construction season were driven solely using a vibratory hammer indicating that vibratory driving will be the most likely method of installation in the 2018 season. Level A take of harbor seals and California sea lions has been authorized given their increased presence in the nearshore waters of the project site and the large Level A harassment zones, especially for 36-in piles.
In this section we provide the information about the presence, density, or group dynamics of marine mammals that will inform the take calculations.
Caltrans Richmond-San Rafael Bridge project monitors recorded 12 living and two dead gray whales in the surveys performed in 2012. All sightings were in either the Central or North Bay, and all but two sightings occurred during the months of April and May. One gray whale was sighted in June and one in October. The Oceanic Society has tracked gray whale sightings since they began returning to San Francisco Bay regularly in the late 1990s. Most sightings occurred just a mile or two inside of the Golden Gate, with some traveling into San Pablo Bay in the northern part of the San Francisco Bay (Self 2012). The Oceanic Society data show that all age classes of gray whales enter San Francisco Bay and they enter as singles or in groups of up to five individuals (Winning 2008). It is estimated that two to six gray whales enter San Francisco Bay in any given year.
Bottlenose dolphins are most often seen just within the Golden Gate or just east of the bridge when they are present in San Francisco Bay, and their presence may depend on the tides (GGCR 2016). Beginning in the summer of 2015, one to two bottlenose dolphins have been observed frequently swimming in the Oyster Point area of South San Francisco (GGCR 2016, 2017; Perlman 2017). Despite this recent occurrence, this stock is highly transitory in nature and is not expected to spend extended periods of time in San Francisco Bay. However, the number of sightings in the Central Bay has increased, suggesting that bottlenose dolphins are becoming more of a resident species.
In the last six decades, harbor porpoises have been observed outside of San Francisco Bay. The few porpoises that entered were not sighted past the Central Bay close to the Golden Gate Bridge. In recent years, however, there have been increasingly common observations of harbor porpoises in central, North, and South San Francisco Bay. According to observations by the
In San Francisco Bay, sea lions haul out primarily on floating K docks at Pier 39 in the Fisherman's Wharf area of the San Francisco Marine. The Pier 39 haulout is approximately 1.5 miles from the project vicinity. The Marine Mammal Center (TMMC) in Sausalito, California has performed monitoring surveys at this location since 1991. A maximum of 1,706 sea lions was seen hauled out during one survey effort in 2009 (TMMC 2015). Winter numbers are generally over 500 animals (Goals Project 2000). In August to September, counts average from 350 to 850 (NMFS 2004). Of the California sea lions observed, approximately 85 percent were male. No pupping activity has been observed at this site or at other locations in the San Francisco Bay (Caltrans 2012). The California sea lions usually frequent Pier 39 in August after returning from the Channel Islands (Caltrans 2013). In addition to the Pier 39 haulout, California sea lions haul out on buoys and similar structures throughout San Francisco Bay. They are mainly seen swimming off the San Francisco and Marin shorelines within San Francisco Bay, but may occasionally enter the project area to forage.
Juvenile northern fur seals occasionally strand during El Niño events (TMMC 2016). In normal years, TMMC admits about five northern fur seals that strand on the central California coast. During El Niño years, this number dramatically increases. For example, during the 2006 El Niño event, 33 fur seals were admitted. Some of these stranded animals were collected from shorelines in San Francisco Bay (TMMC 2016). The shoreline in the vicinity of the project is developed waterfront, consisting of piers and wharves where northern fur seals are unlikely to strand.
Long-term monitoring studies have been conducted at the largest harbor seal colonies in Point Reyes National Seashore and Golden Gate National Recreation Area since 1976. Castro Rocks and other haulouts in San Francisco Bay are part of the regional survey area for this study and have been included in annual survey efforts. Between 2007 and 2012, the average number of adults observed ranged from 126 to 166 during the breeding season (March through May), and from 92 to 129 during the molting season (June through July) (Truchinski
Yerba Buena Island is the nearest harbor seal haulout site, with as many as 188 individuals observed hauled out. Harbor seals are more likely to be hauled out in the late afternoon and evening, and are more likely to be in the water during the morning and early afternoon. Tidal stage is a major controlling factor of haulout use by harbor seals, with more seals present during low tides than high tide periods (Green
Northern elephant seals are seen frequently on the California coast. Elephant seals aggregate at various sites along the coast to give birth and breed from December through March. Pups remain onshore or in adjacent shallow water through May. Adults make two foraging migrations each year, one after breeding and the second after molting (Stewart and DeLong 1995). Most strandings occur in May as young pups make their first trip out to sea. When those pups return to their rookery sites to molt in late summer and fall, some make brief stops in San Francisco Bay. Approximately 100 juvenile elephant seals strand in San Francisco Bay each year, including individual strandings at Yerba Buena Island and Treasure Island (fewer than 10 strandings per year) (Caltrans 2015b).
Here we describe how the information provided above is brought together to produce a quantitative take estimate.
While impact pile driving may be used during this project, all piles in the previous year of construction were installed completely with vibratory pile driving. Impact driving take calculations are included for informational purposes (Tables 7 and 8). However, only vibratory pile driving take calculations are conservatively used to calculate Level B takes in this IHA as vibratory driving is the most likely method of pile installation and results in greater Level B harassment zones. In the event impact driving does occur, we have authorized small numbers of Level A takes of harbor seals and California sea lions due to the large Level A harassment zones.
Gray whales occasionally enter San Francisco Bay during their northward migration period of February and March. Pile driving will not occur during this time and gray whales are not likely to be present at other times of the year. It is estimated that two to six gray whales enter the Bay in any given year, but they are unlikely to be present during the work period (June 1 through November 30). However, individual gray whales have occasionally been observed in San Francisco Bay during the work period, and therefore it is estimated that, at most, one pair of gray whales may be exposed to Level B harassment during two days of pile driving if they enter the Level B harassment zones (Table 12).
When bottlenose dolphins are present in San Francisco Bay, they are more typically found close to the Golden Gate. Recently, beginning in 2015, two individuals have been observed frequently in the vicinity of Oyster Point (GGCR 2016, 2017; Perlman 2017). The average reported group size for bottlenose dolphins is five. Reports show that a group normally comes into San Francisco Bay and transits past Yerba Buena Island once per week for approximately a two week stint, then leaves (NMFS 2017b). Assuming the dolphins come into San Francisco Bay three times per year, the group of five dolphins would make six passes through the Level B harassment zone for a total of 30 takes (Table 11).
A small but growing population of harbor porpoises uses San Francisco Bay. Porpoises are usually spotted in the vicinity of Angel Island and the Golden
Caltrans has conducted monitoring of marine mammals in the vicinity of the Bay Bridge for 16 years. From those data, Caltrans has produced at-sea density estimates for California sea lions of 0.161 animals per square kilometer (0.42 per square mile) for the summer-late fall season (Caltrans 2016). Marine mammal monitoring observations from the 2017 construction season were used to calculate a project-specific estimate of take per driving day (1.29 animals per day). Observations from marine mammal monitoring in 2017 were assumed to represent the occurrence of California sea lions along the waterfront while the Caltrans density represents the occurrence of California sea lions in open water in the bay. The two numbers were combined to calculate the daily average take over the entire Level B harassment zone (Table 7).
During El Niño conditions, the density of California sea lions in San Francisco Bay may be much greater than the value used above. The likelihood of El Niño conditions occurring in 2018 is currently low, with La Niña conditions expected to develop (NOAA 2018). However, to account for the potential of El Niño developing in 2018, daily take estimated has been increased by a factor of 5 for each pile type (Table 8).
In addition to Level B takes due to vibratory pile driving, NMFS has authorized a small number of Level A takes due to impact pile driving, should impact driving occur. Given the 31 m Level A harassment zone from impact driving of 36-in piles, NMFS has authorized the Level A take of one California sea lion per day of impact driving of 36-in piles (14 days) for a total of 14 Level A takes. WETA will be required to implement a 30 m shutdown zone to minimize Level A takes but this authorization allows for the taking of California sea lions that unexpectedly surface within the Level A zone before a shutdown can be initiated.
The incidence of northern fur seals in San Francisco Bay depends largely on oceanic conditions, with animals more likely to strand during El Niño events. El Niño conditions are unlikely to develop in 2018 (NOAA 2018) but it is anticipated that up to 10 northern fur seals may be in San Francisco Bay and enter the Level B harassment zone (Table 11) (NMFS 2016b).
Caltrans has produced at-sea density estimates for Pacific harbor seals of 3.957 animals per square kilometer (10.25 per square mile) for the fall-winter season (Caltrans 2016). Even though work will predominantly occur during the summer, when at-sea density has been observed to be lower (Caltrans 2016), the higher value of fall-winter density is conservatively used. Additionally, marine mammal monitoring observations from the 2017 construction season were used to calculate a project-specific estimate of take per driving day (3.18 animals per day). Observations from marine mammal monitoring in 2017 were assumed to represent the occurrence of harbor seals along the waterfront while the Caltrans density represents the occurrence of harbor seals in open water in the bay. The two numbers were combined to calculate the daily average take over the entire Level B harassment zone (Table 9). The daily take and days of pile installation were used to calculate total harbor seal Level B takes (Table 10).
In addition to Level B takes due to vibratory pile driving, NMFS has authorized a small number of Level A takes due to impact pile driving, should impact driving occur. Given the large (224-429 m) Level A harassment zones from impact driving, NMFS has authorized the Level A take of three harbor seals per day on half of the planned days of activity (21 days) for a total of 63 Level A takes. WETA will be required to implement a 30 m shutdown zone to minimize Level A takes but this authorization allows for the taking of harbor seals that unexpectedly surface within the Level A zone before a shutdown can be initiated.
Small numbers of elephant seals haul out or strand on Yerba Buena Island and Treasure Island each year. Monitoring of marine mammals in the vicinity of the Bay Bridge has been ongoing for 15 years. From these data, Caltrans has produced an estimated at-sea density for elephant seals of 0.06 animals per square kilometer (0.16 per square mile) (Caltrans 2015b). Most sightings of elephant seals occur in spring or early summer, and are less likely to occur during the period of in-water work for this project. As a result, densities during pile driving would be much lower. It is possible that a lone elephant seal may enter the Level B harassment zone once per week during the 26 week pile driving window (June 1 to November 30) for a total of 26 takes (Table 11).
In order to issue an IHA under Section 101(a)(5)(D) of the MMPA, NMFS must set forth the permissible methods of taking pursuant to such activity, and other means of effecting the least practicable impact on such species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stock for taking for certain subsistence uses (latter not applicable for this action). NMFS regulations require applicants for incidental take authorizations to include information about the availability and feasibility (economic and technological) of equipment, methods, and manner of conducting such activity or other means of effecting the least practicable adverse impact upon the affected species or stocks and their habitat (50 CFR 216.104(a)(11)).
In evaluating how mitigation may or may not be appropriate to ensure the least practicable adverse impact on species or stocks and their habitat, as well as subsistence uses where applicable, we carefully consider two primary factors:
(1) The manner in which, and the degree to which, the successful implementation of the measure(s) is expected to reduce impacts to marine mammals, marine mammal species or stocks, and their habitat. This considers the nature of the potential adverse impact being mitigated (likelihood, scope, range). It further considers the likelihood that the measure will be effective if implemented (probability of accomplishing the mitigating result if implemented as planned) the likelihood of effective implementation (probability implemented as planned) and;
(2) The practicability of the measures for applicant implementation, which may consider such things as cost, impact on operations, and, in the case
A Spill Prevention Control and Countermeasure (SPCC) plan has been prepared to address the emergency cleanup of any hazardous material, and will be available onsite. The SPCC plan incorporates SPCC, hazardous waste, stormwater, and other emergency planning requirements. In addition, the project will comply with the Port's stormwater regulations. Fueling of land and marine-based equipment will be conducted in accordance with procedures outlined in the SPCC. Well-maintained equipment will be used to perform work, and except in the case of a failure or breakdown, equipment maintenance will be performed offsite. Equipment will be inspected daily by the operator for leaks or spills. If leaks or spills are encountered, the source of the leak will be identified, leaked material will be cleaned up, and the cleaning materials will be collected and properly disposed. Fresh cement or concrete will not be allowed to enter San Francisco Bay. All construction materials, wastes, debris, sediment, rubbish, trash, fencing, etc. will be removed from the site once project construction is complete, and transported to an authorized disposal area.
Pre-activity monitoring will take place from 30 minutes prior to initiation of pile driving activity and post-activity monitoring will continue through 30 minutes post-completion of pile driving activity. Pile driving may commence at the end of the 30-minute pre-activity monitoring period, provided observers have determined that the shutdown zone (described below) is clear of marine mammals, which includes delaying start of pile driving activities if a marine mammal is sighted in the zone, as described below. A determination that the shutdown zone is clear must be made during a period of good visibility (
If a marine mammal approaches or enters the shutdown zone during activities or pre-activity monitoring, all pile driving activities at that location shall be halted or delayed, respectively. If pile driving is halted or delayed due to the presence of a marine mammal, the activity may not resume or commence until either the animal has voluntarily left and been visually confirmed beyond the shutdown zone and 15 or 30 minutes (for pinnipeds/small cetaceans or large cetaceans, respectively) have passed without re-detection of the animal. Pile driving activities include the time to install or remove a single pile or series of piles, as long as the time elapsed between uses of the pile driving equipment is no more than thirty minutes.
For all pile driving activities, a minimum of one protected species observed (PSO) will be required, stationed at the active pile driving rig or at the best vantage point(s) practicable to monitor the shutdown zones for marine mammals and implement shutdown or delay procedures when applicable through communication with the equipment operator. Two PSOs will be required on days when impact pile driving occurs.
Monitoring of pile driving will be conducted by qualified PSOs (see below) who will have no other assigned tasks during monitoring periods. WETA will adhere to the following conditions when selecting observers:
• Independent PSOs will be used (
• PSOs must have prior experience working as a marine mammal observer during construction activities; and
• WETA will submit PSO CVs for approval by NMFS.
WETA will ensure that observers have the following additional qualifications:
• Ability to conduct field observations and collect data according to assigned protocols;
• Experience or training in the field identification of marine mammals, including the identification of behaviors;
• Sufficient training, orientation, or experience with the construction operation to provide for personal safety during observations;
• Writing skills sufficient to prepare a report of observations including but not limited to the number and species of marine mammals observed; dates and times when in-water construction activities were conducted; dates, times, and reason for implementation of mitigation (or why mitigation was not implemented when required); and marine mammal behavior; and
• Ability to communicate orally, by radio or in person, with project personnel to provide real-time information on marine mammals observed in the area as necessary.
To prevent Level A take of cetaceans, elephant seals, and Northern fur seals, shutdown zones equivalent to the Level A harassment zones will be established. If the Level A harassment zone is less than 10 m, a minimum 10 m shutdown zone will be enforced. WETA will implement shutdown zones as follows:
If a species for which authorization has not been granted, or a species for which authorization has been granted but the authorized takes are met, is observed approaching or within the Level B harassment zones (Table 4), pile
Piles driven with an impact hammer will employ a “soft start” technique to give fish and marine mammals an opportunity to move out of the area before full-powered impact pile driving begins. This soft start will include an initial set of three strikes from the impact hammer at reduced energy, followed by a 30 second waiting period, then two subsequent three-strike sets. Soft start will be required at the beginning of each day's impact pile driving work and at any time following a cessation of impact pile driving of 30 minutes or longer.
Impact hammers will be cushioned using a 12-in thick wood cushion block. WETA will also employ a bubble curtain during impact pile driving. WETA will implement the following performance standards:
• The bubble curtain must distribute air bubbles around 100 percent of the piling perimeter for the full depth of the water column;
• The lowest bubble ring shall be in contact with the mudline for the full circumference of the ring, and the weights attached to the bottom ring shall ensure 100 percent mudline contact. No parts of the ring or other objects shall prevent full mudline contact; and
• WETA shall require that construction contractors train personnel in the proper balancing of air flow to the bubblers, and shall require that construction contractors submit an inspection/performance report for approval by WETA within 72 hours following the performance test. Corrections to the attenuation device to meet the performance standards shall occur prior to impact driving.
Based on our evaluation of the mitigation measures listed above, NMFS has determined that the mitigation measures provide the means effecting the least practicable impact on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.
In order to issue an IHA for an activity, Section 101(a)(5)(D) of the MMPA states that NMFS must set forth, requirements pertaining to the monitoring and reporting of such taking. The MMPA implementing regulations at 50 CFR 216.104 (a)(13) indicate that requests for authorizations must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present in the action area. Effective reporting is critical both to compliance as well as ensuring that the most value is obtained from the required monitoring.
Monitoring and reporting requirements prescribed by NMFS should contribute to improved understanding of one or more of the following:
• Occurrence of marine mammal species or stocks in the area in which take is anticipated (
• Nature, scope, or context of likely marine mammal exposure to potential stressors/impacts (individual or cumulative, acute or chronic), through better understanding of: (1) Action or environment (
• Individual marine mammal responses (behavioral or physiological) to acoustic stressors (acute, chronic, or cumulative), other stressors, or cumulative impacts from multiple stressors;
• How anticipated responses to stressors impact either: (1) Long-term fitness and survival of individual marine mammals; or (2) populations, species, or stocks;
• Effects on marine mammal habitat (
• Mitigation and monitoring effectiveness.
WETA's monitoring and reporting is also described in their Hydroacoustic Monitoring Plan and Marine Mammal Monitoring Plan, available at
Hydroacoustic monitoring will be conducted in consultation with the California Department of Fish and Wildlife (CDFW) during a minimum of ten percent of all impact pile driving activities. Hydroacoustic monitoring of vibratory pile driving was completed during the 2017 construction season and will not be conducted in 2018. Monitoring of impact pile driving will be done in accordance with the methodology outlined in the Hydroacoustic Monitoring Plan. The monitoring will be conducted to achieve the following:
• Be based on the dual metric criteria (Popper
• Establish field locations that will be used to document the extent of the area experiencing 187 dB SEL accumulated;
• Verify the distance of the Marine Mammal Level A harassment/shutdown zone and Level B harassment zone thresholds;
• Describe the methods necessary to continuously assess underwater noise on a real-time basis, including details on the number, location, distance, and depth of hydrophones and associated monitoring equipment;
• Provide a means of recording the time and number of pile strikes, the peak sound energy per strike, and interval between strikes; and
• Provide provisions to provide all monitoring data to the CDFW and NMFS.
WETA will collect sighting data and behavioral responses to construction for marine mammal species observed in the Level B harassment zones during the period of activity. All PSOs will be trained in marine mammal identification and behaviors and are required to have no other construction-related tasks while conducting monitoring. WETA proposes to use one PSO to monitor the shutdown zones and Level B harassment zones during vibratory pile driving. During impact pile driving, two PSOs will be used. The monitoring zones will be established equivalent to the Level B harassment zones for each pile size and installation method (Table 4). The PSO will monitor the shutdown zones and monitoring zones before, during, and after pile driving. Based on our requirements, WETA will implement the following procedures for pile driving and removal:
• The PSO will be located at the best vantage point in order to properly see the entire shutdown zone and as much of the monitoring zone as possible;
• During all observation periods, the observer will use binoculars and the naked eye to search continuously for marine mammals;
• If the shutdown zones are obscured by fog or poor lighting conditions, pile driving will not be initiated until that zone is visible. Should such conditions arise while pile driving is underway, the activity would be halted; and
• The shutdown and monitoring zones will be monitored for the presence of marine mammals before, during, and after any pile driving activity.
PSOs implementing the monitoring protocol will assess its effectiveness using an adaptive approach. The monitoring biologist will use their best professional judgment throughout implementation and seek improvements to these methods when deemed appropriate. Any modifications to the protocol will be coordinated between NMFS and WETA.
In addition, the PSO will survey the Level A and Level B harassment zones on two separate days—no earlier than seven days before the first day of construction—to establish baseline observations. Monitoring will be timed to occur during various tides (preferably low and high tides) during daylight hours from locations that are publicly accessible (
WETA will record detailed information about any implementation of shutdowns, including the distance of animals to the pile and description of specific actions that ensued and resulting behavior of the animal, if any. In addition, WETA will attempt to distinguish between the number of individual animals taken and the number of incidences of take. We require that, at a minimum, the following information be collected on the sighting forms:
• Date and time that monitored activity begins or ends;
• Construction activities occurring during each observation period;
• Weather parameters (
• Water conditions (
• Species, numbers, and, if possible, age and sex class of marine mammals;
• Description of any observable marine mammal behavior patterns, including bearing and direction of travel, and if possible, the correlation to SPLs;
• Distance from pile driving activities to marine mammals and distance from the marine mammals to the observation point;
• Description of implementation of mitigation measures (
• Locations of all marine mammal observations; and
• Other human activity in the area.
A draft report will be submitted to NMFS within 90 days of the completion of marine mammal monitoring, or sixty days prior to the requested date of issuance of any future IHA for projects at the same location, whichever comes first. The report will include marine mammal observations pre-activity, during-activity, and post-activity during pile driving and removal days, and will also provide descriptions of any behavioral responses to construction activities by marine mammals and a complete description of all mitigation shutdowns and the results of those actions and an extrapolated total take estimate based on the number of marine mammals observed during the course of construction. A final report must be submitted within 30 days following resolution of comments on the draft report.
NMFS has defined negligible impact as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival (50 CFR 216.103). A negligible impact finding is based on the lack of likely adverse effects on annual rates of recruitment or survival (
Pile driving activities associated with the ferry terminal construction project, as outlined previously, have the potential to disturb or displace marine mammals. Specifically, the specified activities may result in take, in the form of Level A (PTS) and Level B harassment (behavioral disturbance), from underwater sounds generated from pile driving and removal. Potential takes could occur if individuals of these species are present in the ensonified zone when pile driving and removal occurs.
No serious injury or mortality is anticipated given the nature of the activities and measures designed to minimize the possibility of injury to marine mammals. The potential for these outcomes is minimized through the construction method and the implementation of the planned mitigation measures. Specifically, vibratory hammers will be the primary method of installation (impact driving is included only as a contingency). Impact pile driving produces short, sharp pulses with higher peak levels and much sharper rise time to reach those peaks. If impact driving is necessary, implementation of soft start and shutdown zones significantly reduces any possibility of injury. Given sufficient “notice” through use of soft start (for impact driving), marine mammals are expected to move away from a sound source that is annoying prior to it becoming potentially injurious. WETA will also employ the use of 12-in-thick wood cushion block on impact hammers, and a bubble curtain as sound attenuation devices. Environmental conditions in San Francisco Ferry Terminal mean that marine mammal detection ability by trained observers is high, enabling a high rate of success in implementation of shutdowns to avoid injury.
WETA's activities are localized and of relatively short duration (a maximum of 41 days of pile driving over the work season). The entire project area is limited to the San Francisco ferry terminal area and its immediate surroundings. These localized and short-term noise exposures may cause short-term behavioral modifications in harbor seals, northern fur seals, northern elephant seals, California sea lions, harbor porpoises, bottlenose dolphins, and gray whales. Moreover,
The project also is not expected to have significant adverse effects on affected marine mammals' habitat. The project activities will not modify existing marine mammal habitat for a significant amount of time. The activities may cause some fish to leave the area of disturbance, thus temporarily impacting marine mammals' foraging opportunities in a limited portion of the foraging range; but, because of the short duration of the activities and the relatively small area of the habitat that may be affected, the impacts to marine mammal habitat are not expected to cause significant or long-term negative consequences.
Effects on individuals that are taken by Level B harassment, on the basis of reports in the literature as well as monitoring from other similar activities, will likely be limited to reactions such as increased swimming speeds, increased surfacing time, or decreased foraging (if such activity were occurring) (
In summary and as described above, the following factors primarily support our determination that the impacts resulting from this activity are not expected to adversely affect the species or stock through effects on annual rates of recruitment or survival:
• No mortality is anticipated or authorized
• Injurious takes are not expected due to the presumed efficacy of the planned mitigation measures in reducing the effects of the specified activity to the level of least practicable impact;
• Level B harassment may consist of, at worst, temporary modifications in behavior (
• The lack of important feeding, pupping, or other areas in the action area;
• The high level of ambient noise already in the ferry terminal area; and
• The small percentage of the stock that may be affected by project activities (less than seven percent for all species).
Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the monitoring and mitigation measures, NMFS finds that the total marine mammal take from the activity will have a negligible impact on all affected marine mammal species or stocks.
As noted above, only small numbers of incidental take may be authorized under Section 101(a)(5)(D) of the MMPA for specified activities other than military readiness activities. The MMPA does not define small numbers and so, in practice, where estimated numbers are available, NMFS compares the number of individuals taken to the most appropriate estimation of abundance of the relevant species or stock in our determination of whether an authorization is limited to small numbers of marine mammals. Additionally, other qualitative factors may be considered in the analysis, such as the temporal or spatial scale of the activities.
Table 11 details the number of instances that animals could be exposed to received noise levels that could cause Level A and Level B harassment for the planned work at the ferry terminal project site relative to the total stock abundance. The instances of take authorized to be taken for all stocks are considered small relative to the relevant stocks or populations even if each estimated instance of take occurred to a new individual—an unlikely scenario. The total percent of the population (if each instance was a separate individual) for which take is requested is approximately seven percent for bottlenose dolphins, two percent for harbor seals, and less than one percent for all other species (Table 13). For pinnipeds occurring in the vicinity of the ferry terminal, there will almost certainly be some overlap in individuals present day-to-day, and the number of individuals taken is expected to be notably lower. Similarly, the number of bottlenose dolphins that could be subject to Level B harassment is expected to be a single pod of five individuals exposed up to six times over the course of the project.
Based on the analysis contained herein of the activity (including the mitigation and monitoring measures) and the anticipated take of marine mammals, NMFS finds that small numbers of marine mammals will be taken relative to the population size of the affected species or stocks.
There are no relevant subsistence uses of the affected marine mammal stocks or species implicated by this action. Therefore, NMFS has determined that the total taking of affected species or stocks would not have an unmitigable adverse impact on the availability of such species or stocks for taking for subsistence purposes.
Section 7(a)(2) of the Endangered Species Act of 1973 (ESA: 16 U.S.C. 1531
No incidental take of ESA-listed species is authorized or expected to result from this activity. Therefore, NMFS has determined that formal consultation under section 7 of the ESA is not required for this action.
NMFS has issued an IHA to WETA for the potential harassment of small numbers of seven marine mammal species incidental to the Downtown San Francisco Ferry Terminal Expansion Project, South Basin Improvements Project, including the previously mentioned mitigation, monitoring, and reporting measures.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of intent to prepare an environmental impact statement; notice
This action corrects the
The deadline for receipt of comments on the notice of intent published on June 6, 2018 (83 FR 26267), is extended to July 30, 2018. Written comments must be received on or before 11:59 p.m., EDT, on July 30, 2018. Twelve public scoping meetings will be held during this comment period.
Written comments on the referenced notice may be sent by any of the following methods:
•
• Mail or hand deliver to Dr. Christopher M. Moore, Executive Director; Mid-Atlantic Fishery Management Council, 800 North State Street, Suite 201, Dover, Delaware 19901. Mark the outside of the envelope “Bluefish Allocation Amendment Scoping Comments”; or
• Fax to (302) 674-5399.
The scoping document may be obtained from the Council office at the previously provided address, by request to the Council by telephone (302) 674-2331, or via the internet at
Comments may also be provided verbally at any of the 12 public scoping meetings. Hearings will be held June 20-July 16 in nine coastal states from Massachusetts to Florida. The last four hearings will be joint hearings of the Council and Commission. See
Dr. Christopher M. Moore, Mid-Atlantic Fishery Management Council, 800 North State Street, Suite 201, Dover, DE 19901; telephone: 302-674-2331.
On June 6, 2018, NMFS published a notice of intent (NOI) and scoping announcement (83 FR 26267) to provide background information and to request public comment on potential adjustments to the Bluefish Fishery Management Plan (FMP) through an allocation amendment. The NOI provides the public with a formal opportunity to comment on the specific ideas mentioned in the scoping document, as well as any additional ideas and solutions that could improve Bluefish FMP.
In the original notice, the established comment period ended on July 6, 2018, before the last four scoping hearings were scheduled to take place, and without adequate time to receive public comment following the hearings. This correction extends the comment period to July 30, 2018, to appropriately encompass all of the scoping hearings, and to provide the Commission more time to accept final comments. In addition to the extension of the comment period, the location of the scoping hearing in Dover, Delaware, needed to be changed due to building availability. The date and time of this meeting (Thursday, June 21, 2018, at 6:00 p.m.) will remain the same.
In FR Doc. 2018-12105, in the
16 U.S.C. 1801
Office of the Assistant Secretary of Defense for Health Affairs, DoD.
30-Day information collection notice.
The Department of Defense has submitted to OMB for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by July 23, 2018.
Comments and recommendations on the proposed information collection should be emailed to Ms. Cortney Higgins, DoD Desk Officer, at
Fred Licari, 571-372-0493, or
You may also submit comments and recommendations, identified by Docket
•
Requests for copies of the information collection proposal should be sent to Mr. Licari at
National Center for Education Statistics (NCES), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing a revision of an existing information collection.
Interested persons are invited to submit comments on or before July 23, 2018.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Kashka Kubzdela, 202-245-7377 or email
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Office of Fossil Energy, Department of Energy.
Policy statement.
The Department of Energy (DOE) stands behind the long-term authorizations it has issued under the Natural Gas Act, approving the export of natural gas (including liquefied natural
This policy statement is applicable on June 21, 2018.
Amy Sweeney, U.S. Department of Energy (FE-34), Office of Regulation and International Engagement, Office of Fossil Energy, Forrestal Building, Room 3E-042, 1000 Independence Avenue SW, Washington, DC 20585; (202) 586-2627; or Cassandra Bernstein or Ronald (R.J.) Colwell, U.S. Department of Energy (GC-76), Office of the Assistant General Counsel for Electricity and Fossil Energy, Forrestal Building, Room 6D-033, 1000 Independence Ave. SW, Washington, DC 20585; (202) 586-9793 or (202) 586-8499.
The Department of Energy (DOE), Office of Fossil Energy (FE), is responsible for authorizing exports of domestically produced natural gas, including liquefied natural gas (LNG), to foreign nations pursuant to section 3 of the Natural Gas Act (NGA).
To date, DOE/FE has issued 29 final long-term authorizations to export LNG and compressed natural gas to non-FTA countries in a cumulative volume totaling 21.35 billion cubic feet per day of natural gas (approximately 7.79 trillion cubic feet per year).
In these authorizations, DOE has stated that “[s]ome commenters [have] asked DOE to clarify the circumstances under which the agency would exercise its authority to revoke (in whole or in part) previously issued LNG export authorizations.”
DOE/FE has never rescinded a long-term non-FTA export authorization for any reason. Further, DOE has no record of ever having vacated or rescinded an authorization to import or export natural gas over the objections of the authorization holder.
DOE has rescinded (or “vacated”) one long-term LNG export authorization to FTA countries (
The LLNG proceeding was a highly unusual scenario where all evidence indicated that the company was no longer pursuing its proposed LNG export project and had, in fact, ceased to exist as a commercial operation. In vacating LLNG's FTA order without prejudice, DOE responded appropriately in both implementing its statutory authority under NGA section 16 and in upholding the integrity of its natural gas regulatory program under 10 CFR part 590.
Potential importers of U.S. LNG and financiers of LNG export projects (collectively, interested stakeholders) have expressed concern about DOE/FE rescinding one or more non-FTA export authorizations in the future. In raising this concern, they point to the language in the existing non-FTA authorizations (quoted above) in which DOE/FE has observed its authority under NGA section 16 to “make, amend, and rescind such [export] orders . . . as it may find necessary or appropriate . . . .” Citing DOE/FE's language, they have asked what potential “developments” in the U.S. LNG market could rise to the level of “such significant consequence as to put the public interest at risk”—such that DOE would unilaterally rescind one or more non-FTA export authorizations or take other action to protect the public interest under NGA section 3(a).
As a preliminary matter, DOE/FE wishes to allay concerns about the security of existing (or future) non-FTA export authorizations. In this policy statement, DOE/FE affirms its commitment to all export authorizations issued under the NGA, including long-term authorizations approving the export of LNG to non-FTA countries. As indicated above, DOE/FE currently has issued 29 final non-FTA export authorizations, based on a thorough consideration of the public interest under section 3(a) of the NGA. In each of these proceedings, DOE/FE reviewed a substantial administrative record addressing factors including economic impacts, international impacts, security of natural gas supply, and environmental impacts, among others. In granting each application, DOE/FE concluded that exports of U.S. LNG will generate net economic benefits to the broader U.S. economy and will provide energy security and environmental benefits to the global community (including emerging economies presently reliant upon more carbon intensive fuels).
DOE/FE stands firmly behind these factual findings and legal conclusions—many of which have been challenged and upheld in federal court.
As a matter of law, DOE preserves its authority to take action as necessary or appropriate to carry out its duties under the NGA.
Environmental Protection Agency (EPA).
Notice of public hearing and extension of public comment period.
The Environmental Protection Agency (EPA) is announcing that a public hearing will be held on the EPA's proposed decision in its “Review of the Primary National Ambient Air Quality Standard for Sulfur Oxides,” which was published in the
The public hearing will be held on July 10, 2018, in Washington, DC (see
If you would like to speak at the public hearing, please register using the online registration form available at:
For further information concerning the review of the primary national ambient air quality standard (NAAQS) for sulfur oxides, please contact Dr. Nicole Hagan, U.S. Environmental Protection Agency, OAQPS (Mail Code C504-06), Research Triangle Park, NC 27711; telephone number: (919) 541-3153; fax number: (919) 541-5315; email:
The EPA is reviewing the primary NAAQS for sulfur oxides as required under section 109 (42 U.S.C. 7409) of the Clean Air Act (CAA). The EPA's proposed decision to retain the current primary NAAQS for sulfur oxides without revision was published in the
The public hearing will provide interested parties the opportunity to present data, views, or arguments concerning the EPA's proposed decision in the current review of the primary NAAQS for sulfur oxides. The EPA may ask clarifying questions during the oral presentations, but will not respond to the presentations at that time. If you would like to present oral testimony at the hearing, please register using the online registration form available at:
The public hearing will convene at 9:00 a.m. and end at 6:00 p.m. ET or 2 hours after the last registered speaker has spoken, whichever is earlier. The EPA will make every effort to accommodate all individuals interested in providing oral testimony. A lunch break is scheduled from 12:00 p.m. until 1:00 p.m. The hearing schedule, including the list of speakers, will be posted on the EPA's website at
This hearing will be held at a U.S. government facility. Individuals planning to attend the hearing should be prepared to show valid picture identification, such as a driver's license, to the security staff in order to gain access to the meeting room. However, driver's licenses from states and territories that do not comply with the REAL ID Act will not be accepted as identification. The REAL ID Act, passed by Congress in 2005, established new requirements for entering federal facilities. These requirements took effect on July 21, 2014. If your driver's license is issued by American Samoa, you must present an alternative form of identification to enter the federal building where the public hearing will be held. Acceptable alternative forms of identification include: Federal employee badges, passports, enhanced driver's licenses and military identification cards. For additional information for the status of your state regarding the REAL ID Act, go to
The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2013-0566 (available at
Environmental Protection Agency (EPA).
Notice of charter renewal.
Notice is hereby given that the Environmental Protection Agency (EPA) has determined that, in accordance with the provisions of the Federal Advisory Committee Act (FACA), the National Advisory Council for Environmental Policy and Technology (NACEPT) is necessary and in the public interest in connection with the performance of duties imposed on the agency by law. Accordingly, NACEPT will be renewed for an additional two-year period. The purpose of NACEPT is to provide advice and recommendations to the Administrator of EPA on a broad range of environmental policy, technology and management issues.
Eugene Green, Designated Officer, U.S. EPA, (Mail Code 1601M), 1200 Pennsylvania Avenue NW, Washington, DC 20460, telephone (202) 564-2432, or
Export-Import Bank of the United States.
Submission for OMB review and comments request.
The Export-Import Bank of the United States (EXIM), as a part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal Agencies to comment on the proposed information collection, as required by the Paperwork Reduction Act of 1995.
This form is to be completed by EXIM borrowers as required under EXIM Credit Guarantee Facility (CGF) transactions in conjunction with a borrower's request for disbursement for U.S. goods and services. It is used to summarize disbursement documents submitted with a borrower's request and to calculate the requested financing amount. It will enable EXIM lenders to identify the specific details of the amount of disbursement requested for approval to ensure that the financing request is complete and in compliance with EXIM's disbursement requirements.
Comments should be received on or before August 20, 2018 to be assured of consideration.
Comments may be submitted electronically on
This form is submitted by the borrower to the CGF lender for review. The lender reports information regarding the disbursement electronically to EXIM using OMB Number 3048-0046 CGF (EIB 12-02) Disbursement Approval Request Report.
Export-Import Bank of the United States.
Submission for OMB review and comments request.
The Export-Import Bank of the United States (EXIM), as a part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal Agencies to comment on the proposed information collection, as required by the Paperwork Reduction Act of 1995.
This form is to be completed by EXIM borrowers as required under certain EXIM long-term guarantee and direct loan transactions in conjunction with a borrower's request for disbursement for local cost goods and services. It is used to summarize disbursement documents submitted with a borrower's request and to calculate the requested financing amount. It will enable EXIM to identify the specific details of the amount of disbursement requested for approval to ensure that the financing request is complete and in compliance with EXIM's disbursement requirements. This form will be uploaded into an electronic disbursement portal.
Comments should be received on or before August 20, 2018 to be assured of consideration.
Comments may be submitted electronically on
Export-Import Bank of the United States.
Submission for OMB review and comments request.
The Export-Import Bank of the United States (EXIM), as a part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal Agencies to comment on the proposed information collection, as required by the Paperwork Reduction Act of 1995.
This form is to be completed by EXIM borrowers as required under certain EXIM long-term guarantee and direct loan transactions in conjunction with a borrower's request for disbursement for U.S. goods and services. It is used to summarize disbursement documents submitted with a borrower's request and to calculate the requested financing amount. It will enable EXIM to identify the specific details of the amount of disbursement requested for approval to ensure that the financing request is complete and in compliance with EXIM's disbursement requirements. This form will be uploaded into an electronic disbursement portal.
Comments should be received on or before August 20, 2018 to be assured of consideration.
Comments may be submitted electronically on
Export-Import Bank of the United States.
Submission for OMB review and comments request.
The Export-Import Bank of the United States (EXIM), as a part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal Agencies to comment on the proposed information collection, as required by the Paperwork Reduction Act of 1995.
This form is to be completed by EXIM borrowers as required under EXIM Credit Guarantee Facility (CGF) transactions in conjunction with a borrower's request for disbursement for local cost goods and services. It is used to summarize disbursement documents submitted with a borrower's request and to calculate the requested financing amount. It will enable EXIM lenders to identify the specific details of the amount of disbursement requested for approval to ensure that the financing request is complete and in compliance with EXIM's disbursement requirements.
Comments should be received on or before August 20, 2018 to be assured of consideration.
Comments may be submitted electronically on
This form is submitted by the borrower to the CGF lender for review. The lender reports information regarding the disbursement electronically to EXIM using OMB Number 3048-0046 CGF (EIB 12-02) Disbursement Approval Request Report.
Tuesday, June 26, 2018 at 10:00 a.m.
1050 First Street NE, Washington, DC.
This meeting will be closed to the public.
Compliance matters pursuant to 52 U.S.C. 30109.
Matters concerning participation in civil actions or proceedings or arbitration.
Judith Ingram, Press Officer, Telephone: (202) 694-1220.
Board of Governors of the Federal Reserve System.
The Board of Governors of the Federal Reserve System (Board) is adopting a proposal to extend for three years, without revision, Federal Reserve Clearance for Board Public website Usability Surveys (FR 3076, OMB No. 7100-0366).
Federal Reserve Board Clearance Officer—Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System, Washington, DC 20551, (202) 452-3829. Telecommunications Device for the Deaf (TDD) users may contact (202) 263-4869, Board of Governors of the Federal Reserve System, Washington, DC 20551.
OMB Desk Officer—Shagufta Ahmed—Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503 or by fax to (202) 395-6974.
On June 15, 1984, the Office of Management and Budget (OMB) delegated to the Board authority under the Paperwork Reduction Act (PRA) to approve of and assign OMB control numbers to collection of information requests and requirements conducted or sponsored by the Board. Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. Copies of the Paperwork Reduction Act Submission, supporting statements and approved collection of information instrument(s) are placed into OMB's public docket files. The Board may not conduct or sponsor, and the respondent is not required to respond to, an information collection that has been extended, revised, or implemented on or after October 1, 1995, unless it displays a currently valid OMB control number.
The FR 3076 may seek information from users or potential users of various Board web pages, including press releases, data releases and downloads, reports, supervision manuals, brochures, new web pages, audio, video, and use of social media. Information gathered may also include general input on users' interests and needs, feedback on website navigation and layout, distribution channels, or other factors which may affect the ability of users to locate and access content online.
Qualitative surveys conducted using the FR 3076 would include data gathering methods such as focus groups and individual interviews. Quantitative surveys conducted using the FR 3076 would include surveys conducted online or via mobile device, by phone or by mail, emails, or a combination of these methods. The Board may contract with an outside vendor to conduct focus groups, interviews, or surveys, or the Board may collect the data directly.
As the Board's public website continues to evolve, the Board may seek input from users or potential users of Board's public website on questions such as the following:
• Did you find the content and layout relevant and of value?
• How did you find the content you were looking for?
• Was the navigation useful?
• How did you learn about the content?
• How did you access the content? (
• What suggestions do you have for improving the format and appearance of online presentation? (
What other information would be of value to enhance the online tool or information?
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than July 9, 2018.
A.
1.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than July 9, 2018.
1.
Federal Trade Commission.
Oral argument; open meeting.
The Federal Trade Commission (“FTC” or “Commission”) will meet on Tuesday, June 26, 2018, in Room 532 of the FTC Building for an Oral Argument In the Matter of 1-800 Contacts, Inc. The public is invited to attend and observe the open portion of the meeting, which is scheduled to begin at 2:00 p.m. The remainder of the meeting will be closed to the public.
Oral argument is scheduled for June 26, 2018 at 2:00 p.m.
Federal Trade Commission Building, 600 Pennsylvania Avenue NW, Washington, DC 20580.
Donald S. Clark, Secretary, Office of the Secretary, 600 Pennsylvania Avenue NW, Washington, DC 20580, 202-326-2514.
(1) Oral Argument In the Matter of 1-800 Contacts, Inc., Docket No. 9372.
(2) Executive Session to follow Oral Argument In the Matter of 1-800 Contacts, Inc., Docket No. 9372.
On June 15, 2018, the five Commissioners were recorded as voting in the affirmative to conduct Matter Number One in open session, and to close Matter Number Two, and to withhold from this meeting notice such information as is exempt from disclosure under 5 U.S.C. 552b(c).
The Commission has determined that Matter Number Two may be closed under 5 U.S.C. 552b(c)(10), and that the public interest does not require the matter to be open.
The General Counsel has certified that Matter Number Two may properly be closed, citing the following relevant exemptive provision: 5 U.S.C. 552b(c)(10).
Expected to attend the closed meeting are the Commissioners themselves, an advisor to one of the Commissioners, and such other Commission staff as may be appropriate.
By direction of the Commission.
Agency for Toxic Substances and Disease Registry (ATSDR), Department of Health and Human Services (HHS).
Notice of availability; request for comments.
The Agency for Toxic Substances and Disease Registry (ATSDR), within the Department of Health and Human Services (HHS) announces the availability of the Draft Toxicological Profile for Perfluoroalkyls for review and comment. All toxicological profiles issued as “Drafts for Public Comment” represent ATSDR's best efforts to provide important toxicological information on priority hazardous substances. ATSDR is seeking public comments and additional information, reports, and studies about the health effects of these substances. Although ATSDR considers key studies for this substance during the profile development process, this document solicits any relevant, additional studies. ATSDR will evaluate the quality and relevance of such data or studies for possible inclusion into the profile. ATSDR remains committed to providing a comment period for this document as a means to best serve public health.
Comments must be submitted by July 23, 2018.
You may submit comments, identified by docket number ATSDR-2015-0004, by any of the following methods:
•
•
Susan Ingber, Division of Toxicology and Human Health Sciences, Agency for Toxic Substances and Disease Registry, 1600 Clifton Rd. NE, MS F-57, Atlanta, GA 30329, Email:
The Superfund Amendments and Reauthorization Act of 1986 (SARA) [42 U.S.C. 9601
In addition, CERCLA provides ATSDR with the authority to prepare toxicological profiles for substances not found on the SPL. CERCLA authorizes ATSDR to establish and maintain inventory of literature, research, and studies on the health effects of toxic substances (CERCLA section 104(i)(1)(B)); to respond to requests for health consultations (CERCLA section 104(i)(4)); and to support the site-specific response actions conducted by the agency.
There have been two previous Public Comment periods for the Perfluoroalkyls toxicological profile, one in 2009 (74 FR 36492) and 2015 (80 FR 53157). Due to the public comments received to both notices, as well as new literature, we have revised the previous draft profile (including a revised Minimal Risk Level); therefore, ATSDR is releasing a revised draft profile for public comment.
The Draft Toxicological Profiles are available online at
National Institute for Occupational Safety and Health (NIOSH) of the Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Request for comment.
The National Institute for Occupational Safety and Health of the Centers for Disease Control and Prevention announces the availability of a draft NORA Agenda entitled
Electronic or written comments must be received by August 20, 2018.
You may submit comments, identified by CDC-2018-0050 and docket number NIOSH-314, by any of the following methods:
•
•
Emily Novicki
The National Occupational Research Agenda (NORA) is a partnership program created to stimulate innovative research and improved workplace practices. The national agenda is developed and implemented through the NORA sector and cross-sector councils. Each council develops and maintains an agenda for its sector or cross-sector.
The first National Occupational Research Agenda for HCSA was published in 2009 for the second decade of NORA (2006-2016). The revised agenda was developed considering new information about injuries and illnesses, the state of the science, and the probability that new information and approaches will make a difference. As the steward of the NORA process, NIOSH invites comments on the draft
Food and Drug Administration, HHS.
Notice; establishment of a public docket; request for comments.
The Food and Drug Administration (FDA) announces a forthcoming public advisory committee meeting of the Antimicrobial Drugs Advisory Committee. The general function of the committee is to provide advice and recommendations to FDA on regulatory issues. The meeting will be open to the public. FDA is establishing a docket for public comment on this document.
The meeting will be held on August 8, 2018, from 8:30 a.m. to 1 p.m.
FDA White Oak Campus, 10903 New Hampshire Ave., Bldg. 31 Conference Center, the Great Room (Rm. 1503), Silver Spring, MD 20993-0002. Answers to commonly asked questions including information regarding special accommodations due to a disability, visitor parking, and transportation may be accessed at:
FDA is establishing a docket for public comment on this meeting. The docket number is FDA-2018-N-1073. The docket will close on August 7, 2018. Submit either electronic or written comments on this public meeting by August 7, 2018. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before August 7, 2018. The
Comments received on or before July 24, 2018, will be provided to the committee. Comments received after that date will be taken into consideration by FDA.
You may submit comments as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” FDA will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Lauren D. Tesh, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 31, Rm. 2417, Silver Spring, MD 20993-0002, 301-796-9001, Fax: 301-847-8533, email:
FDA intends to make background material available to the public no later than 2 business days before the meeting. If FDA is unable to post the background material on its website prior to the meeting, the background material will be made publicly available at the location of the advisory committee meeting, and the background material will be posted on FDA's website after the meeting. Background material is available at
Persons attending FDA's advisory committee meetings are advised that FDA is not responsible for providing access to electrical outlets.
For press inquiries, please contact the Office of Media Affairs at
FDA welcomes the attendance of the public at its advisory committee meetings and will make every effort to accommodate persons with disabilities. If you require accommodations due to a disability, please contact Lauren Tesh (see
FDA is committed to the orderly conduct of its advisory committee meetings. Please visit our website at
Notice of this meeting is given under the Federal Advisory Committee Act (5 U.S.C. app. 2).
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Major Depressive Disorder: Developing Drugs for Treatment.” The purpose of this draft guidance is to assist sponsors in the clinical development of drugs for the monotherapeutic, combination, and adjunctive treatment of major depressive disorder (MDD). Specifically, this draft guidance addresses FDA's current thinking regarding the overall development program and clinical trial designs for antidepressant drug products. This draft guidance is intended to serve as a focus for continued discussions among FDA, pharmaceutical sponsors, the academic community, and the public. This draft
Submit either electronic or written comments on the draft guidance by August 20, 2018 to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Juliette Touré, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, Rm. 4120, Silver Spring, MD 20993-0002, 301-796-2260.
FDA is announcing the availability of a draft guidance for industry entitled “Major Depressive Disorder: Developing Drugs for Treatment.” The purpose of this draft guidance is to assist sponsors in the clinical development of drugs for the monotherapeutic, combination, and adjunctive treatment of MDD. Specifically, this draft guidance addresses FDA's current thinking regarding the overall development program and clinical trial designs for antidepressant drug products. This draft guidance is intended to serve as a focus for continued discussions among FDA, pharmaceutical sponsors, the academic community, and the public.
This draft guidance revises the guidance for industry entitled “Guidelines for the Clinical Evaluation of Antidepressant Drugs” issued in September 1977. Major revisions were made to the 1977 guidance to align it with the FDA's current thinking on this topic.
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on developing drugs for the treatment of MDD. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations. This guidance is not subject to Executive Order 12866.
This draft guidance refers to previously approved collections of information that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR parts 312 and 314 have been approved under OMB control numbers 0910-0014 and 0910-0001, respectively.
Persons with access to the internet may obtain the draft guidance at either
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Prescription Drug Act User Fee Waivers, Reductions, and Refunds for Drug and Biological Products.” This revised draft guidance provides recommendations to applicants planning to request a waiver or reduction in user fees. This draft guidance is a revision of the guidance for industry entitled “User Fee Waivers, Reductions, and Refunds for Drug and Biological Products,” issued in September 2011.
Although you can comment on any draft guidance at any time (see 21 CFR 10.115(g)(5)), to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance, submit either electronic or written comments on the draft guidance by August 20, 2018.
You may submit comments as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Submit written requests for single copies of the draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002 or to the Office of Communication, Outreach and Development, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist the office in processing your requests. See the
Sungjoon “Alvin” Chi, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Rm. 2185, Silver Spring, MD 20993, 301-796-7900,
FDA is announcing the availability of a draft guidance for industry entitled “Prescription Drug User Fee Waivers, Reductions, and Refunds for Drug and Biological Products.” This draft guidance provides recommendations to applicants regarding requests for waivers, reductions, or refunds of user fees assessed under sections 735 and 736 (21 U.S.C. 379g and 379h) of the Federal Food, Drug, and Cosmetic (FD&C) Act. This revised draft guidance describes the types of waivers, reductions, and refunds permitted
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on “Prescription Drug User Fee Waivers, Reductions, and Refunds for Drug and Biological Products.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations. This draft guidance is not subject to Executive Order 12866.
Under the Paperwork Reduction Act (44 U.S.C. 3501-3520), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party.
The information collection of this draft guidance has been submitted for OMB renewal of approval under OMB control number 0910-0693. In addition, the collection of information associated with Form FDA 3397 has been previously approved under OMB control number 0910-0297. Collection of information associated with new drug application or biologics license applications have been previously approved under OMB control numbers 0910-0001 and 0910-0338, respectively. See section X of the draft guidance document.
Persons with access to the internet may obtain the draft guidance at either
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Submit either electronic or written comments on the collection of information by August 20, 2018.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before August 20, 2018. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential
Domini Bean, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-5733,
Under the PRA (44 U.S.C. 3501-3520), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
This information collection supports Agency implementation of the Drug Quality and Security Act (DQSA) (Pub. L. 113-54), which amended the FD&C Act by adding new section 503B (21 U.S.C. 353b).
This notice solicits comments on adverse event reporting for outsourcing facilities under section 503B of the FD&C Act.
Under section 503B(b), a compounder can register as an outsourcing facility with FDA. If the conditions outlined in section 503B(a) of the FD&C Act are satisfied, a drug compounded by or under the direct supervision of a licensed pharmacist in an outsourcing facility is exempt from certain sections of the FD&C Act, including section 502(f)(1) (21 U.S.C. 352(f)(1)) (concerning the labeling of drugs with adequate directions for use) and section 505 (21 U.S.C. 355) (concerning the approval of human drug products under new drug applications (NDAs) or abbreviated new drug applications (ANDAs)). Drugs compounded in outsourcing facilities are not exempt from the requirements of section 501(a)(2)(B) of the FD&C Act (21 U.S.C. 351(a)(2)(B)) (concerning current good manufacturing practice for drugs).
Under section 503B(b)(5), an outsourcing facility must submit adverse event reports to FDA in accordance with the content and format requirements established through guidance or regulation under 21 CFR 310.305 (or any successor regulations). Accordingly, we developed the document, “Guidance for Industry: Adverse Event Reporting for Outsourcing Facilities Under Section 503B of the Federal Food, Drug, and Cosmetic Act”.
Under § 310.305(c)(1), manufacturers, packers, and distributors of marketed prescription drug products that are not the subject of an approved NDA or ANDA, including, as set forth in the guidance, outsourcing facilities must submit to FDA adverse event reports within 15 calendar days of receiving the information and must submit follow-up reports within 15 calendar days of receipt of new information about the adverse event, or as requested by FDA. Outsourcing facilities must submit the adverse event report in an electronic format that FDA can process, review, and archive (collection of information is approved by OMB control number 0910-0291). A copy of the current labeling of the compounded drug product must be provided.
Under § 310.305(g), entities subject to the regulation must maintain for 10 years the records of all adverse events required to be reported under § 310.305. The outsourcing facility should also maintain records of its efforts to obtain the data elements described in the draft guidance for each adverse event report.
We estimate the burden of the information collection as follows:
This is the first extension of the information collection and we have retained the currently approved burden estimate. Based on our review of Agency data, we estimate that annually 55 outsourcing facilities (“Number of Respondents” and “Total Annual Responses” in table 1) will submit adverse event reports to FDA as specified in the guidance and that preparing and submitting this information will take approximately 1.1 hours per registrant (“Average Burden per Response” in table 1). Likewise, we estimate that annually 55 outsourcing facilities (“Number of Recordkeepers” in table 2) will maintain records of adverse events as specified in the guidance and that preparing and maintaining the records will take approximately 16 hours per registrant (“Average Burden per Recordkeeping” in table 2).
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is withdrawing approval of five new drug applications (NDAs) from multiple applicants. The holders of the applications notified the Agency in writing that the drug products were no longer marketed and requested that the approval of the applications be withdrawn.
Approval is withdrawn as of July 23, 2018.
Florine P. Purdie, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6248, Silver Spring, MD 20993-0002, 301-796-3601.
The holders of the applications listed in the table have informed FDA that these drug products are no longer marketed and have requested that FDA withdraw approval of the applications under the process in § 314.150(c) (21 CFR 314.150(c)). The applicants have also, by their requests, waived their opportunity for a hearing. Withdrawal of approval of an application or abbreviated application under § 314.150(c) is without prejudice to refiling.
Therefore, approval of the applications listed in the table, and all amendments and supplements thereto, is hereby withdrawn as of July 23, 2018. Introduction or delivery for introduction into interstate commerce of products without approved new drug applications violates section 301(a) and (d) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 331(a) and (d)). Drug products that are listed in the table that are in inventory on July 23, 2018 may continue to be dispensed until the inventories have been depleted or the drug products have reached their expiration dates or otherwise become violative, whichever occurs first.
Federal Emergency Management Agency, DHS.
Notice and request for comments.
The Federal Emergency Management Agency (FEMA) will submit the information collection abstracted below to the Office of Management and Budget for review and clearance in accordance with the requirements of the Paperwork Reduction Act of 1995. The submission will describe the nature of the information collection, the categories of respondents, the estimated burden (
Comments must be submitted on or before July 23, 2018.
Submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the Desk Officer for the Department of Homeland Security, Federal Emergency Management Agency, and sent via electronic mail to
Requests for additional information or copies of the information collection should be made to Director, Information Management Division, 500 C Street SW, Washington, DC 20472, email address
This proposed information collection previously published in the
Comments may be submitted as indicated in the
Federal Emergency Management Agency, DHS.
Notice and request for comments.
The Federal Emergency Management Agency, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public to take this opportunity to comment on an extension, without change, of a currently approved
Comments must be submitted on or before August 20, 2018.
To avoid duplicate submissions to the docket, please use only one of the following means to submit comments:
(1)
(2)
All submissions received must include the agency name and Docket ID. Regardless of the method used for submitting comments or material, all submissions will be posted, without change, to the Federal eRulemaking Portal at
Wade Witmer, Deputy for the Integrated Public Alert and Warning System (IPAWS) Program, FEMA, Continuity Communications Division, (202) 646-2523,
Public Law 114-143, The IPAWS Modernization Act of 2015, and Presidential Executive Order 13407 establishes the policy for an effective, reliable, integrated, flexible, and comprehensive system to alert and warn the American people in situations of war, terrorist attack, natural disaster, or other hazards to public safety and wellbeing. The Integrated Public Alert and Warning System (IPAWS) is the Department of Homeland Security's (DHS) response to the Executive Order. The Stafford Act (U.S.C. Title 42, Chapter 68, Subchapter II) requires that FEMA make IPAWS available to Federal, State, and local agencies for the purpose of providing warning to governmental authorities and the civilian population in areas endangered by disasters. The information collected is used by FEMA to create a Memorandum of Agreement (MOA) that regulates the management, operations, and security of the information technology system connection between a Federal, State, territorial, tribal or local alerting authority and IPAWS-OPEN (Open Platform for Emergency Notifications).
Comments may be submitted as indicated in the
Fish and Wildlife Service, Interior.
Notice of availability and request for comments.
The U.S. Fish and Wildlife Service (Service) uses a collision risk model (CRM) to predict the number of golden and bald eagles that may be killed at new wind facilities. The model incorporates existing information on eagle exposure and collision probability in the form of prior distributions (priors). The Service has undertaken an analysis to update the priors using all available data that meet specific criteria for both species of eagle. This notice announces the availability of a summary report of that analysis, which generates new exposure and collision priors for both species of eagle. We are soliciting public comments on the summary report, which will be considered by the Service before using the new priors in the CRM.
To ensure consideration of written comments, they must be submitted on or before August 20, 2018.
You may submit written comments by one of the following methods:
We will post all comments on
We request that you send comments by only one of the methods described above. We will post all information received on
Eliza Savage, at 703-358-2329 (telephone), or
The U.S. Fish and Wildlife Service (Service) uses a collision risk model (CRM) to predict the number of golden and bald eagles that may be killed at new wind facilities (USFWS 2013; New et al. 2015). The CRM incorporates existing knowledge of eagle use around a proposed wind facility (exposure) and the probability of an eagle colliding with an operating turbine (collision probability). Essentially, the CRM uses three estimates to generate an annual eagle fatality estimate in the form of a probability distribution. These estimates are: (1) A project-specific estimate of eagle exposure; (2) a project-specific estimate of the amount of hazardous area and time that will be created by the project; and (3) an estimate of the probability that an exposed eagle that enters the hazardous area will be struck and injured or killed by a turbine blade. The median (50th quantile) fatality rate of the CRM-generated probability distribution is the point on the distribution at which there is an equal risk of under- and overestimating eagle fatalities. The Service uses the 80th quantile of the CRM fatality probability distribution to determine the take limit for incidental take permits, which lowers the risk of underestimating eagle take to a 20% chance.
In our 2016 revision to the eagle take regulations (81 FR 91494, Dec. 16, 2016), the Service reaffirmed both our intent to use the CRM to obtain initial estimates of eagle fatalities at new wind facilities, and that we would undertake a review of the background data used in the model to generate the estimates. The model is constructed using a Bayesian framework, and as such incorporates existing information on eagle exposure and collision probability in the form of prior distributions (priors). The priors are formally combined with site-specific data on exposure and the amount of hazardous area and operational time for a site to estimate the expected number of annual eagle collision fatalities.
The current priors for the CRM use data for golden eagles from nine sites with complete survey effort information for exposure, and four sites for collision probability (New et al. 2015). There were no data available to estimate parameters specific to bald eagles when we initially developed the model, so the golden eagle priors were used as surrogates for bald eagles. Public comments on the 2016 eagle rule revision were critical of the Service's CRM because the priors for golden eagles had not been updated to include new information, and because priors have not been developed for bald eagles even though data on exposure and collision probability are now available for this species. In response to these comments, the Service committed to updating the golden eagle priors, and to explore whether sufficient data exist to develop separate bald eagle exposure and collision priors.
The Service has undertaken that analysis using all available data that meet specific criteria for both species of eagle. This notice announces the availability of a summary report of that analysis, which includes new exposure and collision priors for both species of eagle. The report may be downloaded from the Federal e-Rulemaking Portal:
For this update, the Service reviewed data sets for 419 wind energy facilities, but many did not meet our criteria for incorporation into the priors (see the summary report for criteria used to filter projects). Data from 71 new and the nine original wind projects were used for the updated exposure priors. Of these 80 sites, 61 provided data for golden eagles and 59 for bald eagles. For the collision priors, 18 new sites in addition to the original four sites were identified as having data sufficient to include in the updated collision priors. We used data from 21 sites for golden eagles and 14 for bald eagles in the collision-prior update. The updated exposure prior is lower for both species than the prior currently in use. The updated collision prior is slightly lower than the current prior for golden eagles and higher for bald eagles.
Many of the commenters on the 2016 eagle rule revision encouraged the Service to develop a specific bald eagle prior because they believe collision risk for bald eagles is lower than for golden eagles. The data available to the Service suggest that there is more variation in both exposure and collision risk for bald eagles, and that uncertainty results in a higher expected collision probability for this species. The Service does not regard this outcome as counter-intuitive, because the range in abundance of bald eagles across the landscape is far greater than for golden eagles, and where bald eagles are abundant, they engage in social behaviors and intra-specific interactions that may make them more vulnerable than golden eagles to collisions (81 FR 91552). Thus, the implication that bald eagles are at high risk at a few wind facilities, while their risk is much lower at many others, is tenable. The Service acknowledges, however, that the bald eagle collision prior is based on data from relatively few sites that do not span the range of bald eagle density conditions that exist across the country, and therefore may not be representative of all locations. Given this, the Service is considering three alternatives for how to incorporate species-specific priors for bald eagles into the CRM and fatality modeling process:
(1) Use the updated species-specific priors, and use the 80th quantile of the CRM fatality estimates as the initial permitted take number for permits, as is the current practice.
(2) Use the updated species-specific priors, but because the status of bald eagles is secure, adopt a risk-tolerant policy for bald eagles and select a more liberal quantile on the CRM fatality distribution as the initial permitted take number for this species.
(3) Given the limitations in data available to inform the bald eagle priors, initiate an expert elicitation process to further refine the bald eagle priors.
Under any of these scenarios, the Service would use data submitted under
Alternative 1 would mean that for a similar level of eagle use observed at a project site, the Service would use higher fatality estimates for bald eagles than for golden eagles. Alternative 2 would be a decision by the Service to be more `risk-tolerant' for bald eagles. This would mean that initial fatality predictions would be lower, however it would also likely mean that more permits would have to be amended to increase the permitted take over time (
Many commenters on the draft 2016 rule urged the Service to adopt changes to the golden eagle CRM priors based on a recent peer-reviewed scientific article by Bay et al. (2016). Service staff coordinated with authors of the Bay et al. paper in development of this update, and all data used in the Bay et al. paper that were available to us and that met our criteria were incorporated. The Service decided not to incorporate the results of the Bay et al. paper directly, however, for two main reasons. First, the Service could access and utilize more data than were used in the Bay et al. paper, and so our updated priors incorporate more recent information from a wider range of projects and sites than were used by Bay et al. Second, the Bay et al. analysis used a fatality estimator that did not account for the possibility of undetected eagle deaths during mortality monitoring when no dead eagles were found. The Service uses models in our update that account for imperfect detection when dead eagles are not encountered during monitoring, because there is ample evidence that finding no dead eagles does not mean there were no eagle fatalities. Thus, although the Service's updated collision probability for golden eagles is higher than that reported by Bay et al., our approach is more accurate and consistent with our risk-averse policy with respect to estimating and managing eagle take.
Written comments we receive become part of the public record associated with this action. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that the entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. All submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, will be made available for public disclosure in their entirety.
Bay, K., Nasman, K., Erickson, W., Taylor, K., Kosciuch, K. (2016). Predicting Eagle Fatalities at Wind Facilities, Journal of Wildlife Management 80:1000-1010.
New, L., Bjerre, E., Millsap, B., Otto, M.C., Runge, M.C. (2015). A Collision Risk Model to Predict Avian Fatalities at Wind Facilities: An Example Using Golden Eagles, Aquila chrysaetos,
U.S. Fish and Wildlife Service. 2013. Eagle conservation plan guidance. Module 1-land-based wind energy. Version 2. Division of Migratory Bird Management, Washington, DC. URL
U.S. Geological Survey, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, the U.S. Geological Survey (USGS) is proposing to renew an information collection (IC).
Interested persons are invited to submit comments on or before August 20, 2018.
Send your comments on the information collection request (ICR) by mail to the U.S. Geological Survey, Information Collections Clearance Officer, 12201 Sunrise Valley Drive, MS 159, Reston, VA 20192; or by email to
To request additional information about this ICR, contact Keith Pardieck by email at
We, the U.S. Geological Survey, in accordance with the Paperwork Reduction Act of 1995, provide the general public and other Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format.
We are soliciting comments on the proposed ICR that is described below. We are especially interested in public comment addressing the following issues: (1) Is the collection necessary to the proper functions of the USGS; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the USGS enhance the quality, utility, and clarity of the information to be collected; and (5) how might the USGS minimize the burden of this collection on the respondents, including through the use of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authorities for this action are the Paperwork Reduction Act of 1995 (44 U.S.C. 3501,
Bureau of Reclamation, Interior.
Notice of intent to accept proposals, select lessee(s), and contract for hydroelectric power development.
The Bureau of Reclamation (Reclamation) has received a proposal to allow hydroelectric power development on the North Unit Main Canal (NUMC) under a Lease of Power Privilege (LOPP). To ensure fair and open competition, Reclamation is soliciting competing proposals at this time.
Submit the written proposal on or before November 19, 2018. Late proposals will not be considered. Delayed delivery to the Regional Power Manager's office due to failures or misunderstandings of the entity and/or of mail, overnight, or courier services will not excuse lateness, and accordingly, are advised to provide sufficient time for delivery.
Send eight copies of the written proposal to Mr. Joseph Summers, Regional Power Manager, Bureau of Reclamation, 1150 North Curtis Road, Suite 100, Boise, ID 83706; telephone (208) 378-5290.
Questions regarding proposal requirements or technical data available for the North Unit Main Canal may be directed to Mr. Jake Nink, Bureau of Reclamation, 1150 North Curtis Road, Suite 100, Boise, ID 83706; telephone (208) 378-5090; email
Specific information related to operations and maintenance of the canal system may be obtained from Mr. Mike Britton, Bureau of Reclamation, North Unit Irrigation District Manager, 2024 Northwest Beech Street, Madras, OR 97741; telephone (541) 475-3625; email to
A LOPP is a congressionally authorized alternative to Federal hydroelectric power development. It is a contractual right given to a non-federal entity to use a Reclamation asset for electric power generation consistent with Reclamation project purposes. Terms of a LOPP shall not exceed 40 years. General authority under Reclamation law for a LOPP includes, among others, the Town Sites and Power Development Act of 1906 (43 U.S.C. 522), the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)) (1939 Act), and the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act of 2013 (Act of August 9, 2013, 127 Stat. 498).
Reclamation will be responsible for compliance with the National Environmental Policy Act (NEPA) related to any project selected for consideration pursuant to this Notice of Intent. Reclamation will also lead necessary consultation with American Indian Tribal Governments and compliance with the National Historic Preservation Act, Endangered Species Act, and other related environmental regulations for all elements of the proposed project. A LOPP may be issued only after Reclamation has determined that NEPA and any other regulatory compliance requirements are completed.
On August 7, 2017, Reclamation received a formal proposal for non-federal hydroelectric power development from Kinet Inc. at 12 sites on the NUMC. Kinet Inc. proposes to develop these sites utilizing a new technology called linear Pelton turbines. This solicitation is exclusive to the following 12 NUMC sites:
Site Name—Mile 2 South.
Latitude Longitude—44.082201-121.286401.
Canal Mile Maker—1.78
Head (m)—6.1.
Flow (cms)—20.
Site Name—Mile 2 North.
Latitude Longitude—44.086971-121.274233.
Canal Mile Marker—2.11.
Head (m)—6.1.
Flow (cms)—20.
Site Name—Mile 3.
Latitude Longitude—44.092839-121.256296.
Canal Mile Marker—3.52.
Head (m)—6.1.
Flow (cms)—20.
Site Name—Mile 18.
Latitude Longitude—44.251184-121.128517.
Canal Mile Marker—18.34.
Head (m)—6.71.
Flow (cms)—21.
Site Name—Mile 19.
Latitude Longitude—44.2666-121.12075.
Canal Mile Marker—19.
Head (m)—4.4.
Flow (cms)—16.
Site Name Mile—20.
Latitude Longitude—44.2838-121.11471.
Canal Mile Marker—20.
Head (m)—5.36.
Flow (cms)—21.
Site Name Mile—43.
Latitude Longitude—44.500374-121.154865.
Canal Mile Marker—45.
Head (m)—18.2.
Flow (cms)—7.1.
Site Name—Mile 48.
Latitude Longitude—44.5368587-121.153547.
Canal Mile Marker—47.98.
Head (m)—3.66.
Flow (cms)—7.2.
Site Name—Mile 50 East.
Latitude Longitude—44.571091-121.158783.
Canal Mile Marker—19.
Head (m)—51.
Flow (cms)—2.98.
Site Name—Mile 50 West.
Latitude Longitude—44.572148-121.160127.
Canal Mile Marker—19.
Head (m)—3.05.
Flow (cms)—7.0.
Site Name—Mile 52 South.
Latitude Longitude—44.601337-121.162522.
Canal Mile Marker—53.69.
Head (m)—3.05.
Flow (cms)—7.0.
Site Name—Mile 52 North.
Latitude Longitude—44.603526-121.161854.
Canal Mile Marker—19.
Head (m)—3.05.
Flow (cms)—7.0.
Reclamation notified NUID of the Kinet Inc. proposal and solicited NUID's interest in submitting a proposal as a preferred entity. In a subsequent letter dated September 21, 2017, NUID declined interest in hydroelectric power development at the proposed sites. As a result, Reclamation is soliciting proposals for consideration to allow hydroelectric power development under a LOPP on the NUMC system.
1. Under this solicitation, Reclamation may only issue a LOPP for hydroelectric power development at the 12 identified NUMC sites described herein.
2. Any LOPP terms for hydroelectric power development on the NUMC must not interfere with existing contractual commitments related to operations and maintenance of the canal system. The lessee (
3. The lessee would be responsible for securing transfer and marketing of the power generated by the proposed project.
4. All costs incurred by the United States related to a proposed LOPP project will be at the expense of the lessee. Such costs include management and coordination of necessary Reclamation activities, provision of information, conduct of or assistance with regulatory compliance (including NEPA), consultation during design development and related to operations and maintenance under a LOPP, development of the LOPP, necessary contracts with outside consultants, or any other cost for which the government would be reimbursed by an applicant or the general public. In addition, the lessee will be required to make annual payments to the United States for the use of a government facility in the amount of at least 2-3 mills per kilowatt-hour of gross energy produced by the facility, measured at the generator(s).
5. The LOPP will include provisions for the mill rate to increase each year commensurate with inflation based on the previous 5-year average of the Gross Domestic Product (GDP) Price Deflator; however, the rate of increase will be capped at 5 percent. If the 5-year GDP Price Deflator average shows no change or deflation, the mill rate will remain the same as the previous year's rate. Annual payments to the United States will be deposited as a credit to the Reclamation fund and project to be applied against the total outstanding reimbursable repayment obligation for reimbursable project construction costs of the Deschutes Project pursuant to the existing construction cost allocation (not applied only against power construction costs). If the outstanding reimbursable repayment obligation for project construction costs is satisfied, then the payments will be held as a statutory credit for the project or program until an eligible reimbursable project expense is incurred against which the credit can be applied.
Interested parties should submit proposals specifically addressing the following qualifications, capabilities, and approach factors. Proposals submitted will be evaluated and ranked directly based on these factors. Additional information may be provided at the discretion of those submitting proposals.
(a)
• Type of organization.
• Business history, including length of time in business, experience in funding, and design and construction of similar projects.
• Industry rating(s) that indicate financial soundness and/or technical and managerial capability.
• Experience of key management personnel.
• History of any reorganizations or mergers with other companies (if applicable).
• Preference status (as applied to a LOPP, the term “preference entity” means an entity qualifying for preference under Section 9(c) of the 1939 Act as a municipality, public corporation or agency, or cooperative or other nonprofit organization financed in whole or in part by loans made pursuant to the Rural Electrification Act of 1936, as amended).
• Any other information not already requested above or in the following evaluation categories that demonstrates the interested entity's organizational, technical, and financial ability to perform all aspects of the work.
(b)
Describe proposed capacities and general operation of the hydroelectric projects to include generation capacity, power source and power consumption, configuration, turbine generating capacity, distribution transmission line size and route, and other relevant aspects of the project.
Describe the ability of generation to provide ancillary services, such as regulation, spinning reserves, and volt-ampere reactive support, and information on the reliability of the generation, potential maintenance outage schedule, and duration.
(c)
(d)
(e)
(f)
(g)
Describe potential beneficial impacts that may be expected from the development to include such perspectives as energy conservation or using available water resources in the public interest.
Describe proposed studies to adequately define the extent of the adverse and beneficial impacts, potential severity, and potential alternatives to mitigate impacts.
(h)
(i)
(j)
(k)
Reclamation will evaluate proposals received in response to this published notice. Proposals will be ranked according to response to the factors described in Fundamental Considerations and Requirements and Proposal Content Guidelines sections of this notice. In general, Reclamation will give more favorable consideration to proposals that (1) are well adapted to developing, conserving, and utilizing the water resource and protecting natural resources; (2) clearly demonstrate that the offeror is qualified to develop the hydropower facility and provide for long-term operation and maintenance; and (3) best share the economic benefits of the hydropower development among parties to the LOPP. A proposal will be deemed unacceptable if it is inconsistent with Deschutes Project purposes, as determined by Reclamation.
Reclamation will give preference to those entities that qualify as preference entities (as defined under Proposal Content Guidelines, item (a), of this notice) provided that the preference entity is well qualified and their proposal is at least as well adapted to developing, conserving, and utilizing the water and natural resources as other submitted proposals. Preference entities will be allowed 30 days to improve their proposals, if necessary, to be made at least equal to a proposal(s) that may have been submitted by a non-preference entity.
Reclamation will notify, in writing, all entities submitting proposals of Reclamation's decision regarding selection of the potential lessee. The selected potential lessee will have 15 months from the date of selection of the lessee to sign the preliminary lease, complete the requirements set forth in the preliminary lease, and to sign the LOPP. The lessee will then have up to 3 years from the date of the preliminary lease agreement to the beginning of construction. Maximum timeframes for construction will be determined by the Regional Director. Such timeframes may be adjusted for just cause resulting from actions and/or circumstances that are beyond the control of the lessee.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade
Lisa R. Barton, Secretary to the Commission, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-2000. The public version of the complaint can be accessed on the Commission's Electronic Document Information System (EDIS) at
General information concerning the Commission may also be obtained by accessing its internet server at United States International Trade Commission (USITC) at
The Commission has received a complaint and a submission pursuant to § 210.8(b) of the Commission's Rules of Practice and Procedure filed on behalf of Walbro, LLC on June 14, 2018. The complaint alleges violations of section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain carburetors and products containing such carburetors. The complaint names as respondents: Ruixing Carburetor Manufacturing Co., Limited Zhejiang of China; Huayi Carburetor Factory of China; Tillotson of Ireland; Fujian Hualong Carburetor Co., Ltd. of China; Fuding Guangda General Machinery Co., Ltd. of China; Wuyi Henghai Tools Co., Ltd. of China; Fuding Youyi Trade Co., Ltd. of China; Amazon.com, Inc. of Seattle, WA; Amerisun Inc. of Itasca, IL; Ardisam, Inc. of Cumberland, WI; Buffalo Corporation of O'Fallon, MO; Cabela's Incorporated of Sidney, NE; Champion Power Equipment, Inc. of Santa Fe, CA; Feldmann Eng. & Mfg. Co., Inc. of Sheboygan Falls, WI; FNA Group, Inc. of Pleasant Prairie, WI; Frictionless World, LLC of Denver, CO; Generac Power Systems, Inc. of Waukesha, WI; Husqvarna Professional Products, Inc. of Charlotte, NC; Imperial Industrial Supply Co. d/b/a Duromax Power Equipment of Ontario, CA; Kmart Corporation of Hoffman Estates, IL; Lowe's Companies, Inc. of Mooresville, NC; Mat Industries, LLC of Lake Zurich, IL; Menards, Inc. of Eau Claire, WI; MTD Products Inc. of Valley City, OH; North American Tool Industries of Huntington, IN; Northern Tool & Equipment Co., Inc. of Burnsville, MN; QV Tools LLC of Las Vegas, NV; Sears, Roebuck and Co. of Hoffman Estates, IL; Target Corporation of Minneapolis, MN; Techtronics Industries Co. Ltd of d/b/a Techtronic Industries Power Equipment of Hong Kong; The Home Depot, Inc. of Atlanta, GA; Thunderbay Products of Clayton, WI; Tool Tuff Direct LLC of Golden, CO; Tractor Supply Company of Brentwood, TN; and Walmart Inc. of Bentonville, AR. The complainant requests that the Commission issue a general exclusion order, and in the alternative, issue a limited exclusion order, cease and desist orders, and impose a bond upon respondents' alleged infringing articles during the 60-day Presidential review period pursuant to 19 U.S.C. 1337(j).
Proposed respondents, other interested parties, and members of the public are invited to file comments, not to exceed five (5) pages in length, inclusive of attachments, on any public interest issues raised by the complaint or § 210.8(b) filing. Comments should address whether issuance of the relief specifically requested by the complainant in this investigation would affect the public health and welfare in the United States, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, or United States consumers.
In particular, the Commission is interested in comments that:
(i) Explain how the articles potentially subject to the requested remedial orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the requested remedial orders;
(iii) identify like or directly competitive articles that complainant, its licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) indicate whether complainant, complainant's licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to the requested exclusion order and/or a cease and desist order within a commercially reasonable time; and
(v) explain how the requested remedial orders would impact United States consumers.
Written submissions must be filed no later than by close of business, eight calendar days after the date of publication of this notice in the
Persons filing written submissions must file the original document electronically on or before the deadlines stated above and submit 8 true paper copies to the Office of the Secretary by noon the next day pursuant to § 210.4(f) of the Commission's Rules of Practice and Procedure (19 CFR 210.4(f)). Submissions should refer to the docket number (“Docket No. 3323”) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and of §§ 201.10 and 210.8(c) of the Commission's Rules of Practice and Procedure (19 CFR 201.10, 210.8(c)).
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that a complaint was filed with the U.S. International Trade Commission on April 2, 2018, under section 337 of the Tariff Act of 1930, as amended, on behalf of Glycosyn LLC. An amended complaint was filed on May 16, 2018. An additional supplement to the complaint was also filed on May 25, 2018. The complaint, as amended and supplemented, alleges violations of section 337 based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain human milk oligosaccharides by reason of infringement of U.S. Patent No. 9,453,230 (“the '230 patent”) and U.S. Patent No. 9,970,018 (“the '018 patent”). The complaint further alleges that an industry in the United States exists as required by the applicable Federal Statute.
The complainant requests that the Commission institute an investigation and, after the investigation, issue a limited exclusion order and cease and desist orders.
The complaint, except for any confidential information contained therein, is available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Room 112, Washington, DC 20436, telephone (202) 205-2000. Hearing impaired individuals are advised that information on this matter can be obtained by contacting the Commission's TDD terminal on (202) 205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at (202) 205-2000. General information concerning the Commission may also be obtained by accessing its internet server at
Pathenia M. Proctor, The Office of Unfair Import Investigations, U.S. International Trade Commission, telephone (202) 205-2560.
(1) Pursuant to subsection (b) of section 337 of the Tariff Act of 1930, as amended, an investigation be instituted to determine whether there is a violation of subsection (a)(1)(B) of section 337 in the importation into the United States, the sale for importation, or the sale within the United States after importation of products identified in paragraph (2) by reason of infringement of one or more of claims 1-40 of the '230 patent; and claims 1-28 of the '018 patent; and whether an industry in the United States exists as required by subsection (a)(2) of section 337;
(2) Pursuant to section 210.10(b)(1) of the Commission's Rules of Practice and Procedure, 19 CFR 210.10(b)(1), the plain language description of the accused products or category of accused products, which defines the scope of the investigation, is “2′-fucosyllactose oligosaccharides”;
(3) Pursuant to Commission Rule 210.50(b)(1), 19 CFR 210.50(b)(1), the presiding administrative law judge shall take evidence or other information and hear arguments from the parties and other interested persons with respect to the public interest in this investigation, as appropriate, and provide the Commission with findings of fact and a recommended determination on this issue, which shall be limited to the statutory public interest factors set forth in 19 U.S.C. 1337(d)(1), (f)(1), (g)(1);
(4) For the purpose of the investigation so instituted, the following are hereby named as parties upon which this notice of investigation shall be served:
(a)
(b) The respondents are the following entities alleged to be in violation of section 337, and are the parties upon which the complaint is to be served: Jennewein Biotechnologie GmbH, Maarweg 32, D-53619 Rheinbreitbach, Germany.
(c) The Office of Unfair Import Investigations, U.S. International Trade Commission, 500 E Street SW, Suite 401, Washington, DC 20436; and
(5) For the investigation so instituted, the Chief Administrative Law Judge, U.S. International Trade Commission, shall designate the presiding Administrative Law Judge.
Responses to the complaint and the notice of investigation must be submitted by the named respondents in accordance with section 210.13 of the Commission's Rules of Practice and Procedure, 19 CFR 210.13. Pursuant to 19 CFR 201.16(e) and 210.13(a), such responses will be considered by the Commission if received not later than 20 days after the date of service by the Commission of the complaint and the notice of investigation. Extensions of time for submitting responses to the complaint and the notice of investigation will not be granted unless good cause therefor is shown.
Failure of a respondent to file a timely response to each allegation in the complaint and in this notice may be deemed to constitute a waiver of the right to appear and contest the allegations of the complaint and this notice, and to authorize the administrative law judge and the Commission, without further notice to the respondent, to find the facts to be as alleged in the complaint and this notice and to enter an initial determination and a final determination containing such findings, and may result in the issuance of an exclusion order or a cease and desist order or both directed against the respondent.
By order of the Commission.
Disability Rights Section, Civil Rights Division, U.S. Department of Justice.
30 Day Notice.
The Department of Justice, Civil Rights Division, Disability Rights Section, has submitted the following information collection request to the Office of Management and Budget for review and approval in accordance with the Paperwork Reduction Act of 1995. The information collection extension is published to obtain comments from the public and affected agencies. This proposed information collection was previously published in the
The Department of Justice encourages public comment and will accept input until July 23, 2018.
Written comments and/or suggestions regarding the item(s) contained in this notice, especially regarding the estimated public burden and associated response time should be directed to the Office of Management and Budget (OMB), Office of Regulatory Affairs, Attention: Department of Justice Desk Officer, Washington, DC 20503. Additionally, comments may be submitted to OMB via facsimile to (202) 395-7285.
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
—Evaluate whether the collection of information is necessary for the proper performance of the function of the agency, including whether the information will have practical utility;
—Evaluate the accuracy of the agency's estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;
—Evaluate whether and if so, how, the quality, utility, and clarity of the information to be collected can be enhanced; and
—Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology (
1.
2.
3. The agency form number and applicable component of the Department sponsoring the collection: The document has no agency form number. The applicable component within the Department of Justice is the Disability Rights Section, Civil Rights Division.
4. Affected public who will be asked to respond, as well as a brief abstract:
5. An estimate of the total number of respondents and the amount of time estimated for an average respondent to respond: 11,192 respondents per year at 0.75 hours per complaint form.
6. An estimate of the total public burden (in hours) associated with the collection: The estimated annual public burden associated with this collection is 8,394 hours, which is equal to 11,192 respondents * .75 hours.
If additional information is required contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, 3E.405A, Washington, DC 20530.
Employment and Training Administration (ETA), Labor.
Notice.
The Department of Labor (DOL or Department), as part of its continuing effort to reduce paperwork and respondent burden, conducts a preclearance consultation program to provide the public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995. This program helps ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed.
Currently, the Employment and Training Administration (ETA) is soliciting comments concerning the collection of data through Form ETA-9127,
Written comments must be submitted to the office listed in the addresses section below on or before August 20, 2018.
A copy of this information collection request (ICR), with applicable supporting documentation, including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge by contacting William W. Thompson, II, Administrator, Office of Foreign Labor Certification, telephone number: 202-513-7350 (this is not a toll-free number). Individuals with hearing or speech impairments may access the telephone number above via TTY by calling the toll-free Federal Information Relay Service at 1-877-889-5627 (TTY/TDD). Requests may also be made by fax at 202-513-7395 or by email at
Submit written comments about, or requests for a copy of, this ICR by mail or courier to the U.S. Department of Labor, Employment and Training Administration, Office of Foreign Labor Certification, Room 12-200, 200 Constitution Avenue NW, Washington, DC 20210; by email:
Under the foreign labor certification programs administered by ETA, SWAs are funded through annually reimbursable grants. These grants fund certain activities that support the processing of applications for temporary labor certification filed by U.S. employers in order to hire foreign workers in the H-2B or H-2A visa categories to perform nonagricultural or agricultural services or labor. Under the grant agreements, SWAs must review and transmit, through the intrastate and interstate systems, job orders submitted by employers in order to recruit U.S. workers prior to filling the job openings with foreign workers.
In order to effectively monitor the administration of foreign labor certification activities by the SWAs, the Department requires the SWAs to report their workloads related to these activities on a quarterly basis. This collection of information is conducted through Form ETA-9127,
The Department has proposed changes to the collection. Specifically, the Form ETA-9127 has been changed to capture information currently needed to make decisions on grant fund distribution.
Two questions were removed from Form ETA-9127. The first question removed referenced union contacts made by the SWA. This question was removed because this data is not currently reviewed by the grants management unit of ETA's OFLC. Union contacts are made by SWAs when the Chicago National Processing Center Certifying Officers have determined that the occupation or industry is traditionally or customarily unionized. In such circumstances, the Certifying Officer collects this information when confirming referrals with the SWAs during the certification process. Therefore, this information is available to the Department without engaging in this data collection. Continuing to collect such information would result in unwarranted data collection creating an undue burden on those filing the Form ETA-9127.
The second question removed is located in both the H-2A and H-2B sections, and prompts the SWA to list the most common deficiencies on the job order. The collection of this data is no longer needed because the Chicago NPC, which receives the job orders from the SWA, has addressed previously common deficiencies found on job orders in published
The Form ETA-9127 instructions have been modified in order to promote clarity because of some confusion expressed by the SWAs. Two terms, interstate and intrastate, have been segmented and defined in plain language to reduce this confusion and minimize the burden to the SWAs.
DOL is particularly interested in comments that:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• enhance the quality, utility, and clarity of the information to be collected; and
• minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments submitted in response to this comment request will be summarized and/or included in the request for OMB approval of the ICR; they will also become a matter of public record. Commenters are encouraged not to submit sensitive information (
Occupational Safety and Health Administration (OSHA), Labor.
Request for public comments.
OSHA solicits public comments concerning its proposal to obtain OMB approval of the information collection requirements specified by OSHA's Alliance Program.
Comments must be submitted (postmarked, sent, or received) by August 20, 2018.
Tom Mockler or Christie Garner, Directorate of Standards and Guidance, OSHA, U.S. Department of Labor, telephone: (202) 693-2222.
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent (
OSHA created the Alliance Program in 2002 as a structure for working with groups that are committed to worker safety and health. The program enables OSHA to enter into a voluntary, cooperative relationship at the national, regional, or area office level with industry, labor, and other groups to improve workplace safety and health; prevent workplace fatalities, injuries, and illnesses; and reach employers and workers that OSHA may not otherwise reach through its traditional methods. These groups include trade or professional organizations, businesses, unions, consulates, faith- and community-based organizations, and educational institutions. OSHA and the groups work together to share workplace safety and health information with workers and employers, encourage participation in OSHA initiatives, develop compliance assistance tools and resources, and educate workers and employers about their rights and responsibilities. Alliance Program participants do not receive exemptions from OSHA inspections or any other enforcement benefits.
OSHA collects information from organizations that are signatories to an Alliance agreement, known hereafter as “alliance participants.” Information is collected from the participants through meetings, informal conversations, and data forms to develop Alliance agreements, and to develop annual as well as program-wide reports.
Alliance participants work with OSHA to develop agreements with well-defined goals and specific objectives and activities. Agreements commonly identify specific hazard(s), operations, or other areas of concern; the targeted segment within the workforce; and the planned activities to meet the agreement's overarching goals and objectives. OSHA provides templates for Alliance agreements OSHA uses the information from the forms (national Alliance) and collaborative data gathering (Regional and Area Offices) to compile annual reports for individual Alliances and assess the effectiveness of the individual Alliance in meeting agreement goals and objectives. OSHA uses aggregate data from all active Alliances to assess the impact of the program as a whole in meeting the Agency's strategic plan goals and strategies related to outreach and communication.
OSHA has a particular interest in comments on the following issues:
• Whether the proposed information collection requirements are necessary for the proper performance of the Agency's functions, including whether the information is useful;
• The accuracy of OSHA's estimate of the burden (time and costs) of the information collection requirements, including the validity of the methodology and assumptions used;
• The quality, utility and clarity of the information collected; and
• Ways to minimize the burden on employers who must comply; for example, by using automated or other
This is an existing collection of information in use without an OMB number. The proposed ICR includes collection of information requirements for: (1) Alliance agreement development, (2) the biannual Alliance Data Reporting Form, and (3) annual reports. The burden hours for the information collection requirements contained in the proposed ICR would result in a total initial burden hour estimate of 2,210 hours.
The Agency will summarize the comments submitted in response to this notice and will include this summary in the request to OMB to approve these information collection requirements, and the associated templates and forms.
You may submit comments in response to this document as follows: (1) Electronically at
Because of security procedures, the use of regular mail may cause a significant delay in the receipt of comments. For information about security procedures concerning the delivery of materials by hand, express delivery, messenger, or courier service, please contact the OSHA Docket Office at (202) 693-2350, (TTY (877) 889-5627).
Comments and submissions are posted without change at
Information on using the
Loren Sweatt, Deputy Assistant Secretary of Labor for Occupational Safety and Health, directed the preparation of this notice. The authority for this notice is the Paperwork Reduction Act of 1995 (44 U.S.C. 3506
Millennium Challenge Corporation (MCC).
Notice of a new system of records.
MCC proposes to add a new system of records to its inventory of records systems subject to the Privacy Act of 1974, as amended. This action complies with the requirements of the Privacy Act to publish in the
This action will be applicable without further notice 30 days after date of publication in the
Send written comments to the Millennium Challenge Corporation, ATTN: Vincent T. Groh, Chief Information Officer, Department of Administration and Finance, 1099 Fourteenth Street NW, Suite 700, Washington, DC, 20005-3550.
Miguel G. Adams, Chief Information Security Officer and Deputy Privacy Officer, Millennium Challenge Corporation,
MCC is giving notice of a system of records pursuant to the Privacy Act of 1974 (5 U.S.C. 552a) for the MCC-Business Relations System (MCC-BRS). MCC utilizes MCC-BRS to provide automated processing of business transactions related MCC's mission of reducing global poverty through growth. MCC-BRS utilizes the Salesforce Government Cloud information system for collecting, storing, and processing the information. Various elements within MCC will utilize MCC-BRS for their business functions; they include the departments of Congressional and Public Affairs (CPA) Department, and the Department of Compact Operations (DCO). Business functions within DCO include the Finance, Investment and Trade (FIT), Environmental and Social Performance (ESP), and the Office of Strategic Partnerships (OSP).
Salesforce Government Cloud meets the federal government's objectives of cloud computing to reduce procurement and operating costs to the federal government. In addition, Salesforce Government Cloud meets the Federal Information Processing Standards Publication (FIPS)—200, Minimum Security Requirements for Federal Information and Information Systems as an authorized Federal Risk and Authorization Management Program (FedRAMP) information system. MCC utilizes MCC-BRS to achieve the following business objectives: 1. To create and maintain a system that optimizes MCC's ability to analyze, manage, engage, and grow external stakeholders; 2. To create and manage business engagement opportunities that promote MCC's mission in an organized and efficient manner; 3. To provide in person or online event management and communications campaigns for external stakeholder engagement; and 4. To provide the agency with the means to: track and manage future financial
MCC-001.
MCC-Business Relations System (MCC-BRS).
Unclassified.
Records in this system process information on international and domestic contracting firm owners and employees, small to medium business owners and employees; and other individuals that are contacts or leads for potential vendors.
The categories include: 1. Personally identifiable information (PII); such as, name, company name, job title, business address, business phone number, country or country region, email, and notes on a meeting or event; and 2. Meeting notes.
22 U.S.C. 7705, Chapter 84—Millennium Challenge.
MCC staff will use the system to collect, store, and process business contact information that will contain PII. The information collected achieves MCC's core functions of reducing global poverty through economic growth by aligning business contacts with MCC's mission. The PII information collected is similar to the information on a business card. Using a customer relations management (CRM) increases accuracy and business efficiencies. In addition, MCC will utilize the system to process, store, and retain personal notations on meeting or business events. Personal notations can include information that promotes efficiencies in previous contact meetings, discussions, or events that have transpired in the past. Additionally, the system utilizes encrypted links to provide efficiencies in communications campaigns through mass email distribution, and event engagement opportunities to event attendees, or vendor groups.
In addition to those disclosures generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, all or a portion of the records or information contained in this system may be disclosed to authorized entities, as determined to be relevant and necessary, outside MCC as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
• Financial project monitoring or collections;
• Due diligence background checks and screening;
• Litigation or arbitration purposes;
• Outside organizations contracted with OPIC for specific authorized activities;
• National Archives and Records Administration (NARA) for records management purposes;
• Contractors, interns, and government detailed personnel to perform OPIC authorized activities;
• Audits and oversight;
• Congressional inquiries;
• Investigations of potential violations of law.
This system is electronically stored in a government cloud service centrally located at a Salesforce GSA data center.
MCC safeguards the information in accordance with applicable laws, rules and policies, including the Federal Information Security Modernization Act of 2014; OMB Circular A-130, Management of Federal Resources; Federal Risk and Authorization Management Program (FedRAMP); and MCC policies and procedures. MCC protects records from unauthorized access through appropriate administrative, physical, and technical safeguards. These safeguards include restricting access to authorized personnel who have need-to-know, and the process of authentication using user identifications (IDs) and passwords that function as an identity and authentication method of access. Personnel with authorized access to the system have received training in the proper handling of Privacy Act information and in information security requirements for both paper copies and electronically stored information.
MCC retains records in accordance with the National Archives and Records Administration (NARA), General Records Schedule (GRS).
Records are retrievable by personal name, project name, or a combination of search functions available in the Salesforce CRM tool.
Jason Bauer, Director of Finance, Investment and Trade (FIT), Department of Compact Operations, 1099 Fourteenth Street NW, Suite 700, Washington, DC, 20005-3550.
Individuals seeking knowledge of the system's records must submit a written request to the MCC Privacy Officer, at the above mailing address, clearly marked as “Privacy Act Request” on the envelope and letter. The request must include the requestor's full name, current address, the name or number of the system to be searched, and if possible, the record identification number. The request must be signed by either notarized signature or by signature under penalty of perjury under 28 U.S.C. 1746.
Same as notification procedures.
Same as the notification procedure above; the request should also clearly and concisely describe the information contested, the reasons for contesting it, and the proposed amendment sought, pursuant to 45 CFR 5b.7.
The federal employee collects and imports the contact information or event information directly to the system. Additionally, the
None.
The National Science Board, pursuant to NSF regulations (45 CFR part 614), the National Science Foundation Act, as amended (42 U.S.C. 1862n-5), and the Government in the Sunshine Act (5 U.S.C. 552b), hereby gives notice of
Open meeting of the Executive Committee of the National Science Board, to be held Friday, June 22, 2018, from 4:00-5:00 p.m. EDT.
This meeting will be held by teleconference at the National Science Foundation, 2415 Eisenhower Ave., Alexandria, VA 22314.
Open.
Committee Chair's Opening Remarks; approval of Executive Committee Minutes of April 2, 2018; discuss issues and topics for an agenda of the NSB Meeting scheduled for July 17-18, 2018.
Point of contact for this meeting is: James Hamos, 2415 Eisenhower Ave., Alexandria, VA 22314. Telephone: (703) 292-8000.
You may find meeting information and updates (time, place, subject matter or status of meeting) at
An audio listening line will be available for the public. Members of the public must contact the Board Office to request the number by sending an email to
National Science Foundation.
Notice of permit applications received.
The National Science Foundation (NSF) is required to publish a notice of permit applications received to conduct activities regulated under the Antarctic Conservation Act of 1978. NSF has published regulations under the Antarctic Conservation Act in the Code of Federal Regulations. This is the required notice of permit applications received.
Interested parties are invited to submit written data, comments, or views with respect to this permit application by July 23, 2018. This application may be inspected by interested parties at the Permit Office, address below.
Comments should be addressed to Permit Office, Office of Polar Programs, National Science Foundation, 2415 Eisenhower Avenue, Alexandria, Virginia 22314.
Nature McGinn, ACA Permit Officer, at the above address, 703-292-8030, or
The National Science Foundation, as directed by the Antarctic Conservation Act of 1978 (Pub. L. 95-541, 45 CFR 670), as amended by the Antarctic Science, Tourism and Conservation Act of 1996, has developed regulations for the establishment of a permit system for various activities in Antarctica and designation of certain animals and certain geographic areas a requiring special protection. The regulations establish such a permit system to designate Antarctic Specially Protected Areas.
1.
Ron Naveen, Oceanites, Inc., PO Box 15259, Chevy Chase, MD 20825.
Pension Benefit Guaranty Corporation.
Notice of intent to request OMB approval.
The Pension Benefit Guaranty Corporation (PBGC) intends to request that OMB approve, under the Paperwork Reduction Act, a survey of terminated and insolvent multiemployer pension plans to obtain withdrawal liability information. PBGC needs the withdrawal liability information to estimate its multiemployer program liabilities for purposes of its financial statements. This notice informs the public of PBGC's intent and solicits public comment on the collection of information.
Comments should be submitted by August 20, 2018.
Comments may be submitted by any of the following methods:
•
•
•
All submissions received must include the agency's name (Pension Benefit Guaranty Corporation, or PBGC) and refer to the Withdrawal Liability Survey. All comments received will be posted without change to PBGC's website,
Hilary Duke, Assistant General Counsel for Regulatory Affairs, Office of the General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street NW, Washington, DC 20005-4026, 202-326-4400, extension 3839. TTY users may call the Federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4400, extension 3839.
When a contributing employer withdraws from an underfunded multiemployer pension plan, the plan sponsor assesses withdrawal liability against the employer. The plan sponsor is required to determine and collect withdrawal liability in accordance with section 4219 of the Employee Retirement Income Security Act of 1974 (ERISA). The plan sponsor assesses withdrawal liability by issuing a notice to an employer, including the amount of the employer's liability and a schedule of payments. PBGC's regulation on Notice, Collection, and Redetermination of Withdrawal Liability (29 CFR part 4219) requires the plan sponsor to file with PBGC a certification that notices have been provided to employers.
PBGC is proposing to collect information about withdrawal liability that is owed by withdrawn employers of terminated
The survey would be sent to approximately 65 plans.
PBGC intends to request that OMB approve PBGC's use of this survey for three years. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
PBGC is soliciting public comments to—
• Evaluate whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
The Presidio Trust.
Notice of public meeting.
In accordance with the Presidio Trust Act, and in accordance with the Presidio Trust's bylaws, notice is hereby given that a public meeting of the Presidio Trust Board of Directors will be held commencing 4:30 p.m. on July 25, 2018, at the Officers' Club, 50 Moraga Avenue, Presidio of San Francisco, California.
The purposes of this meeting are: To provide the Board Chair's report; to provide the Chief Executive Officer's report; to receive selected presentations of concept proposals for development of the Fort Scott site; to receive public comment on the selected concept proposals for the Fort Scott site; to consider and potentially select which proposers will be invited to respond to a Request for Proposal for the Fort Scott site; and to receive public comment on other matters pertaining to Trust business.
Individuals requiring special accommodation at this meeting, such as needing a sign language interpreter, should contact Mollie Matull at 415-561-5300 prior to July 18, 2018.
The meeting will begin at 4:30 p.m. on July 25, 2018.
The meeting will be held at the Officers' Club, 50 Moraga Avenue, Presidio of San Francisco.
Nancy J. Koch, General Counsel, the Presidio Trust, 103 Montgomery Street, P.O. Box 29052, San Francisco, California 94129-0052, Telephone: 415-561-5300.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend its Fees Schedule. The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend its fees for Network Access Ports used for Disaster Recovery, effective June 1, 2018. Currently, the Exchange assesses $250 per port, per month for 1 gigabit (Gbps) and 10 Gbps Network Access Ports that connect to the Exchange's Disaster Recovery Systems in Chicago (“Disaster Recovery Ports”). The Exchange proposes to increase its fees for Disaster Recovery Ports. Specifically, the Exchange proposes to assess a monthly fee of $2,000 per 1 Gbps Disaster Recovery Port and a monthly fee of $6,000 per 10 Gbps Disaster Recovery Port. This amount will continue to enable the Exchange to maintain the Disaster Recovery Ports in case they become necessary. The Exchange notes that the Disaster Recovery Ports may now also be used to access the Disaster Recovery Systems for the following affiliate exchanges: Cboe BZX Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe C2 Exchange, Inc., Cboe BYX Exchange, Inc. and Cboe Futures Exchange, LLC (“Affiliated Exchanges”). The Exchange proposes to provide that market participants will only be assessed a single fee for any Disaster Recovery Port that also accesses the Disaster Recovery Systems for these exchanges.
Lastly, the Exchange notes that the Fees Schedule currently provides that separate Network Access Port fees are assessed for unicast (orders, quotes) and multicast (market data) connectivity and includes a parenthetical that clarifies that “if a TPH uses the 1 Gbps Disaster Recovery Network Access Port for unicast and multicast connectivity, the TPH will be charged $500 per month”. The exchange notes that certain Network Access Ports that connect to the Disaster Recovery Systems are able to receive both multicast and unicast traffic, whereas other Network Access Ports can only receive one type of connectivity each (thus requiring a market participants to maintain two ports if that market participant desires both types of connectivity). Accordingly, market participants are currently assessed fees based on connectivity (
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
The Exchange believes the proposed fee increase is reasonable because it will assist the Exchange in recouping costs associated with maintaining its Disaster Recovery Ports and Disaster Recovery Systems in case of necessity. The Exchange also notes that it hasn't amended the fee amount since it adopted the fee in 2012.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed change applies uniformly to all market participants. The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Market participants may opt to disfavor the Exchange's pricing if they believe that alternatives offer them better value. Further, excessive fees for connectivity would serve to impair an exchange's ability to compete for order flow rather than burdening competition.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to make permanent Rule 107C, which sets forth the Exchange's pilot Retail Liquidity Program. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to make permanent Rule 107C, which sets forth the Exchange's pilot Retail Liquidity Program (the “Program”). In support of the proposal to make the pilot Program permanent, the Exchange believes it is appropriate to provide background on the Program and an analysis of the economic benefits for retail investors and the marketplace flowing from operation of the Program.
In July 2012, the Commission approved the Program on a pilot basis.
The Exchange established the Program to attract retail order flow to the Exchange, and allow such order flow to receive potential price improvement.
As described in greater detail below, under Rule 107C, a new class of market participant called Retail Liquidity Providers (“RLPs”)
In approving the pilot, the Commission concluded that the Program was reasonably designed to benefit retail investors by providing price improvement opportunities to retail order flow. Further, while the Commission noted that the Program would treat retail order flow differently from order flow submitted by other market participants, such segmentation would not be inconsistent with Section 6(b)(5) of the Act,
As discussed below, the Exchange believes that the Program data supports these conclusions and that it is therefore appropriate to make the pilot Program permanent.
Rule 107C(a) contains the following definitions:
• First, the term “Retail Liquidity Provider” is defined as a member organization that is approved by the Exchange under the Rule to act as such and to submit Retail Price Improvement Orders in accordance with the Rule.
• Second, the term “Retail Member Organization” (“RMO”) is defined as a member organization (or a division thereof) that has been approved by the Exchange to submit Retail Orders.
• Third, the term “Retail Order” means an agency order or a riskless principal order meeting the criteria of FINRA Rule 5320.03 that originates from a natural person and is submitted to the Exchange by a RMO, provided that no change is made to the terms of the order with respect to price or side of market and the order does not originate from a trading algorithm or any other computerized methodology. A Retail Order is an Immediate or Cancel Order and may be an odd lot, round lot, or partial round lot (“PRL”).
• Finally, the term “Retail Price Improvement Order” means nondisplayed interest in NYSE-listed securities that is better than the best protected bid (“PBB”) or best protected offer (“PBO”) by at least $0.001 and that is identified as a Retail Price Improvement Order in a manner prescribed by the Exchange.
Under Rule 107C(b), any member organization
An RMO must have written policies and procedures reasonably designed to assure that it will only designate orders as Retail Orders if all requirements of a Retail Order are met. Such written policies and procedures must require the member organization to (i) exercise due diligence before entering a Retail Order to assure that entry as a Retail Order is in compliance with the requirements of Rule 107C, and (ii) monitor whether orders entered as Retail Orders meet the applicable requirements. If the RMO represents Retail Orders from another broker-dealer customer, the RMO's supervisory procedures must be reasonably designed to assure that the orders it receives from such broker-dealer customer that it designates as Retail Orders meet the definition of a Retail Order. The RMO must (i) obtain an annual written representation, in a form acceptable to the Exchange, from each broker-dealer customer that sends it orders to be designated as Retail Orders that entry of such orders as Retail Orders will be in compliance with the requirements of this rule, and (ii) monitor whether its broker-dealer customer's Retail Order flow continues to meet the applicable requirements.
Following submission of the required materials, the Exchange provides written notice of its decision to the member organization.
To qualify as an RLP under Rule 107C(c), a member organization must: (1) Already be approved as a Designated Market Maker (“DMM”) or Supplemental Liquidity Provider (“SLP”); (2) demonstrate an ability to meet the requirements of an RLP; (3) have mnemonics or the ability to accommodate other Exchange-supplied designations that identify to the Exchange RLP trading activity in assigned RLP securities; and (4) have adequate trading infrastructure and technology to support electronic trading.
Under Rule 107C(d), to become an RLP, a member organization must submit an RLP application form with all supporting documentation to the Exchange, which would determine whether an applicant was qualified to become an RLP as set forth above.
If an applicant were approved by the Exchange to act as an RLP, the applicant would be required to establish connectivity with relevant Exchange systems before the applicant would be permitted to trade as an RLP on the Exchange.
An RLP would be permitted to withdraw its status as an RLP by giving notice to the Exchange under proposed NYSE Rule107C(e). The withdrawal would become effective when those securities assigned to the withdrawing RLP are reassigned to another RLP. After the Exchange receives the notice of withdrawal from the withdrawing RLP, the Exchange would reassign such securities as soon as practicable, but no later than 30 days after the date the notice is received by the Exchange. If the reassignment of securities takes longer than the 30-day period, the withdrawing RLP would have no further obligations and would not be held responsible for any matters concerning its previously assigned RLP securities.
Under Rule 107C(f), an RLP may only enter Retail Price Improvement Orders electronically and directly into Exchange systems and facilities designated for this purpose and only for the securities to which it is assigned as RLP. An RLP entering Retail Price Improvement Orders in securities to which it is not assigned is not required to satisfy these requirements.
In order to be eligible for execution fees that are lower than non-RLP rates, an RLP must maintain (1) a Retail Price Improvement Order that is better than the PBB at least five percent of the trading day for each assigned security; and (2) a Retail Price Improvement Order that is better than the PBO at least five percent of the trading day for each assigned security.
• The “Daily Bid Percentage,” calculated by determining the percentage of time an RLP maintains a Retail Price Improvement Order with respect to the PBB during each trading day for a calendar month;
• The “Daily Offer Percentage,” calculated by determining the percentage of time an RLP maintains a Retail Price Improvement Order with respect to the PBO during each trading day for a calendar month;
• The “Monthly Average Bid Percentage,” calculated for each RLP security by summing the security's “Daily Bid Percentages” for each trading day in a calendar month then dividing the resulting sum by the total number of trading days in such calendar month; and
• The “Monthly Average Offer Percentage,” calculated for each RLP security by summing the security's “Daily Offer Percentage” for each trading day in a calendar month and then dividing the resulting sum by the total number of trading days in such calendar month.
Finally, only Retail Price Improvement Orders would be used when calculating whether an RLP is in compliance with its five-percent requirements.
The five-percent requirement is not applicable in the first two calendar months a member organization operates as an RLP and takes effect on the first day of the third consecutive calendar month the member organization operates as an RLP.
Rule 107C(g) addresses the consequences of an RLP's failure to meet its requirements. If, after the first two months an RLP acted as an RLP, an RLP fails to meet any of the Rule 107C(f) requirements for an assigned RLP security for three consecutive months, the Exchange could, in its discretion, take one or more of the following actions:
• Revoke the assignment of any or all of the affected securities from the RLP;
• revoke the assignment of unaffected securities from the RLP; or
• disqualify the member organization from its status as an RLP.
The Exchange determines if and when a member organization is disqualified from its status as an RLP. One calendar month prior to any such determination, the Exchange notifies an RLP of such impending disqualification in writing. When disqualification determinations are made, the Exchange provides a written disqualification notice to the member organization.
Rule 107C(h) addresses an RMO's failure to abide by Retail Order requirements. If an RMO designates orders submitted to the Exchange as Retail Orders and the Exchange determines, in its sole discretion, that those orders fail to meet any of the requirements of Retail Orders, the Exchange may disqualify a member organization from its status as an RMO.
Rule 107C(i) describes the appeal rights of member organizations. A member organization that disputes the Exchange's decision to disapprove it under Rule 107C(b) or (d) or disqualify it under Rule 107C(g) or (h) may request, within five business days after notice of the decision is issued by the Exchange, that a Retail Liquidity Program Panel (“RLP Panel”) review the decision to determine if it was correct.
Under Rule 107C(j), the Exchange disseminates an identifier through proprietary Exchange data feeds or the Securities Information Processor (“SIP”) when RPI interest priced at least $0.001 better than the PBB or PBO for a
Under Rule 107C(k), an RMO can designate how a Retail Order would interact with available contra-side interest as follows:
• A Type 1-designated Retail Order interacts only with available contra-side Retail Price Improvement Orders and MPL Orders but would not interact with other available contra-side interest in Exchange systems or route to other markets. The portion of a Type 1- designated Retail Order that does not execute against contra-side Retail Price Improvement Orders would be immediately and automatically cancelled.
• A Type 2-designated Retail Order interacts first with available contra-side Retail Price Improvement Orders and MPL Orders and any remaining portion of the Retail Order would be executed as a Regulation NMS-compliant Immediate or Cancel Order pursuant to Rule 13.
• A Type 3-designated Retail Order interacts first with available contra-side Retail Price Improvement Orders and MPL Orders and any remaining portion of the Retail Order would be executed as an NYSE Immediate or Cancel Order pursuant to Rule 13.
Under Rule 107C(l), Retail Price Improvement Orders in the same security are ranked and allocated according to price then time of entry into Exchange systems. When determining the price to execute a Retail Order, Exchange systems consider all eligible RPIs and MPL Orders. If the only interest is RPIs, then the executions shall occur at the price level that completes the incoming order's execution. If the only interest is MPL Orders, the Retail Order shall execute at the midpoint of the PBBO. If both RPIs and MPL Orders are present, Exchange systems will evaluate at what price level the incoming Retail Order may be executed in full (“clean-up price”). If the clean-up price is equal to the midpoint of the PBBO, RPIs will receive priority over MPL Orders, and the Retail Order will execute against both RPIs and MPL Orders at the midpoint. If the clean-up price is worse than the midpoint of the PBBO, the Retail Order will execute first with the MPL Orders at the midpoint of the PBBO and any remaining quantity of the Retail Order will execute with the RPIs at the clean-up price. If the clean-up price is better than the midpoint of the PBBO, then the Retail Order will execute against the RPIs at the clean-up price and will ignore the MPL Orders. Any remaining unexecuted RPI interest and MPL Orders will remain available to interact with other incoming Retail Orders. Any remaining unexecuted portion of the Retail Order will cancel or execute in accordance with Rule 107C(k).
Examples of priority and order allocation are as follows:
Example 1:
PBBO for security ABC is $10.00-$10.05.
RLP 1 enters a Retail Price Improvement Order to buy ABC at $10.01 for 500.
RLP 2 then enters a Retail Price Improvement Order to buy ABC at $10.02 for 500.
RLP 3 then enters a Retail Price Improvement Order to buy ABC at $10.03 for 500.
An incoming Retail Order to sell ABC for 1,000 executes first against RLP 3's bid for 500, because it is the best priced bid, then against RLP 2's bid for 500, because it is the next best priced bid. RLP 1 is not filled because the entire size of the Retail Order to sell 1,000 is depleted. The Retail Order executes at the price that completes the order's execution. In this example, the entire 1,000 Retail Order to sell executes at $10.02 because it results in a complete fill.
However, assume the same facts above, except that RLP 2's Retail Price Improvement Order to buy ABC at $10.02 is for 100. The incoming Retail Order to sell 1,000 executes first against RLP 3's bid for 500, because it is the best priced bid, then against RLP 2's bid for 100, because it is the next best priced bid. RLP 1 then receives an execution for 400 of its bid for 500, at which point the entire size of the Retail Order to sell 1,000 is depleted. The Retail Order executes at the price that completes the order's execution, which is $10.01.
Example 2:
PBBO for security DEF is $10.00-10.01.
RLP 1 enters a Retail Price Improvement Order to buy DEF at $10.006 for 500.
RLP 2 enters a Retail Price Improvement Order to buy DEF at $10.005 for 500.
MPL 1 enters an MPL Order to buy DEF at $10.01 for 1,000.
RLP 3 enters a Retail Price Improvement Order to buy DEF at $10.002 for 1,000.
An incoming Retail Order to sell DEF for 2,500 arrives. The clean-up price is $10.002. Because the midpoint of the PBBO is priced better than the clean-up price, the Retail Order executes with MPL 1 for 1,000 shares at $10.005. The Retail Order then executes at $10.002 against RLP 1's bid for 500, because it is the best-priced bid, then against RLP 2's bid for 500 because it is the next best-priced bid and then RLP 3 receives an execution for 500 of its bid for 1,000, at which point the entire size of the Retail Order to sell 2,500 is depleted.
Assume the same facts above. An incoming Retail Order to sell DEF for 1,000 arrives. The clean-up price is $10.005. Because the clean-up price is equal to the midpoint of the PBBO, RPIs will receive priority over MPL Orders. As a result, the Retail Order executes first against RLP 1's bid for 500, because it is the best-priced bid, then against RLP 2's bid for 500 because it is the next best-priced bid, at which point the entire size of the Retail Order to sell 1,000 is depleted.
In approving the Program on a pilot basis, the Commission required the Exchange to “monitor the scope and operation of the Program and study the data produced during that time with respect to such issues, and will propose any modifications to the Program that may be necessary or appropriate.”
In the RLP Approval Order, the Commission observed that the Program could promote competition for retail order flow among execution venues, and that this could benefit retail investors by creating additional price improvement
Between August 1, 2012, when the Program began, and January 2, 2018, orders totaling in excess of 6.8 billion shares were executed through the Program, providing retail investors with $12.3 million in price improvement. As Table 1 shows, during 2016, an average of 2-3 million shares per day was executed in the Program. In 2017, an average of 3-4 million shares per day were executed in the Program. During the period 2016-17, average effective spreads in RLP executions ranged between $0.012 and $0.019. Fill rates reached as high as 25.7% in May 2018. Overall price improvement averaged $0.0014 per share, approximately 40% above the minimum of $0.001.
As Table 2 shows, approximately 45% of all orders in the Program in 2016-17 were for a round lot or fewer shares. More than 60% of retail orders removing liquidity from the Exchange were for 300 shares or less. Further, the number of very large orders was relatively steady, with orders larger than 7,500 shares typically accounting for 4-5% of orders received. Despite relatively low fill rates, large orders account for a sizable portion of the shares executed in the Program.
Tables 3 and 4 show the distribution of orders received by size and shares executed in 2016-17. During that period, the Program saw much lower execution sizes due to smaller retail providing orders (typically around 300 shares) breaking up fills and as a result of liquidity at multiple price improvement points.
As Table 5 shows, during 2016-17, fill rates trended near 80% for orders up to 300 shares, while the average shares available at the inside was 300 shares. Data published to the SIP indicates when liquidity is available for retail
Table 6 shows the development of orders sizes received in the Program over time. Orders adding liquidity to the Exchange averaged in the mid-300 share range for most of the Program's recent history, although the median size has increased since August 2016. (The Exchange notes that the median order size is the average of the daily median order sizes across all orders received on a trade date for NYSE symbols.) After averaging near 2,000 shares at times, the size of retail orders removing liquidity from the Exchange has dropped over time, with median sizes periodically exceeding 300 shares. The slightly smaller take order sizes helps explain the better overall fill rates and improved effective spreads in the Program's recent history. However, as shown by the occasional oversized orders, there remains ample liquidity and opportunity in the Program to satisfy liquidity takers with meaningful price improvement.
Although the Program provides the opportunity to achieve significant price improvement, the Program has not generated significant activity. As Table 7 shows, the average daily volume for the Program has hovered in the three to four million share range, and has accounted for less than 0.1% of consolidated NYSE-listed volume in 2016-17. The Program's share of NYSE volume during that period was below 0.4%. Moreover, no symbol during the past two years achieved as much as 1.6% of their consolidated average daily volume (“CADV”) in the Program, and all of the highest share symbols are low volume securities. As Table 2 shows, during the 2016-2017 period, only 1.0% of all day/symbol pairs exceeded 5% share of CADV, with another 8.2% of day/symbol pairs achieving a share of CADV between 1% and 5%. Fully 75% of all day/symbol pairs exhibited RLP share of 0.25% or less during that time. For ticker symbols that traded at least 100 days during the two-year period, more than half of all symbols over that period had less than 0.10% of their consolidated volume executed in the program, and 96% less than 0.50%. The Program's share of the total market in NYSE-listed securities is tiny considering that non-ATS activity in the U.S. equity markets, based on FINRA transparency data and NYSE Trade and Quote (“TAQ”) volume statistics, is estimated to be approximately 20-25% of all U.S. equity volume. In short, the Program represents a minor participant in the overall market to price improve marketable retail order flow. While participation was low, as noted above, retail investors that participated in the Program received price improvement on their orders, which was one of the stated goals of the Program. The NYSE therefore believes that the pilot data supports making the Program permanent.
Moreover, beyond providing a meaningful price improvement to retail investors through a competitive and transparent pricing process unavailable in non-exchange venues, the data collected during the Program supports the conclusion that the Program has not had any significant negative market impact. As set forth in Table 8, the Exchange measured the correlation between several critical market quality statistics and either RLP share of CADV, shares posted dark by providers seeking to interact with retail orders or the amount of time during the trading day that RLP liquidity was available. The correlations the Exchange measured were levels, not changes. As a result, fairly high correlation coefficients should suggest that the Program had a meaningful impact on the statistics. In no case did the Exchange observe a single correlation greater than an absolute value of 0.15, and even at the 90th percentile of all symbols, there was no correlation of even 0.30. In short, there was no measure the Exchange studied supporting the conclusion that the Program had any noticeable impact on market quality.
The Exchange believes that the Program was a positive experiment in attracting retail order flow to a public exchange. The order flow the Program attracted to the Exchange provided tangible price improvement to retail investors through a competitive pricing process unavailable in non-exchange venues. As such, despite the low volumes, the Exchange believes that the Program satisfied the twin goals of attracting retail order flow to the Exchange and allowing such order flow to receive potential price improvement. Moreover, the Exchange believes that the data collected during the Program supports the conclusion that the Program's overall impact on market
The Exchange notes that the proposed change is not otherwise intended to address any other issues and the Exchange is not aware of any problems that member organizations would have in complying with the proposed rule change.
The Exchange believes the proposed rule change is consistent with the requirements of Section 6(b) of the Act,
The Exchange believes the proposal is consistent with these principles because it seeks to make permanent a pilot and associated rule changes that were previously approved by the Commission as a pilot for which the Exchange has subsequently provided data and analysis to the Commission, and that this data and analysis, as well as the further analysis in this filing, shows that the Program has operated as intended and is consistent with the Act. The Exchange also believes that the proposed rule change is consistent with these principles because it would increase competition among execution venues, encourage additional liquidity, and offer the potential for price improvement to retail investors.
The Exchange also believes the proposed rule change is designed to facilitate transactions in securities and to remove impediments to, and perfect the mechanisms of, a free and open market and a national market system because making the Program permanent would attract retail order flow to a public exchange and allow such order flow to receive potential price improvement. The data provided by the Exchange to the Commission staff demonstrates that the Program provided tangible price improvement to retail investors through a competitive pricing process unavailable in non-exchange venues and otherwise had an insignificant impact on the marketplace. The Exchange believes that making the Program permanent would encourage the additional utilization of, and interaction with, the NYSE and provide retail customers with an additional venue for price discovery, liquidity, competitive quotes, and price improvement. For the same reasons, the Exchange believes that making the Program permanent would promote just and equitable principles of trade and remove impediments to and perfect the mechanism of a free and open market.
Finally, the Exchange believes that it is subject to significant competitive forces, as described below in the Exchange's statement regarding the burden on competition. For these reasons, the Exchange believes that the proposal is consistent with the Act.
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that making the Program permanent would continue to promote competition for retail order flow among execution venues. The Exchange believes that the data supplied to the Commission and experience gained over nearly six years have demonstrated that the Program creates price improvement opportunities for retail orders that are equal to what would be provided under OTC internalization arrangements, thereby benefiting retail investors and increasing competition between execution venues. The Exchange also believes that making the Program permanent will promote competition between execution venues operating their own retail liquidity programs. Such competition will lead to innovation within the market, thereby increasing the quality of the national market system. Finally, the Exchange notes that it operates in a highly competitive market in which market participants can easily direct their orders to competing venues, including off-exchange venues. In such an environment, the Exchange must continually review, and consider adjusting the services it offers and the requirements it imposes to remain competitive with other U.S. equity exchanges.
For the reasons described above, the Exchange believes that the proposed rule change reflects this competitive environment.
No written comments were solicited or received with respect to the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange filed a proposal to amend its fees and rebates applicable to Members
The text of the proposed rule change is available at the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to implement proposed changes to its fee schedule relating to physical connectivity fees, effective June 1, 2018. By way of background, a physical port is utilized by a Member or non-Member to connect to the Exchange at the data centers where the Exchange's servers are located. The Exchange currently maintains a presence in two third-party data centers: (i) The primary data center where the Exchange's business is primarily conducted on a daily basis, and (ii) a secondary data center, which is predominantly maintained for business continuity purposes. The Exchange currently assesses the following physical connectivity fees for Members and non-Members on a monthly basis: $2,000 per physical port for a 1 gigabyte circuit and $7,000 per physical port for a 10 gigabyte circuit. The Exchange proposes to increase the fees per physical ports from (i) $2,000 to $2,500 per month, per port for a 1 gigabyte circuit and (ii) $7,000 to $7,500 per month, per port for a 10 gigabyte circuit. The Exchange notes the proposed fees enable it to continue to maintain and improve its market technology and services and also notes that the proposed fee changes are in line with the amounts assessed by other exchanges for similar connections.
The Exchange also proposes to adopt separate physical port fees for connection to its secondary data center, which is predominantly maintained for business continuity purposes (“Disaster Recovery Systems”). Particularly, the Disaster Recovery Systems can be accessed via physical ports in Chicago. Members and Non-Members may maintain physical ports in order to be able to connect to the Disaster Recovery Systems in case of a disaster. Currently, physical ports that are used to connect to the Disaster Recovery Systems are assessed the same fees as physical ports used to connect to the Exchange's trading system. The Exchange proposes to establish separate pricing for physical ports that are used to connect to the Disaster Recovery Systems (“Disaster Recovery Physical Ports”). Specifically, the Exchange proposes to assess a monthly fee of $2,000 per 1 gigabyte Disaster Recovery Physical Port and a monthly fee of $6,000 per 10 gigabyte Disaster Recovery Physical Port. This amount will continue to enable the Exchange to maintain the Disaster Recovery Physical Ports in case they become necessary. The Exchange notes that the Disaster Recovery Physical Ports may also be used to access the Disaster Recovery Systems for the following affiliate exchanges Cboe BZX Exchange, Inc., Cboe BYX Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe C2 Exchange, Inc., Cboe Exchange, Inc. and Cboe Futures Exchange, LLC as well. The Exchange proposes to provide that market participants will only be assessed a single fee for any Disaster Recovery Physical Port that also accesses the Disaster Recover Systems for these exchanges.
The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,
The Exchange believes that the proposed changes are equitable and non-discriminatory in that it applies uniformly to all Members. Members and non-Members will continue to choose whether they want more than one physical port and/or Disaster Recovery Physical Port and choose the method of connectivity based on their specific needs. All Members that voluntarily select various service options will be charged the same amount for the same services.
The Exchange believes that the proposal represents an equitable allocation of reasonable dues, fees, and other charges as its fees for physical connectivity are reasonably constrained by competitive alternatives. If a particular exchange charges excessive fees for connectivity, affected Members and non-Members may opt to terminate their connectivity arrangements with that exchange, and adopt a possible range of alternative strategies, including routing to the applicable exchange through another participant or market center or taking that exchange's data indirectly. Accordingly, if the Exchange charges excessive fees, it would stand to lose not only connectivity revenues but also revenues associated with the execution of orders routed to it, and, to the extent applicable, market data revenues. The Exchange believes that this competitive dynamic imposes powerful restraints on the ability of any exchange to charge unreasonable fees for connectivity.
Furthermore, the proposed rule change is also an equitable allocation of reasonable dues, fees, and other charges as the Exchange believes that the proposed increased physical port fees will enable it to cover its infrastructure costs associated with establishing physical ports to connect to the Exchange's systems. The additional revenue from the increased fees will also enable the Exchange to continue to maintain and improve its market technology and services. Similarly, the Exchange believes the proposed fees for the Disaster Recovery Physical Ports will allow the Exchange to maintain the Disaster Recovery Physical Ports in case they become necessary.
Lastly, the Exchange believes the fees remain competitive with those charged by other venues and therefore continue to be reasonable and equitably allocated to Members.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. As discussed above, the Exchange believes that fees for connectivity are constrained by the robust competition for order flow among exchanges and non-exchange markets. The Exchange does not believe that the proposed changes represent a significant departure from previous pricing offered by the Exchange or pricing offered by the Exchange's competitors. Additionally, Members may opt to disfavor the Exchange's pricing if they believe that alternatives offer them better value. Further, excessive fees for connectivity would serve to impair an exchange's ability to compete for order flow rather than burdening competition.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from Members or other interested parties.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On November 30, 2017, Banque Centrale de Compensation, which conducts business under the name LCH SA (“LCH SA”), filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
As a “covered clearing agency,”
LCH SA's RP seeks to maintain the continuity of critical services in times of extreme stress and to facilitate the recovery of LCH SA from such stress. In particular, the RP describes (i) the scenarios and triggers for initiating recovery measures; (ii) various recovery tools used in such recovery; and (iii) the governance framework for managing the RP. Each of those aspects of the RP are discussed in more detail below.
The scenarios that could necessitate the implementation of the RP include the default of one or more clearing members, liquidity shortfalls as a result of the default of an investment counterparty of LCH SA or any other investment losses resulting from changes in the market value on the investments, a loss resulting from an event which impacts the critical services provided by LCH SA (
The default management process is used to re-establish a matched book and return to business as usual and therefore LCH SA considers it to be a recovery tool.
When pre-funded resources have been exhausted after a clearing member default, LCH SA can call a default fund assessment up to a cap, request voluntary payments from all non-defaulting members, and effectuate service closure.
In the event of a liquidity shortfall, LCH SA may use its central bank credit line to deposit securities received on behalf of defaulting clearing members and obtain liquidity.
For most investment, business, and operational losses, LCH SA can allocate
The RP discusses the governance surrounding its creation, invocation, and operation.
The Default Management Group is responsible for the management of clearing member defaults while all critical decisions are escalated and submitted to the LCH SA Default Crisis Management Team (“DCMT”).
The management of non-clearing member events will vary based on the nature of the event.
In the event a recovery is not successful, LCH SA would invoke its WDP to wind down its operations to full service closure in an orderly manner, thereby minimizing the disruption to clearing members, market participants, and the broader financial system. The WDP would be triggered after a determination by the LCH SA Board that all the recovery tools have been exhausted and have failed to return LCH SA to business as usual.
The decision to wind down would be taken by the Board and ultimately the LCH SA shareholders, upon advice of the Executive Risk Committee and Local Management Committee (“LMC”).
The WDP assumes that LCH SA's businesses would be wound down until full closure, including the closure of all its business lines at the same time.
The WDP provides that LCH SA would publish written notice to the clearing members that a wind-down event has occurred and potential dates by which transactions will no longer be accepted for clearing.
In line with the RP, the WDP describes the functions of LCH SA and distinguishes critical functions that LCH SA provides to the market (all of LCH SA's clearing functions are considered critical); services that are critical to the support of LCH SA's critical functions (such as IT, risk, operations, and collateral and risk management); and non-critical support functions (such as finance, legal, and human resources). The WDP then provides detail about the closure of these functions. For instance, the treasury function would close once all clearing services have ceased and monies are paid by LCH SA and its members.
The WDP further notes that LCH SA's contractual agreements with third-party service providers, such as information technology or venue providers, contain wind-down provisions that permit LCH SA to exit the agreements under particular conditions.
Separately from the WDP, but in line with the processes and timeline described in the WDP, LCH SA calculates the costs required for a wind down. These costs encompass staff salaries, indemnities for staff departure,
Section 19(b)(2)(C) of the Act directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such organization.
Section 17A(b)(3)(F) of the Act requires, among other things, that the rules of LCH SA be designed to promote the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts, and transactions, as well as to assure the safeguarding of securities and funds which are in the custody or control of LCH SA or for which it is responsible, and, in general, to protect investors and the public interest.
As described above, the RP would specify the steps that LCH would take in recovery and the governance framework applicable to taking such steps. It would analyze the anticipated impact of the recovery tools, the incentives created by such tools, and the risks associated with using such tools. It would also explain how the tools used in the plan are transparent, measurable, manageable, and controllable. The Commission believes that by specifying the steps LCH SA would take and the tools it would use to bring about recovery in the face of losses, the RP would increase the likelihood that recovery would be orderly, efficient, and successful. In increasing the likelihood that recovery of LCH SA would be orderly, efficient, and successful, the Commission believes that the RP would enhance LCH SA's ability to maintain the continuity of its critical services (including clearance and settlement services) during, through, and following periods of extreme stress giving rise to the need for recovery, thereby promoting the prompt and accurate clearance and settlement of CDS transactions. The Commission also believes that the RP would help assure the safeguarding of securities or funds in the custody or control of LCH SA by reducing the likelihood of a disorderly or unsuccessful recovery, which could otherwise disrupt access to such securities or funds. For the same reason, the Commission also believes the RP would be consistent with the protection of investors and the public interest.
Similarly, the Commission believes that the WDP would enhance LCH SA's ability to promote the prompt and accurate clearance and settlement of securities transactions and to safeguard securities and funds in its control by establishing a plan to effectuate an orderly wind down. Specifically, the WDP's governance process and notice provisions would facilitate the orderly close-out of positions and potential transfer of positions to other central counter parties. Therefore, the Commission believes that these provisions would enhance LCH SA's ability to maintain and continue the prompt and accurate clearance and settlement of CDS transactions by assuring that such transactions are closed-out and transferred to other central counterparties in an orderly and transparent manner. Moreover, by specifying in advance the steps LCH SA would take in a wind down, the WDP would assure an efficient and orderly wind down of LCH SA. The Commission believes that this, in turn, would assure the safeguarding of securities or funds in the custody or control of LCH SA by reducing the likelihood of an inefficient or disorderly wind down, which could disrupt access to such securities or funds. Finally, the Commission believes that the WDP's requirement that LCH SA deposit remaining cash in central bank accounts and limit investment options to short term highly-liquid instruments would further enhance LCH SA's ability to safeguard funds in its control by reducing the risk of liquidity constraints and investment losses during a wind down.
Therefore, the Commission finds that the proposed rule changes would promote the prompt and accurate clearance and settlement of securities transactions, assure the safeguarding of securities and funds in LCH SA's custody and control, and, in general, protect investors and the public interest, consistent with the Section 17A(b)(3)(F) of the Act.
Rules 17Ad-22(e)(2)(i), (iii), and (v) require that LCH SA establish, implement, maintain, and enforce written policies and procedures reasonably designed to provide for governance arrangements that are clear and transparent, that support the public interest requirements in Section 17A of the Act applicable to clearing agencies, and the objectives of owners and participants, and that specify clear and direct lines of responsibility.
The RP would identify clear lines of responsibility for its preparation and final approval, the monitoring of its use, and the functioning of the recovery tools. The RP would also specify the process LCH SA would take to receive input from various parties at LCH SA, including management committees and the Board. Further, the RP would enhance transparency by including member representatives in the review of the RP. The Commission believes that these lines of control and input from various LCH SA stakeholders can contribute to establishing, implementing, maintain and enforcing clear and transparent governance arrangements that support the public interest requirements in Section 17A of the Act applicable to clearing agencies, and the objectives of owners and participants.
The WDP similarly would identify clear lines of responsibility for the invocation, monitoring, and approval of the WDP, and ultimately, a wind down. It would enhance transparency by requiring final approval by the LCH SA shareholders and providing for communication to clearing members and other users of LCH SA's services. The Commission believes that both of these features of the WDP would represent clear and transparent governance arrangements.
Therefore, the Commission finds that the proposed rule changes would establish clear and transport governance arrangements for the RP and WDP,
Rule 17Ad-22(e)(3)(ii) requires that LCH SA establish, implement, maintain and enforce written policies and procedures reasonably designed to maintain a sound risk management framework for comprehensively managing legal, credit, liquidity, operational, general business, investment, custody, and other risks that arise in or are borne by LCH SA, which includes plans for the recovery and orderly wind-down of LCH SA necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses.
The Commission believes that the information the RP would provide about the steps that LCH SA would take, and the tools it would use, to effectuate a recovery of LCH SA would enhance LCH SA's ability to recover from credit losses, liquidity shortfalls, general business risk losses, or other losses, consistent with Rule 17Ad-22(e)(3)(ii).
Similarly, in providing detailed information about the governance requirements related to triggering and implementing the WDP discussed in more detail above, the Commission believes that the WDP would enhance LCH SA's ability to effectuate an orderly wind-down, consistent with Rule 17Ad-22(e)(3)(ii).
Therefore, the Commission finds that the proposed rule changes would be plans for the orderly recovery and wind down of LCH SA, consistent Rule 17Ad-22(e)(3)(ii).
Rules 17Ad-22(e)(15)(i)-(ii) require LCH SA to establish, implement, maintain and enforce written policies and procedures reasonably designed to identify, monitor, and manage its general business risk and hold sufficient liquid net assets funded by equity to cover potential general business losses so that LCH SA can continue operations and services as a going concern if those losses materialize, including by (i) determining the amount of liquid net assets funded by equity based upon its general business risk profile and the length of time required to achieve a recovery or orderly wind-down, as appropriate, of its critical operations and services if such action is taken and (ii) holding liquid net assets funded by equity equal to the greater of either (x) six months of the LCH SA's current operating expenses, or (y) the amount determined by the board of directors to be sufficient to ensure a recovery or orderly wind-down of critical operations and services.
LCH SA's RP would include a quantitative assessment of the situations that could necessitate a recovery and related recovery tools. This quantitative assessment would consider the potential impact to LCH SA's liquid net assets funded by equity, including its surplus capital. It would also include an assessment of the time to implement the various recovery tools. Thus, the Commission finds that the RP would indicate the potential cost and length of recovery, consistent with Rules 17Ad-22(e)(15)(i)-(ii).
Similarly, LCH SA's WDP would calculate costs related to a wind down. These costs would include staffing, technological, facilities, legal, and other resources necessary during the actual wind-down period. Further, the WDP concludes, based on recently audited amounts, that LCH SA would hold highly liquid resources corresponding to six months of operating expenses and that this amount would exceed the estimated costs of conducting a wind-down. The WDP also concludes that the length of time it would take LCH SA to wind-down and close clearing services would be six months from the decision to wind-down. Thus, the Commission finds that the WDP would indicate LCH SA's ability to effectuate a wind down within six months of the decision to wind-down at a lower cost than the amount of its liquid resources, consistent with Rules 17Ad-22(e)(15)(i)-(ii).
Therefore, the Commission finds that the proposed rule changes would determine the length of time required to achieve a recovery or orderly wind-down of LCH SA and the associated costs and would further ensure that LCH SA holds liquid net assets greater than these costs, consistent with Rules 17Ad-22(e)(15)(i)-(ii).
On the basis of the foregoing, the Commission finds that the proposed rule changes are consistent with the requirements of the Act, and in particular, Section 17A(b)(3)(F) of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange filed a proposal to amend its fees and rebates applicable to Members
The text of the proposed rule change is available at the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to implement proposed changes to its fee schedule relating to physical connectivity fees, effective June 1, 2018. By way of background, a physical port is utilized by a Member or non-Member to connect to the Exchange at the data centers where the Exchange's servers are located. The Exchange currently maintains a presence in two third-party data centers: (i) The primary data center where the Exchange's business is primarily conducted on a daily basis, and (ii) a secondary data center, which is predominantly maintained for business continuity purposes. The Exchange currently assesses the following physical connectivity fees for Members and non-Members on a monthly basis: $2,000 per physical port for a 1 gigabyte circuit and $7,000 per physical port for a 10 gigabyte circuit. The Exchange proposes to increase the fees per physical ports from (i) $2,000 to $2,500 per month, per port for a 1 gigabyte circuit and (ii) $7,000 to $7,500 per month, per port for a 10 gigabyte circuit. The Exchange notes the proposed fees enable it to continue to maintain and improve its market technology and services and also notes that the proposed fee changes are in line with the amounts assessed by other exchanges for similar connections.
The Exchange also proposes to adopt separate physical port fees for connection to its secondary data center, which is predominantly maintained for business continuity purposes (“Disaster Recovery Systems”). Particularly, the Disaster Recovery Systems can be accessed via physical ports in Chicago. Members and Non-Members may maintain physical ports in order to be able to connect to the Disaster Recovery Systems in case of a disaster. Currently, physical ports that are used to connect to the Disaster Recovery Systems are assessed the same fees as physical ports used to connect to the Exchange's trading system. The Exchange proposes to establish separate pricing for physical ports that are used to connect to the Disaster Recovery Systems (“Disaster Recovery Physical Ports”). Specifically, the Exchange proposes to assess a monthly fee of $2,000 per 1 gigabyte Disaster Recovery Physical Port and a monthly fee of $6,000 per 10 gigabyte Disaster Recovery Physical Port. This amount will continue to enable the Exchange to maintain the Disaster Recovery Physical Ports in case they become necessary. The Exchange notes that the Disaster Recovery Physical Ports may also be used to access the Disaster Recovery Systems for the following affiliate exchanges Cboe BZX Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe BYX Exchange, Inc., Cboe C2 Exchange, Inc., Cboe Exchange, Inc. and Cboe Futures Exchange, LLC as well. The Exchange proposes to provide that market participants will only be assessed a single fee for any Disaster Recovery Physical Port that also accesses the Disaster Recover Systems for these exchanges.
The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,
The Exchange believes that the proposed changes are equitable and non-discriminatory in that it applies uniformly to all Members. Members and non-Members will continue to choose whether they want more than one physical port and/or Disaster Recovery Physical Port and choose the method of connectivity based on their specific needs. All Members that voluntarily select various service options will be charged the same amount for the same services.
The Exchange believes that the proposal represents an equitable allocation of reasonable dues, fees, and other charges as its fees for physical connectivity are reasonably constrained by competitive alternatives. If a particular exchange charges excessive fees for connectivity, affected Members and non-Members may opt to terminate their connectivity arrangements with that exchange, and adopt a possible range of alternative strategies, including routing to the applicable exchange through another participant or market center or taking that exchange's data indirectly. Accordingly, if the Exchange charges excessive fees, it would stand to lose not only connectivity revenues but also revenues associated with the execution of orders routed to it, and, to the extent applicable, market data revenues. The Exchange believes that this competitive dynamic imposes powerful restraints on the ability of any exchange to charge unreasonable fees for connectivity.
Furthermore, the proposed rule change is also an equitable allocation of reasonable dues, fees, and other charges as the Exchange believes that the proposed increased physical port fees will enable it to cover its infrastructure costs associated with establishing physical ports to connect to the Exchange's systems. The additional revenue from the increased fees will also enable the Exchange to continue to maintain and improve its market technology and services. Similarly, the Exchange believes the proposed fees for the Disaster Recovery Physical Ports will allow the Exchange to maintain the Disaster Recovery Physical Ports in case they become necessary.
Lastly, the Exchange believes the fees remain competitive with those charged by other venues and therefore continue to be reasonable and equitably allocated to Members.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. As discussed above, the Exchange believes that fees for connectivity are constrained by the robust competition for order flow among exchanges and non-exchange markets. The Exchange does not believe that the proposed changes represent a significant departure from previous pricing offered by the Exchange or pricing offered by the Exchange's competitors. Additionally, Members may opt to disfavor the Exchange's pricing if they believe that alternatives offer them better value. Further, excessive fees for connectivity would serve to impair an exchange's ability to compete for order flow rather than burdening competition.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from Members or other interested parties.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend its Fees Schedule. The text of the proposed rule change is available at the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend its Fees Schedule.
A physical port is utilized by a Trading Permit Holder (“TPH”) or non-TPH to connect to the Exchange at the data centers where the Exchange's servers are located. The Exchange currently assesses fees for Network Access Ports for legacy physical connections to the Exchange. Specifically, TPHs and non-TPHs can currently elect to connect to C2's trading system via either a 1 gigabit per second (“Gbps”) Network Access Port or a 10 Gbps Network Access Port. The Exchange currently assesses a monthly fee of $500 per port for 1 Gbps Network Access Ports and a monthly fee of $1,000 per port for 10 Gbps Network Access Ports. Through June 30, 2018, C2 market participants will continue to have the ability to connect to C2's trading system via legacy Network Access Ports. The Exchange however, does not wish to assess fees for the legacy ports for the month of June. As such, the Exchange proposes to eliminate the $500 and $1,000 per port per month fees, effective June 1, 2018.
On May 14, 2018, the Exchange migrated its technology onto the same trading platform as its affiliates Cboe BZX Exchange, Inc., Cboe BYX Exchange, Inc., Cboe EDGA Exchange, Inc., and Cboe BZX Exchange, Inc. (“Affiliated Exchanges”) (the “migration”). In connection with the migration, effective May 14, 2018, TPHs and non-TPHs could alternatively elect to connect to C2 via new Physical Ports. The new Physical Ports allow TPHs and non-TPHs the ability to connect to the Exchange at the data centers where the Exchange's servers are located and TPHs and non-TPHs have the option to connect via 1 Gbps or 10 Gbps Physical Ports. The Exchange currently maintains a presence in two third-party data centers: (i) The primary data center where the Exchange's business is primarily conducted on a daily basis, and (ii) a secondary data center, which is predominantly maintained for business continuity purposes. The Exchange currently assesses a monthly fee of $2,000 per port for 1 Gbps Physical Ports, and a monthly fee of $7,000 per port for 10 Gbps Physical Ports, for Physical Ports that connect to the primary data center. The Exchange proposes to increase the monthly Physical Port fees to $2,500 per port for 1 Gbps Physical Ports and to $7,500 per port for 10 Gbps Physical Ports. The Exchange notes the proposed fees enable it to continue to maintain and improve its market technology and services and also notes that the proposed fee changes are in line with the amounts assessed by other exchanges for similar connections. The Exchange also notes that the proposed changes to the Physical Port fees are also being proposed by its Affiliated Exchanges for June 1, 2018 effectiveness.
The Exchange also proposes to adopt separate Physical Port fees for connection to its secondary data center, which is predominantly maintained for business continuity purposes (“Disaster Recovery Systems”). Particularly, the Disaster Recovery Systems can be accessed via Physical Ports in Chicago. TPHs and Non-TPHs may maintain Physical Ports in order to be able to connect to the Disaster Recovery Systems in case of a disaster. The Exchange proposes to establish separate pricing for Physical Ports that are used to connect to the Disaster Recovery Systems (“Disaster Recovery Physical Ports”). Specifically, the Exchange proposes to assess a monthly fee of $2,000 per 1 Gbps Disaster Recovery Physical Port and a monthly fee of $6,000 per 10 Gbps Disaster Recovery Physical Port. This amount will allow the Exchange to maintain the Disaster Recovery Physical Ports in case they become necessary. The Exchange notes that the Disaster Recovery Physical Ports may also be used to access the Disaster Recovery Systems for the following affiliate exchanges: Cboe BZX Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe BYX Exchange, Inc., Cboe Exchange Inc., and Cboe Futures Exchange, LLC. The Exchange proposes to provide that market participants will only be assessed a single fee for any Disaster Recovery Physical Port that also accesses the Disaster Recovery Systems for these exchanges.
The Exchange currently assesses $650 per port for BOE and FIX Logical Ports. Additionally, the Fees Schedule provides that each BOE or FIX Logical Port incur the standard logical port fee when used to enter up to 20,000 orders per trading day per logical port as
The Exchange lastly proposes to amend the “Port Fee” under the Cboe Data Services (“CDS”) fees section. Currently, the Port Fee is payable by any Customer that receives data through a direct connection to CDS (“direct connection”) or through a connection to CDS provided by an extranet service provider (“extranet connection”). The Port Fee applies to receipt of any C2 Options data feed but is only assessed once per data port. The Exchange proposes to amend the monthly CDS Port Fee to provide that it is payable “per source” used to receive data, instead of “per data port”. The Exchange also proposes to increase the fee from $500 per data port/month to $1,000 per data source/month.
The Exchange lastly proposes to correct an inadvertent error with respect to a reference to a C2 Rule in the Fees Schedule. Particularly, the Exchange notes that under the Regulatory Options Fee section of the Fees Schedule, a reference to C2 Rule 6.36 is made. The Exchange notes that such rule was recently replaced with C2 Rule 6.15. The Exchange proposes to update that reference and notes that no substantive changes are being made by this clean-up update.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
The Exchange believes it's reasonable, equitable and not unfairly discriminatory to not assess Network Access Port fees for the month of June as market participants will no longer pay fees for these ports. TPHs and non-TPHs will continue to pay the Physical Port fees for Physical Port connections. The Exchange believes the proposed change is equitable and not unfairly discriminatory because it applies uniformly to market participants.
The Exchange believes increasing the fees for the Physical Ports is reasonable because the proposed fees enable the Exchange to continue to maintain and improve its market technology. The Exchange also notes that the proposal represents an equitable allocation of reasonable dues, fees and other charges as its fees for physical connectivity are reasonably constrained by competitive alternatives. If a particular exchange charges excessive fees for connectivity, affected TPHs and non-TPHs may opt to terminate their connectivity arrangements with that exchange, and adopt a possible range of alternative strategies, including routing to the applicable exchange through another participant or market center or taking that exchange's data indirectly. Accordingly, if the Exchange charges excessive fees, it would stand to lose not only connectivity revenues but also revenues associated with the execution of orders routed to it, and, to the extent applicable, market data revenues. The Exchange believes that this competitive dynamic imposes powerful restraints on the ability of any exchange to charge unreasonable fees for connectivity. The Exchange also notes that the proposed amounts are in line with the costs of physical connectivity at other Exchanges.
Similarly, the Exchange believes the proposed fees for the Disaster Recovery Physical Ports are reasonable as it will allow the Exchange to maintain the Disaster Recovery Physical Ports in case they become necessary. The Exchange also believes the proposed fees are reasonable as they remain competitive with those charged by other venues.
The Exchange believes the proposed increase to the maximum average orders per day per logical port for BOE and FIX Logical Port usage provides market participants adequate capacity and ability to submit orders, while still encouraging users to mitigate message traffic as necessary, which removes impediments to and perfects the mechanism of a free open market and a national market system, and, in general, protects investors and the public interest. The proposed change is also equitable and not unfairly discriminatory because it applies uniformly to all market participants.
The Exchange believes the proposed change is reasonable, equitable and not unfairly discriminatory because it applies uniformly to all market participants. The Exchange believes assessing the fee per data source, instead of per port, is reasonable because it may allow for market participants to maintain more ports at a lower cost and applies uniformly to all market participants. The Exchange believes the proposed increase is reasonable because, as noted above, market participants will likely still pay lower fees as a result of charging per data source and not per data port.
The Exchange believes the proposed rule change to correct an inadvertent rule reference error alleviates potential confusion. The alleviation of confusion removes impediments to and perfects the mechanism of a free and open market and a national market system.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the
The Exchange has neither solicited nor received written comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On December 4, 2017, NYSE Arca, Inc. (“NYSE Arca”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Section 19(b)(2) of the Act
The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
U.S. Small Business Administration.
Notice.
This is a Notice of the Presidential declaration of a major disaster for Public Assistance Only for the State of New Hampshire (FEMA-4371-DR), dated 06/08/2018.
Issued on 06/08/2018.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the President's major disaster declaration on 06/08/2018, Private Non-Profit organizations that provide essential services of a governmental nature may file disaster loan applications at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 15559B and for economic injury is 155600.
U.S. Small Business Administration.
Notice.
This is a Notice of the Presidential declaration of a major disaster for the State of HAWAII (FEMA-4366-DR), dated 06/14/2018.
Issued on 06/14/2018.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the President's major disaster declaration on 06/14/2018, applications for disaster loans may be filed at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 15567D and for economic injury is 155680.
Surface Transportation Board.
Approval of rail cost adjustment factor.
The Board approves the third quarter 2018 Rail Cost Adjustment Factor (RCAF) and cost index filed by the Association of American Railroads. The third quarter 2018 RCAF (Unadjusted) is 1.061. The third quarter 2018 RCAF (Adjusted) is 0.449. The third quarter 2018 RCAF-5 is 0.419.
Pedro Ramirez, (202) 245-0333. Federal Information Relay Service (FIRS) for the hearing impaired: (800) 877-8339.
Additional information is contained in the Board's decision, which is available on our website,
This action is categorically excluded from environmental review under 49 CFR 1105.6(c).
By the Board, Board Members Begeman and Miller.
Federal Highway Administration (FHWA), Department of Transportation.
Notice to rescind the Record of Decision (ROD) and the Final Environmental Impact Statement (FEIS).
The FHWA is issuing this notice to advise the public that we are rescinding the 2003 Record of Decision (ROD) and the Final Environmental Impact Statement (FEIS) that proposed to construct a segment of Interstate 66 (I-66) between eastern Pike County, Kentucky and western Mingo County, West Virginia.
Thomas Nelson, Jr., Division Administrator, Federal Highway Administration, Kentucky Division, 330 South Broadway Street, Frankfort, Kentucky, 40601, Telephone: (502) 223-6720.
The FHWA, as the lead Federal agency, in cooperation with the Kentucky Transportation Cabinet (KYTC), is rescinding the Record of Decision (ROD) and the Final Environmental Impact Statement (FEIS) for the proposal to construct a segment of Interstate 66 in Pike County, Kentucky and Mingo County, West Virginia. The Notice of Intent (NOI) to prepare the Environmental Impact Statement (EIS) was published in the
Any future Federal-aided action within this corridor will comply with environmental review requirements of the National Environmental Policy Act (NEPA) (42 U.S.C. 4321), FHWA environmental regulations (23 CFR 771) and related authorities, as appropriate. Comments and questions concerning this action should be directed to FHWA at the address provided above.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of applications for exemption; request for comments.
FMCSA announces receipt of applications from eight individuals for an exemption from the prohibition in the Federal Motor Carrier Safety Regulations (FMCSRs) against persons with a clinical diagnosis of epilepsy or any other condition that is likely to cause a loss of consciousness or any loss of ability to control a commercial motor vehicle (CMV) to drive in interstate commerce. If granted, the exemptions would enable these individuals who have had one or more seizures and are taking anti-seizure medication to operate CMVs in interstate commerce.
Comments must be received on or before July 23, 2018
You may submit comments bearing the Federal Docket Management System (FDMS) Docket No. FMCSA-2018-0053 using any of the following methods:
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Ms. Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption from the FMCSRs for a five-year period if it finds “such exemption would likely achieve a level of safety that is equivalent to or greater than the level that would be achieved absent such exemption.” The statute also allows the Agency to renew exemptions at the end of the five-year period. FMCSA grants exemptions from the FMCSRs for a two-year period to align with the maximum duration of a driver's medical certification.
The eight individuals listed in this notice have requested an exemption from the epilepsy and seizure disorders prohibition in 49 CFR 391.41(b)(8). Accordingly, the Agency will evaluate the qualifications of each applicant to determine whether granting the exemption will achieve the required level of safety mandated by statute.
The physical qualification standard for drivers regarding epilepsy found in 49 CFR 391.41(b)(8) states that a person is physically qualified to drive a CMV if that person has no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause the loss of consciousness or any loss of ability to control a CMV.
In addition to the regulations, FMCSA has published advisory criteria
The advisory criteria states the following:
If an individual has had a sudden episode of a non-epileptic seizure or loss of consciousness of unknown cause that did not require anti-seizure medication, the decision whether that person's condition is likely to cause the loss of consciousness or loss of ability to control a CMV should be made on an individual basis by the Medical Examiner in consultation with the treating physician. Before certification is considered, it is suggested that a six-month waiting period elapse from the time of the episode. Following the waiting period, it is suggested that the individual have a complete neurological examination. If the results of the examination are negative and anti-seizure medication is not required, then the driver may be qualified.
In those individual cases where a driver had a seizure or an episode of loss of consciousness that resulted from a known medical condition (
Drivers who have a history of epilepsy/seizures, off anti-seizure medication and seizure-free for 10 years, may be qualified to operate a CMV in interstate commerce. Interstate drivers with a history of a single unprovoked seizure may be qualified to drive a CMV in interstate commerce if seizure-free and off anti-seizure medication for a five-year period or more.
As a result of Medical Examiners misinterpreting advisory criteria as regulation, numerous drivers have been prohibited from operating a CMV in interstate commerce based on the fact that they have had one or more seizures and are taking anti-seizure medication, rather than an individual analysis of their circumstances by a qualified Medical Examiner based on the physical qualification standards and medical best practices.
On January 15, 2013, FMCSA announced in a Notice of Final Disposition titled, Qualification of Drivers; Exemption Applications; Epilepsy and Seizure Disorders, (78 FR 3069), its decision to grant requests from 22 individuals for exemptions from the regulatory requirement that interstate CMV drivers have “no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause loss of consciousness or any loss of ability to control a CMV.” Since the January 15, 2013 notice, the Agency has published additional notices granting requests from individuals for exemptions from the regulatory requirement regarding epilepsy found in 49 CFR 391.41(b)(8).
To be considered for an exemption from the epilepsy and seizure disorders prohibition in 49 CFR 391.41(b)(8), applicants must meet the criteria in the 2007 recommendations of the Agency's Medical Expert Panel (MEP) (78 FR 3069).
Mr. Alegre is a 31 year-old class D driver in New Jersey. He has a history of a single provoked seizure and has been seizure free since April 2014. He takes anti-seizure medication with the dosage and frequency remaining the same since April 2014. His physician states that he is supportive of Mr. Alegre receiving an exemption.
Mr. Christner is a 39 year-old class C driver in Pennsylvania. He has a history of epilepsy and has been seizure free since 2000. He takes anti-seizure medication with the dosage and frequency remaining the same since 2007. His physician states that he is supportive of Mr. Christner receiving an exemption.
Mr. Gomez is a 56 year-old class C driver in California. He has a history of generalized convulsive epilepsy and has been seizure free since 2010. He takes anti-seizure medication with the dosage and frequency remaining the same since August 2010. His physician states that he is supportive of Mr. Gomez receiving an exemption.
Mr. Knox is a 57 year-old class D driver in Massachusetts. He has a history of a seizure disorder and has been seizure free since 1988. He takes anti-seizure medication with the dosage and frequency remaining the same since May 2015. His physician states that he is supportive of Mr. Knox receiving an exemption.
Mr. Ork is a 56 year-old class C driver in New York. He has a seizure disorder and has been seizure free since 2004. He takes anti-seizure medication with the dosage and frequency remaining the same since 2004. His physician states that he is supportive of Mr. Ork receiving an exemption.
Ms. Seale is a 64 year-old class CB CDL holder in Delaware. She has a history of a seizure disorder and has been seizure free since 1978. She takes anti-seizure medication with the dosage and frequency remaining the same since 1978. Her physician states that he is supportive of Ms. Seale receiving an exemption.
Ms. Spencer-Brown is a 38 year-old class A CDL holder in West Virginia. She has a history of a seizure disorder and has been seizure free since 2008. She takes anti-seizure medication with the dosage and frequency remaining the same since 2008. Her physician states that she is supportive of Ms. Spencer-Brown receiving an exemption.
Mr. Williams is a 53 year-old class D driver in Virginia. He has a history of a seizure disorder and has been seizure free since 2003. He takes anti-seizure medication with the dosage and frequency remaining the same since 2003. His physician states that he is supportive of Mr. Williams receiving an exemption.
In accordance with 49 U.S.C. 31136(e) and 31315, FMCSA requests public comment from all interested persons on the exemption petitions described in this notice. We will consider all comments received before the close of business on the closing date indicated in the dates section of the notice.
You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
We will consider all comments and materials received during the comment period. FMCSA may issue a final determination at any time after the close of the comment period.
To view comments, as well as any documents mentioned in this preamble, go to
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of application for exemption; request for comments.
FMCSA announces that it has received an application from the American Concrete Pumping Association (ACPA) for an exemption from the requirement that short-haul drivers utilizing the records of duty status (RODS) exception return to their normal work-reporting location within 12 hours of coming on duty. ACPA requests that concrete pump operators be allowed to use the short-haul exception but return to their work-reporting location within 14 hours instead of the usual 12 hours. The requested exemption would apply industry-wide to all concrete pump operators, concrete pumping companies, and drivers who operate concrete pumps. FMCSA requests public comment on ACPA's application for exemption.
Comments must be received on or before July 23, 2018.
You may submit comments identified by Federal Docket Management System Number FMCSA-2018-0175 by any of the following methods:
•
•
•
•
Each submission must include the Agency name and the docket number for this notice. Note that DOT posts all comments received without change to
For information concerning this notice,
FMCSA encourages you to participate by submitting comments and related materials.
If you submit a comment, please include the docket number for this notice (FMCSA-2018-0175), indicate the specific section of this document to which the comment applies, and provide a reason for suggestions or recommendations. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so the Agency can contact you if it has questions regarding your submission.
To submit your comment online, go to
FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from certain Federal Motor Carrier Safety Regulations (FMCSRs). FMCSA must publish a notice of each exemption request in the
The Agency reviews safety analyses and public comments submitted, and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the
ACPA seeks an exemption from the restriction of the RODS exception for short-haul operations available to drivers who return to their normal work reporting location and are released from work within 12 hours [49 CFR 395.1(e)(1)(ii)(A)]. Specifically, ACPA requests that concrete pump operators be treated the same as drivers operating ready-mixed concrete delivery vehicles as provided in § 49 CFR 395.1(e)(1)(ii)(B). Section 395.1(e)(1)(ii)(B) allows drivers of ready-mixed concrete delivery vehicles to rely on the short-haul exception provided they return to their work-reporting locations and are released from work within 14 consecutive hours. The requested exemption would apply industry-wide to all concrete pump operators, concrete pumping companies, and drivers who deliver, set-up, and operate concrete pumps across the United States.
ACPA currently represents more than 600 member companies employing over 7,000 workers nationwide. The exemption would be applied to all interstate concrete pumper trucks and their operators. Although many of the trucks operate intrastate and would therefore not be covered by an FMCSA exemption, an unknown number of the pumping trucks are operated in metropolitan areas and do routinely cross State lines.
ACPA explained that, like ready-mixed concrete delivery trucks and asphalt pavement delivery trucks, concrete pumps work with a perishable product delivered on a just-in-time basis. Timing and scheduling are critical to ensure a high-quality result. Allowing concrete pump drivers to use the short-haul exception, but return to their reporting location within 14 hours instead of 12 hours, would harmonize the hours-of-service rules for drivers of concrete pumps with the rules for drivers of the vehicles that supply the concrete.
ACPA explained that only a small percentage of the concrete pump operator's time is spent driving. On average, concrete pump operators spend between 25-32% of their time driving during a shift, and average daily driving distances are 20-25 miles. A pump operator has plenty of rest time with breaks ranging from 33%-55% of their total time pumping. The majority of an operator's time is spent waiting on ready-mixed concrete.
ACPA further explained that a concrete pump cannot operate without a ready-mixed truck. Having conflicting requirements creates confusion on job sites. Clear and consistent requirements between the concrete pumps and the ready-mixed trucks will help ensure an equivalent level of safety on the job site. ACPA adds that concrete pumping and placement companies work in collaboration with ready-mixed companies. Scheduling local business contracts in compliance with State and Federal regulations is complicated, given that some concrete companies operate under different FMCSA rules.
ACPA asserts that the concrete pumping industry has a solid safety record. Break periods, spent waiting for the ready-mixed trucks deliveries, provide opportunity for concrete pump operators to rest and relax. The ACPA Operator Certification Program ensures, encourages, and educates the concrete pump operators on safe concerete pumping and placement procedures. These safety practices allow concrete operators to maintain their safety record through careful training and well-developed safety guidelines. Because of the concrete pump operators' training and preparation and numerous rest breaks, providing the additional 2 duty hours to concrete pump operators will have no impact on the level of safety provided under the short-haul exception. The requested exemption is for 5 years, with opportunity for renewals.
A copy of the ACPA's application for exemption is available for review in the docket for this notice.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition.
FMCSA announces its decision to renew exemptions for 3 individuals from the hearing requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) for interstate commercial motor vehicle (CMV) drivers. The exemptions enable these hard of hearing and deaf individuals to continue to operate CMVs in interstate commerce.
The exemptions were applicable on March 27, 2018. The exemptions expire on March 27, 2020.
Ms. Christine A. Hydock, Chief, Medical Programs Division, 202-366-4001,
You may see all the comments online through the Federal Document Management System (FDMS) at:
On April 27, 2018, FMCSA published a notice announcing its decision to renew exemptions for 3 individuals from the hearing standard in 49 CFR 391.41(b)(11) to operate a CMV in interstate commerce and requested comments from the public (83 FR 18623). The public comment period ended on May 29, 2018, and no comments were received.
As stated in the previous notice, FMCSA has evaluated the eligibility of these applicants and determined that renewing these exemptions would achieve a level of safety equivalent to or greater than the level that would be achieved by complying with the current regulation 49 CFR 391.41(b)(11).
The physical qualification standard for drivers regarding hearing found in 49 CFR 391.41(b)(11) states that a person is physically qualified to driver a CMV if that person first perceives a forced whispered voice in the better ear at not less than 5 feet with or without the use of a hearing aid or, if tested by use of an audiometric device, does not have an average hearing loss in the better ear greater than 40 decibels at 500 Hz, 1,000 Hz, and 2,000 Hz with or without a hearing aid when the audiometric device is calibrated to American National Standard (formerly ASA Standard) Z24.5—1951.
49 CFR 391.41(b)(11) was adopted in 1970, with a revision in 1971 to allow drivers to be qualified under this standard while wearing a hearing aid, 35 FR 6458, 6463 (April 22, 1970) and 36 FR 12857 (July 3, 1971).
FMCSA received no comments in this preceding.
Based upon its evaluation of the 3 renewal exemption applications, FMCSA announces its' decision to exempt the following drivers from the hearing requirement in 49 CFR 391.41(b)(11):
As of March 27, 2018, and in accordance with 49 U.S.C. 31136(e) and 31315, the following 3 individuals have satisfied the renewal conditions for obtaining an exemption from the hearing requirement in the FMCSRs for interstate CMV drivers (FR 83 18623).
Marquarius Boyd, (MS); Keith Craig Drown, (ID); and James Gooch, (KS).
The drivers were included in docket number FMCSA-2013-0124 and FMCSA 2013-0125.
Their exemptions are applicable as of March 27, 2018, and will expire on March 27, 2020.
In accordance with 49 U.S.C. 31315, each exemption will be valid for two years from the effective date unless revoked earlier by FMCSA. The exemption will be revoked if the following occurs: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained prior to being granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136 and 31315.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FMCSA announces its plan to submit the Information Collection Request (ICR) described below to the Office of Management and Budget (OMB) for review and approval. The information collection concerns records of inspection, repair, and maintenance of commercial motor vehicles (CMVs). The FMCSA requests approval to revise and renew an ICR entitled, “Inspection, Repair and Maintenance.” FMCSA collects this information to ensure that motor carriers have adequate documentation of their inspection, repair, and maintenance programs necessary to reduce the likelihood of CMV crashes.
Please send your comments by July 23, 2018. OMB must receive your comments by this date in order to act quickly on the ICR.
All comments should reference Federal Docket Management
Mr. Mike Huntley, Vehicle and Roadside Operations Division, Department of Transportation, Federal Motor Carrier Safety Administration, West Building 6th Floor, 1200 New Jersey Avenue SE, Washington, DC 20590. Telephone: 202-366-9209; email
Motor carriers must maintain, or require maintenance of, records documenting the inspection, repair and maintenance activities performed on their owned and leased vehicles. There are no prescribed forms. Electronic recordkeeping is allowed (see 49 CFR 390.31(d)). Documents requiring a signature must be capable of replication (
The motor carrier industry has never questioned the need to keep CMV maintenance records. In fact, most motor carriers would keep some records without any regulatory requirements to do so. Records of inspection, repair, and maintenance; roadside inspection reports; driver vehicle inspection reports; the documentation of periodic inspections; the evidence of the qualifications of individuals performing periodic inspections; and the evidence of brake inspectors' qualifications contain the minimum amount of information necessary to document that a motor carrier has established a system of inspection, repair, and maintenance for its equipment which meets the standards in 49 CFR part 396.
FMCSA and its representatives use these records to verify motor carriers' compliance with the inspection, repair, and maintenance standards in part 396. This ICR supports the Department of Transportation's strategic goal of safety. The ICR also ensures that motor carriers have adequate records to document the inspection, repair, and maintenance of their CMVs, and to ensure that adequate measures are taken to keep their CMVs in safe and proper operating condition at all times. Compliance with the inspection, repair, and maintenance regulations helps to reduce the likelihood of accidents attributable, in whole or in part, to the mechanical condition of the CMV.
The Agency does not intend to revise the substantive contents of this information collection, the frequency of information collection, or how it uses the information. Because the previous four updates to this information collection were developed in conjunction with rulemaking actions, only those sections of the information collection affected by the specific rulemaking changes were amended during the previous four updates and a comprehensive update of the information collection has not been done since 2006. This renewal includes updated data regarding the number of motor carriers subject to the Federal Motor Carrier Safety Regulations, vehicle counts, inspections, and other underlying data used to estimate the total burden hours. In addition, this revision corrects the manner in which: (1) The burden associated with routine inspection, repair and maintenance records is calculated, by including non-powered CMVs in addition to power units; and (2) the burden associated with periodic inspection records is calculated, by using only the records associated with the once-per-year inspection conducted in accordance with 49 CFR Chapter III, Subchapter B, Appendix G. Finally, this revision corrects the calculation of the burden associated with Driver-Vehicle Inspection Reports (DVIRs) by including the 30 seconds required for motor carrier certification of corrective action for defect DVIRs that was inadvertently omitted in the calculation of this estimate in the December 2014 No-Defect DVIR rule.
If the recordkeeping were required to be completed less frequently, it would greatly hinder the ability of FMCSA and State officials and representatives to ascertain that CMVs are satisfactorily maintained. The timely documentation of CMV inspection, repair, and maintenance enables FMCSA and State officials to evaluate the present state of a motor carrier's CMV maintenance program and to check the current level of regulatory compliance at any point in a carrier's maintenance schedule or program.
The FMCSA has identified periodic inspection standards of 22 States, the District of Columbia, the Alabama Liquefied Petroleum Gas Board, 10 Canadian Provinces, and one Canadian Territory that are comparable to, or as effective as, the Federal periodic inspection requirements. The FMCSA does not require Federal periodic inspections and the related recordkeeping for motor carriers that comply with these equivalent periodic inspection programs. The FMCSA is not aware of any other duplicative standards or recordkeeping
The FMCSA does not employ this collection of information for statistical use.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before July 23, 2018.
Comments should refer to docket number MARAD-2018-0096. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590. You may also send comments electronically via the internet at
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, Email
As described by the applicant the intended service of the vessel MAGICAL DAYS is:
The complete application is given in DOT docket MARAD-2018-0096 at
In accordance with 5 U.S.C. 553(c), DOT/MARAD solicits comments from the public to better inform its rulemaking process. DOT/MARAD posts these comments, without edit, to
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before July 23, 2018.
Comments should refer to docket number MARAD-2018-0095. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590. You may also send comments electronically via the internet at
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, Email
As described by the applicant the intended service of the vessel MAYAN SOL is:
The complete application is given in DOT docket MARAD-2018-0095 at
In accordance with 5 U.S.C. 553(c), DOT/MARAD solicits comments from the public to better inform its rulemaking process. DOT/MARAD posts these comments, without edit, to
By Order of the Maritime Administrator.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Denial of a petition for a hearing on remedy of defect.
This notice sets forth the National Highway Traffic Safety Administrations (NHTSA) decision and reasons for denying a petition, (DP15-001) submitted to NHTSA requesting that the agency conduct a hearing to examine the remedy for Ford recall 14S05 (NHTSA recall 14V-284) and to require Ford to provide an adequate remedy.
Mr. Chris Lash, Vehicle Defects Division A, Office of Defects Investigation, NHTSA, 1200 New Jersey Avenue SE, Washington, DC 20590. Telephone 202-366-2370. Email
After a vehicle or an item of motor vehicle equipment has been determined to contain a defect that relates to motor vehicle safety, any interested person may petition the National Highway Traffic Safety Administration (NHTSA) requesting that the agency hold a hearing to determine if a manufacturer has met the defect notification and remediation requirements imposed by the National Traffic and Motor Vehicle Safety Act (“the Safety Act”), 49 U.S.C. Chapter 301. 49 U.S.C. 30120(a)(2), 49 CFR 557. Upon receipt of a properly filed petition, the agency conducts a review of the petition, any material submitted with the petition, and any additional relevant information.
In a submission dated February 3, 2015, Ms. Abigail Dayton (the Petitioner) filed a petition (DP15-001) requesting that NHTSA conduct a hearing to examine the remedy for Ford recall 14S05 (NHTSA Recall No. 14V-284) and require Ford to provide an adequate remedy. The Petitioner alleges that, after a dealer performed the recall remedy on her vehicle by performing a software update, she experienced a failure in the Ford Electric Power Assisted Steering (EPAS) system that required replacement of the steering column at her own expense. She further alleges that the EPAS failure necessitating the replacement of her steering column was “the precise issue for which Ford issued recall 14S05 in the first place.” The petition also presented accounts of similar post-remedy failures reported by other consumers on “various forums and websites.”
NHTSA has reviewed the material cited by the Petitioner. The results of this review and our evaluation of the petition are set forth in the DP15-001 Petition Analysis Report, published in its entirety below.
The facts Petitioner alleges are cause for concern regarding the approach adopted by Ford and are a source of significant frustration for Petitioner and others similarly situated who simply want their vehicle to run the way it was designed to, particularly after being repaired by the vehicle manufacturer. However, in light of NHTSA's statutory authority, after thorough assessment of the material submitted by the Petitioner and the factors NHTSA is required to consider in determining the proper resolution of a petition for a hearing on whether a manufacturer has reasonably met its obligation to remedy, NHTSA has decided not to grant the petition to hold a hearing. Accordingly, and for the reasons more fully explained in the below Petition Analysis Report for DP15-001, the petition is denied.
In a letter dated May 27, 2014, Ford Motor Company (Ford) submitted a Defect Information Report (DIR) to the National Highway Traffic Safety Administration (NHTSA) describing an Electric Power Assisted Steering (EPAS) system defect in certain model year 2008 through 2011 Ford Escape and Mercury Mariner vehicles (NHTSA Recall 14V-284, Ford 14S05) (the
Ford's remedy involved updating the system's software to mitigate the occurrence of loss of power steering assist while driving due to the torque sensor defect. Vehicles diagnosed with a torque sensor fault code at the time of the recall repair would have the torque sensor replaced, while vehicles diagnosed with fault codes related to other EPAS components would have the steering column replaced.
In a petition dated February 3, 2015, and received by NHTSA on February 5, 2015, (DP15-001) Ms. Abigail Dayton (the Petitioner) requested that the agency conduct a hearing to examine the remedy for the recall and require Ford to provide an adequate remedy. On November 1, 2014, a dealer performed the recall remedy on the Petitioner's 2008 Ford Escape vehicle by performing the software update. On January 5, 2015, 65 days after the recall remedy was completed on her vehicle, the Petitioner's vehicle experienced a failure in the EPAS system requiring her to pay for replacement of the steering column. Replacement of the steering column was an alternative remedy in the recall depending on what fault codes were present at the time the repair was made by a Ford dealer. The Petitioner alleged that the post-remedy steering column EPAS failure was “the precise issue for which Ford issued recall 14S05 in the first place.” The Petitioner also alleged that a pattern of similar post-remedy failures reported by other consumers on “various forums and websites”, along with several additional allegations, support her request that the agency hold a hearing and order Ford to provide a different remedy for the defect.
The Petitioner claims that the recall remedy conducted on her vehicle did not resolve the safety defect. Further, the Petitioner explains that she received a recall notice in July 2014 for NHTSA Recall No. 14V-284 and she obtained a repair from an authorized dealer in November 2014. However, Petitioner asserts that the remedy, in fact, did not repair the vehicle, as evidenced by the fact that the power steering assist failed “soon thereafter.” When Petitioner returned to the dealership in January 2015, the vehicle returned fault code B2277, which would authorize her for a different remedy under the recall had her vehicle not previously been repaired in November 2014. Petitioner goes on to surmise based on the alternative remedies available based on different fault codes, and the way that fault codes are pulled from the vehicles, that:
Ford either knew the PSCM
Pet. at 9.
The Safety Act requires vehicle manufacturers to remedy safety-related defects in their vehicles by repairing the vehicle; replacing the vehicle with an identical or reasonably equivalent vehicle; or refunding the purchase price, less a reasonable allowance for depreciation. 49 U.S.C. 30120(a). The statute allows a manufacturer to choose its own remedy and NHTSA does not approve manufacturers' remedies.
As noted above, Ford initiated the recall by filing the DIR on May 27, 2014. The DIR described the defect as “a poor signal to noise ratio in the torque sensor within the Electric Power Steering (EPS) that does not allow the PSCM to determine the driver's steering input.” As noted above, the safety consequence was stated to be loss of power assist while driving. The DIR described the remedy as follows:
Dealers will update the Power Steering Control Module (PSCM) and instrument cluster module software. The updated PSCM software changes the torque sensor fault strategy and will no longer remove power steering assist during an ignition cycle for a single torque sensor fault. Additionally, the software update will provide audible and visual warnings to the driver in the unlikely event that a torque sensor fault is detected.
Two days later, on May 29, 2014, Ford issued a bulletin to Ford dealers advising them of the recall. This bulletin described the defect as a fault in the torque sensor and stated that a complete Dealer Bulletin relating to the issue would be provided when software to perform the repair became available.
On May 30, 2014, Jennifer Timian, Chief of NHTSA's Recall Management Division, responded to the Ford DIR in an acknowledgement letter confirming receipt of the defect notice. Among other things, the letter described the remedy for the defect as follows:
Ford will notify owners, and dealers will update the software for the power steering control module and the instrument cluster module, free of charge. The recall is expected to begin by July 25, 2014. Owners may contact Ford customer service at 1-800-392-3673. Ford's number for this recall is 14S05.
Ford filed an amended DIR on June 2, 2014. According to Ford's cover letter, this amended DIR provided additional detail pertaining to the remedy program. Thus, while Ford's description of the defect (encompassing only the torque sensor) remained unchanged, the amended remedy description stated:
Dealers will check the Power Steering Control Module (PSCM) for Diagnostic Trouble Codes (DTC):
• If no loss of steering assist DTCs are present, dealers will update the PSCM and instrument cluster module software. The updated PSCM software changes the torque sensor fault strategy and will no longer remove power steering assist during an ignition cycle for a single torque sensor fault. Additionally, the software update will provide audible and visual warnings to the driver in the unlikely event that a torque sensor fault is detected.
• If upon initial inspection certain loss of steering assist DTCs are present, the dealer will either replace the torque sensor or the PSCM, depending on the DTC present.
NHTSA acknowledged receipt of the June 2, 2014 amended DIR by a letter dated June 4, 2014. This June 4, 2014 letter described the remedy as follows:
Ford will notify owners, and dealers will update the software for the power steering control module (PSCM) and the instrument cluster module, free of charge. If a vehicle shows a history of a loss of the torque sensor signal or fault codes relating to the PSCM when the vehicle is brought in for the recall remedy, the affected components will be replaced, free of charge. The recall is expected to begin by July 25, 2014.
On July 1, 2014 Ford sent instructions to its dealers providing information about how to complete the recall. This notice advised dealers that the software needed to perform the recall repair was still not available and would be released on July 9, 2014. The July 1 dealer notice described the repair procedure for the defect:
Dealers are to check the Power Steering Control Module (PSCM) for Diagnostic Trouble Codes (DTCs).
• If DTC B1342, B2277, or B2278 are NOT present, reprogram the PSCM and the Instrument Cluster (IC) module.
• If only DTC B2278 is present, replace the torque sensor.
• If DTC B1342 or B2277 is present, replace the steering column assembly.
The July 1, 2014 dealer notice further stated that the software update remedy option would not be available until July 9, and that until that date vehicles should only be repaired if a “vehicle arrives at your dealership with a customer complaint of loss of steering assist accompanied by one of the DTCs” identified in that bulletin (
In its May 15, 2015 information request letter (IR letter) to Ford, NHTSA requested information to assist in the evaluation of DP15-001.
The purpose of the remedy procedure is to mitigate the occurrence of the loss of power steering assist while driving due to the torque sensor, and to provide audible and visual warnings to the driver if a torque sensor fault is detected by updating the PSCM software. Additionally, if DTC's related to the PSCM (B2277 and B1342) or Torque Sensor (B2278) are present at the time of service, additional parts were replaced to better manage customer expectations.
Ford's strategy appears to have been effective in managing customer expectations when dealers performed the recall repairs on the subject vehicles, as there have been very few complaints related to that service. However, the strategy appears to have produced additional customer expectations regarding how Ford would manage post-remedy EPAS repairs to the torque sensor and other EPAS components covered by Ford as part of the recall repair procedure (
Prior investigations and recalls associated with defect conditions that may result in loss of power steering assist have established that such failures may result in an increased risk of crashes during low-speed vehicle maneuvers when they occur while driving and without warning. Testing conducted as part of several defect investigations by NHTSA's Vehicle Research and Test Center (VRTC) in East Liberty, Ohio, and others have found that the increases in driver hand-wheel efforts that result from loss of power steering assist are greater at parking lot speeds. The greatest efforts are required when the vehicle is stationary and the steering torque must overcome the static frictional forces from the tire contact patch with the road surface. Front-axle weight, tire size and tire inflation pressure are the primary factors affecting tire-road frictional forces when stopped and in low-speed parking and turning maneuvers.
There are very few published studies related to the effects of loss of power steering assist on vehicle directional control and crash risk. A study conducted by Transport Canada focused on the effects in low-speed turns, evaluating driver response to unexpected loss of assist in right-hand turns at a simulated traffic light at approximately 10 km/h (6 mph).
NHTSA considers the facts and evidence for each issue independently when deciding when to investigate allegations of loss of power steering assist. Based in part on vehicle testing and analysis of field data from prior investigations, NHTSA considers multiple factors, including: Operating mode, warning, vehicle factors, system factors and failure rate.
In the Ford EPAS system, a column-mounted electric motor drives the steering gear to provide steering assist to the driver using battery power. The system senses the speed, direction, and amount of effort, or torque, applied to the steering wheel by means of a torque sensor located in the steering column assembly. The signal from the torque sensor is relayed to an electronic control unit (the PSCM). A PSCM control algorithm generates a signal to drive the motor to provide steering assistance in proportion to the driver's steering effort and vehicle speed. The system reduces the amount of assist supplied to the driver as vehicle speed increases to provide the desired road feel at the steering wheel.
The Ford EPAS system continuously performs diagnostics to identify faults that could potentially result in safety hazards (
As shown in Table 1, prior to the remedy software update, the EPAS system responded to certain faults detected in the torque sensor, PSCM or motor by removing assist and transitioning to manual steering. The system remains in the failsafe mode until the conditions are met for clearing the fault and restoring normal EPAS. For faults detected in the torque sensor, PSCM, or motor, the vehicle remains in failsafe mode for the remainder of the ignition cycle in which the fault is detected—meaning that the vehicle must be turned off and restarted to clear the fault code and re-establish power steering. The system restores steering assist if the fault condition is no longer present on a subsequent ignition cycle.
Each of the fault codes associated with the subject EPAS system, including those shown in Table 1, are stored for 64 ignition cycles before the system clears them from memory.
In its June 26, 2015 response to NHTSA's IR letter, Ford identified several factors that may result in temporary “reduced assist” in the subject EPAS system and which may be reported by some owners as a loss of power steering assist. For example, Ford provided the following description of how the system may temporarily reduce assist during periods of low battery voltage:
Some of the reports pertain to reduced assist resulting from low battery voltage, such as when the vehicle is exposed to low ambient conditions, and operated at near idle engine speed, and with heavy electrical load. When the electric power assist system detects low system voltage, it will reduce the amount of assist it provides. Reduced assist is a protective response from the EPAS system to prevent engine stalling due to the low system voltage. It is not a defect of the EPAS system but instead a symptom of a potentially failing battery or other electrical system concern. Service bulletin SSM 20895 and the workshop manual direct the technician to inspect the vehicle electrical system for the root cause of the low system voltage. This condition of
In addition to low battery voltage, Ford indicated that the EPAS may also temporarily reduce assist when the steering is fully turned to one side or the other (
The EPAS system at issue uses a contact-type torque sensor to measure driver steering input. Over time, the
Ford's analysis found that the conductive surface degradation occurs at or near the on-center position where the steering wheel is held for the majority of road travel time and miles. This can result in noisy signals from the torque sensor, which may initially cause a perceptible steering wheel dither condition for some period prior to a loss of power steering.
Steering wheel dithering prior to a loss of assist has been noted in a number of reports, providing tactile feedback that the system is not functioning normally. As previously noted, the degradation of the conductive surface of the torque sensor may result in increased levels of signal noise to the PSCM. This increased signal noise may result in the steering wheel dither experienced by the driver. The amount of input supplied by the EPAS system to the steering column during this dithering is limited to approximately 2 Nm maximum and, while readily noticeable, can be easily managed by the driver. The updated PSCM software provided with the recall remedy is more tolerant of the signal noise. However, if the signal noise increases beyond this level, a diagnostic trouble code (DTC B2278) for the torque sensor will be stored in the system and a visual and audible warning will be given to the driver. Should the signal noise persist and/or increase, the PSCM may eventually remove power steering assist, but only at the beginning of the next key cycle (with the accompanying visual and audible warnings). The repair for this condition, as defined in the workshop manual, is torque sensor replacement.
Prior to February 2014, the torque sensor was not available as a separate replacement part and repairing failed torque sensors required replacement of the entire steering column assembly. This changed in February 2014 when Ford issued Technical Service Bulletin TSB 14-0016 and began providing torque sensor kits as service parts for faulty torque sensors, thereby reducing the repair cost for torque sensor failure by over 50 percent.
In May 2014, Ford submitted the DIR to NHTSA for the subject recall. As previously noted, the recall remedy involved updating the PSCM software to change the conditions under which the EPAS removes power assist following detection of torque sensor faults related to the noisy signal condition. Once the EPAS software update is completed, the system alerts the driver with an audible chime and warning lamp when EPAS detects the torque sensor fault; however, the system maintains full power steering assist through that ignition cycle and the fault does not result in a sudden loss of assist while driving. If the torque sensor fault persists or worsens, the system may remove power steering assist when the driver starts the vehicle at the beginning of the next ignition cycle. Owner notification for the recall started in July 2014.
Ford's Part 573 letter for the subject recall described the defect condition as follows:
In some of the affected vehicles, a poor signal to noise ratio in the torque sensor within the Electric Power Steering (EPS) system does not allow the PSCM to determine the driver's steering input. Once this condition is detected, the system removes power steering assist, and defaults to manual steering mode. In the event of a loss of power steering assist, the mechanical linkage between the steering wheel and the road is maintained at all times. Loss of power steering assist while driving would require higher steering effort at lower vehicle speeds, which may result in an increased risk of a crash.
As defined by Ford and confirmed by NHTSA's examination of available data, the defect here consists of a torque sensor design that is prone to contaminant accumulation leading to incomprehensible, noisy or intermittent signals being sent to the PSCM (which results in loss of power steering assist while the vehicle is being driven). Accordingly, Ford's defect report described the safety risk as a loss of power steering assist
Per the regulatory requirements, NHTSA's analysis of the petition includes the following factors: The nature of the complaint; the seriousness of the alleged breach of the vehicle manufacturer's obligation to remedy defects; the existence of similar complaints; NHTSA's ability to resolve the problem without holding a hearing; and other pertinent matters.
The nature of the Petitioner's complaint is that the remedy provided by “Ford has failed to adequately remedy” the safety defect. As evidence for this, the Petitioner points to her own experience with loss of power steering assist after receiving the remedy:
Soon thereafter, I started experiencing issues with my power steering (
The Petitioner's description of the post-remedy problem includes evidence of the torque sensor fault addressed by the subject recall (
NHTSA identified 632 complaints alleging post-remedy EPAS system problems in the subject vehicles and received by the Agency from August 2014 through the end of 2017. In general, the complaints lack sufficient detail to determine the root cause, failure mode, or operating state for each of the reported incidents. The complaints include multiple fault conditions (
NHTSA's analysis of recall repair data, part sales, and owner complaints all indicate that the torque sensor continues to be the primary cause of EPAS system malfunctions in the subject vehicles after completion of the recall remedy. Through August 2017, Ford had completed the recall remedy in approximately 79 percent of affected vehicles, with approximately 2.8 percent of the repairs requiring replacement of the torque sensor or steering column due to faults detected in the torque sensor, PSCM, or power steering motor at the time the recall remedy was performed. The torque sensor kit accounted for almost two-thirds (64%) of such repairs. Similarly, analysis of part sales data determined that torque sensor kit sales make up 63 percent of EPAS part sales over the last 12 months.
NHTSA's analysis of complaints alleging post-remedy EPAS malfunctions diagnosed as torque sensor faults indicates that the faults are usually being detected before a loss of assist occurs (
As noted in the petition, a key metric of remedy effectiveness is its effect on crash and injury trends related to EPAS issues in the subject vehicles.
None of the injury allegations and only one of the incidents severe enough to require collision repairs involved a vehicle that had been remedied under the recall and that crash was reported as a minor parking lot collision resulting in $1,100 of front end damage. NHTSA's analysis of crash and injury allegations indicates that Ford's recall remedy appears to have been effective in mitigating the safety hazards associated with loss of power steering assist while driving in the subject vehicles.
The Petitioner references the similar experience of others as identified in complaints to NHTSA and through various websites and online forums in support of the position that Ford's remedy was not adequate. The Petitioner's claim is serious and the frustration Petitioner experienced is understood by NHTSA. However, the defect identified by Ford was “[l]oss of power steering assist while driving” caused by a particular defect in the torque sensor and not, as Petitioner understands it, by any EPAS malfunction requiring replacement of the steering column or torque sensor, under any operating condition, regardless of cause. NHTSA's research and knowledge on this subject supports Ford's conclusion that the safety risk is limited to the loss of power steering assist while driving.
In contrast, a driver who does not have power steering assist when starting the vehicle will know that immediately, as it will be difficult to turn the steering wheel at low speeds, and will be prepared to compensate for it while driving (or may choose not to drive). Ford's software update remedy, as explained in Ford's DIRs, “changes the torque sensor fault strategy and will no longer remove power steering assist during an ignition cycle for a single torque sensor fault. Additionally, the software update will provide audible and visual warnings to the driver in the unlikely event that a torque sensor fault is detected.”
Because Ford's change in fault logic prevents the loss of power steering assist while the vehicle is in operation (if there is only one fault), the safety risk,
This is not to say that the Petitioner may not have good reason to be displeased with the result. Approximately two months after receiving Ford's recall repair, Petitioner's vehicle suffered the problem that two months earlier would have entitled her to a remedy that instead would cost her approximately $1,000 to obtain. This is certainly cause for frustration. However, NHTSA's authority over vehicle manufacturers is limited to issues related to safety. In this instance, Ford's software update remedy removed the safety risk of a driver losing power steering assist, without warning, while operating the vehicle.
Because the nature of the complaint does not allow NHTSA to grant the petition, we will only briefly address the other factors set out in the regulations. On those points the agency notes that while the alleged breach of the obligation to remedy is serious, there is no factual breach in this instance and that NHTSA does not have any ability to resolve the problem because the problem is outside the agency's authority to enforce automotive safety. Further, the existence of similar complaints, both in online forums (as noted by the Petitioner) and in NHTSA's databases searched in reference to this petition, does not support granting this petition because, again, there is no factual breach. Additionally, given the circumstances here, a hearing is not necessary to evaluate the alleged problem. Therefore, NHTSA has decided a hearing should not be held.
The Petitioner alleges facts that understandably have caused frustration surrounding the repair and operation of her vehicle covered by NHTSA Recall No. 14V-284. However, the issues raised in the petition do not warrant a public hearing because the remedy Ford provided addresses the safety risk posed by loss of power steering assist. That safety risk arises from the unexpected change in steering effort the driver may experience while driving. Since Ford's remedy resolves the safety risk over which NHTSA has legal authority, NHTSA has decided not to hold a hearing on whether Ford has reasonably met the remedy requirements of the Safety Act.
For the reasons set forth above, NHTSA hereby denies Defect Petition DP15-001.
49 U.S.C. 30120(e); 49 CFR part 557; delegations of authority at 49 CFR 1.95 and 501.8.
U.S.-China Economic and Security Review Commission.
Notice of open public meetings.
Notice is hereby given of meetings of the U.S.-China Economic and Security Review Commission to review and edit drafts of the 2018 Annual Report to Congress. The Commission is mandated by Congress to investigate, assess, and report to Congress annually on the “the national security implications of the economic relationship between the United States and the People's Republic of China.” Pursuant to this mandate, the Commission will hold public meetings to review and edit drafts of the 2018 Annual Report to Congress.
The meetings are scheduled for Thursday, July 12, 2018, from 9:00 a.m. to 5:00 p.m.; Friday, July 13, 2018, from 9:00 a.m. to 5:00 p.m.; Thursday, August 2, 2018, from 9:00 a.m. to 5:00 p.m.; Friday, August 3, 2018, from 9:00 a.m. to 5:00 p.m.; Thursday, September 6, 2018, from 9:00 a.m. to 5:00 p.m.; Friday, September 7, 2018, from 9:00 a.m. to 5:00 p.m.; Thursday, October 4, 2018, from 9:00 a.m. to 5:00 p.m.; and Friday, October 5, 2018, from 9:00 a.m. to 5:00 p.m.
444 North Capitol Street NW, Room 231, Washington, DC 20001. Public seating is limited and will be available on a “first-come, first-served” basis.
Any member of the public seeking further information concerning these meetings should contact Kerry Sutherland, 444 North Capitol Street NW, Suite 602, Washington, DC 20001; telephone: 202-624-1454, or via email at
The Commission is subject to the Federal Advisory Committee Act (FACA) with the enactment of the Science, State, Justice, Commerce and Related Agencies Appropriations Act, 2006 that was signed into law on November 22, 2005 (Pub. L. 109-108). In accordance with FACA, the Commission's meetings to make decisions concerning the substance and recommendations of its 2018 Annual Report to Congress are open to the public.
• U.S.-China Economics and Trade Relations, including: Year in Review: Economics Trade; U.S.-China Economic Challenges; and China's Agricultural Policies: Trade, Investment, Safety, and Innovation.
• U.S.-China Security Relations, including: Year in Review: Security and Foreign Affairs; and China's Military Modernization.
• China and the World, including: Belt and Road Initiative; China's Relations with U.S. Allies; China and Taiwan; China and Hong Kong; and China and North Korea Contingencies.
• China's High Tech Development, including: Next Generation Connectivity.
The Commission will also recess the meetings around noon for a lunch break. At the beginning of the lunch break, the Chairman will announce what time the meetings will reconvene.
Employee Benefits Security Administration, Department of Labor.
Final rule.
This document contains a final regulation under Title I of the Employee Retirement Income Security Act (ERISA) that establishes additional criteria under ERISA section 3(5) for determining when employers may join together in a group or association of employers that will be treated as the “employer” sponsor of a single multiple-employer “employee welfare benefit plan” and “group health plan,” as those terms are defined in Title I of ERISA. By establishing a more flexible “commonality of interest” test for the employer members than the Department of Labor (DOL or Department) had adopted in sub-regulatory interpretive rulings under ERISA section 3(5), and otherwise removing undue restrictions on the establishment and maintenance of Association Health Plans (AHPs) under ERISA, the regulation facilitates the adoption and administration of AHPs and expands access to affordable health coverage, especially for employees of small employers and certain self-employed individuals. At the same time, the regulation continues to distinguish employment-based plans, the focal point of Title I of ERISA, from commercial insurance programs and other service provider arrangements. The final rule also sets out the criteria that would permit, solely for purposes of Title I of ERISA, certain working owners of an incorporated or unincorporated trade or business, including partners in a partnership, without any common law employees, to qualify as employers for purposes of participating in a bona fide group or association of employers sponsoring an AHP and also to be treated as employees with respect to a trade, business or partnership for purposes of being covered by the AHP. The regulation would affect AHPs, bona fide groups or associations of employers sponsoring such plans, participants and beneficiaries with health coverage under an AHP, health insurance issuers, and purchasers of health insurance not purchased through AHPs.
Amber Rivers or Suzanne Adelman, Office of Health Plan Standards and Compliance Assistance, Employee Benefits Security Administration, (202) 693-8335 or Janet K. Song, Office of Regulations and Interpretations, Employee Benefits Security Administration, (202) 693-8500. These are not toll-free numbers.
On October 12, 2017, President Trump issued Executive Order 13813, “Promoting Healthcare Choice and Competition Across the United States,” stating that “[i]t shall be the policy of the executive branch, to the extent consistent with law, to facilitate the purchase of insurance across State lines and the development and operation of a healthcare system that provides high-quality care at affordable prices for the American people.”
AHPs are an innovative option for expanding access to employer-sponsored coverage (especially for small businesses). Through AHPs, employers band together to purchase health coverage. By participating in AHPs, employees of small employers and working owners are able to obtain coverage that is not subject to the regulatory complexity and burden that currently characterizes the market for individual and small group health coverage and, therefore, can enjoy flexibility with respect to benefit package design comparable to that enjoyed by large employers. AHPs may also help reduce the cost of health coverage to participating employer members by giving groups of employers increased bargaining power vis-à-vis hospitals, doctors, and pharmacy benefit providers, and creating new economies of scale, administrative efficiencies, and a more efficient allocation of plan responsibilities (as the day-to-day administration of the benefit program is transferred from participating employers, who may have little expertise in these matters, to the AHP sponsor).
The Department expects that a substantial number of uninsured people will enroll in AHPs because the Department expects the coverage will be more affordable than what would otherwise be available to them, and other people who currently have coverage will replace it with AHP coverage because the AHP coverage will be more affordable or better meet their needs. The Department also notes the U.S. Congressional Budget Office (CBO) predicted that 400,000 people who would have been uninsured will enroll in AHPs and 3.6 million people will enroll in AHPs who would have had other coverage, resulting in 4 million additional people enrolling in AHPs.
Under current federal law and regulations, health insurance coverage offered or provided through an employer trade association, chamber of commerce, or similar organization, to individuals and small employers is generally regulated under the same federal standards that apply to insurance coverage sold by health
The term “employee welfare benefit plan” is defined in section 3(1) of ERISA to include, among other arrangements, “any plan, fund, or program . . . established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund or program was established or is maintained for the purpose of providing for its participants, or their beneficiaries, through the purchase of insurance or otherwise . . . medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment . . . .” Thus, to be an employee welfare benefit plan, the plan, fund or program must, among other criteria, be established or maintained by an employer, an employee organization, or both an employer and an employee organization. With respect to groups or associations of employers, only a group or association acting as an “employer” under ERISA section 3(5) is capable of establishing an employee welfare benefit plan.
The term “employer” is defined in section 3(5) of ERISA as “. . . any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan; and includes a group or association of employers acting for an employer in such capacity.” Thus, ERISA defines the term “employer” to include the “direct” (or common law) employer of the covered employees or “any other person acting indirectly in the interest of” the common law employer. Based on definitions in Title I of ERISA, and because Title I's overall structure contemplates employment-based benefit arrangements, DOL historically has recognized that, in the absence of the involvement of an employee organization, a group or association of employers may sponsor a single “multiple employer” plan, if certain factors are present.
Certain entrepreneurs have undertaken to market insurance products to employers and employees at large, claiming these products to be ERISA covered plans. For instance, persons whose primary interest is in profiting from the provision of administrative services are establishing insurance companies and related enterprises. The entrepreneur will then argue that [its] enterprise is an ERISA benefit plan which is protected, under ERISA's preemption provision, from state regulation . . . [W]e are of the opinion that these programs are not `employee benefit plans' . . . [T]hese plans are established and maintained by entrepreneurs for the purpose of marketing insurance products or services to others. . . . They are no more ERISA plans than is any other insurance policy sold to an employee benefit plan.
In defining the type of employer group or association that can act as an ERISA section 3(5) employer in sponsoring a single “multiple employer” plan, DOL has long considered whether the group or association has a sufficiently close economic or representational nexus to the employers and employees that participate in the plan. This “commonality of interest” standard is intended to distinguish bona fide groups or associations of employers that provide coverage to their employees and the families of their employees from arrangements that more closely resemble State-regulated private insurance offered to the market at large.
Courts have also held that there must be some cohesive relationship between the provider of benefits and the recipient of benefits under the plan so that the entity that maintains the plan and the individuals who benefit from the plan are tied by a common economic or representational interest.
DOL advisory opinions and court decisions have applied a facts-and-circumstances approach to determining whether a group or association of employers is a bona fide employer group or association capable of sponsoring an ERISA plan on behalf of its employer members. This analysis has focused on three broad sets of issues, in particular: (1) Whether the group or association is a bona fide organization with business/organizational purposes and functions unrelated to the provision of benefits; (2) whether the employers share some commonality and genuine organizational relationship unrelated to the provision of benefits; and (3) whether the employers that participate in a benefit program, either directly or indirectly, exercise control over the program, both in form and substance.
The Department's historical approach to these issues was designed to ensure that the Department's regulation of employee benefit plans is focused on employment-based arrangements, as contemplated by ERISA, rather than merely commercial insurance-type arrangements that lack the requisite connection to the employment relationship. But neither the Department's previous advisory opinions, nor relevant court cases, foreclose DOL from adopting a more flexible test in a regulation, or from departing from particular factors previously used in determining whether a group or association can be treated as acting as an “employer” or “indirectly in the interest of an employer” for purposes of the statutory definition. Rather, the terms “employer” and “indirectly in the interest of an employer” are ambiguous as applied to a group or association in the context of ERISA section 3(5), and the statute does not specifically refer to or impose the “commonality” test on the determination of whether a group or association acts as the “employer” sponsor of an ERISA-covered plan within the scope of ERISA section 3(5).
In addition to the text and structure of Title I of ERISA, a regulation under ERISA section 3(5) should be guided by ERISA's purposes and appropriate policy considerations, including the need to expand access to healthcare and to respond to changes in law, market dynamics, and employment trends. Thus, Executive Order 13813 directed the Department to address the problem that too many legitimate employer associations cannot sponsor ERISA-covered plans because they do not satisfy the requirements for being treated as an “employer” or as “acting in the interest of” an employer under the Department's previous sub-regulatory guidance (“pre-rule guidance”). Instead, too many association arrangements for health coverage are treated as a mere collection of distinct plans, each separately sponsored by individual employers. Under the Department's pre-rule guidance, the association in most cases is treated as the mechanism by which each individual employer obtains benefits and administrative services for its own separate plan. To the extent the separate employers are small employers, their insurance is subject to regulation as small group coverage for purposes of the Patient Protection and Affordable Care Act (ACA). Similarly, in the case of sole proprietors and other business owners that do not also employ other individuals, the insurance coverage they obtain for themselves through an association is treated as individual coverage. As a result, associations that want to form AHPs and existing AHPs currently face a complex and costly compliance environment insofar as the various employer members of the association and the association's health insurance coverage arrangement may simultaneously be subject to large group, small group, and individual market regulation, which undermines one of the core purposes and advantages of an association forming and its employer members joining an AHP (
After Executive Order 13813 was issued, on January 5, 2018, the Department published a proposed regulation (“Proposed Rule”) on the definition of “employer” in ERISA section 3(5) that would broaden the types of employer groups or associations that may sponsor a single group health plan under ERISA for the benefit of the employees of the group or association's member employers. The Proposed Rule would broaden the criteria for a group or association to satisfy the “commonality of interest” requirement, and provide additional flexibility for employer groups or associations to offer health coverage in a manner that would be considered a single group health plan. Specifically, under the Proposed Rule, employer groups or associations would meet the commonality of interest criteria if their members were in the same trade, industry, line of business, or profession, or maintained their principal places of business in a region that does not exceed the boundaries of the same State, or in the same metropolitan area (even if the metropolitan area includes more than one State).
The Proposed Rule also included a provision that would establish clear criteria under which working owners, such as sole proprietors and other self-employed individuals, could participate in AHPs. Furthermore, while the Department's regulation at 29 CFR 2510.3-3(b) (which excludes “plans without employees” from the definition of employee benefit plans covered by Title I of ERISA) does not prevent sole proprietors or other working owners from being participants in broader plan arrangements, such as AHPs, the Proposed Rule also included an amendment to that regulation that would expressly permit participation of working owners without any common law employees in AHPs. Under the Proposed Rule, the participants in an AHP thus could consist of common law employees, common law employees and working owners, or solely of working owners. In all cases, the working owner would be treated as an employee and the business as the individual's employer for purposes of being an employer member of the bona fide group or association and an employee participant in the AHP.
The Department received over 900 comments in response to the Proposed Rule from a wide range of stakeholders, including group health plan participants, consumer groups, employer groups, individual employers (including sole-proprietors), employer associations and other business groups, individual health insurance issuers, trade groups representing health insurance issuers, State regulators, and existing AHPs. The public comments submitted in response to the Proposed Rule were posted on the Department's website at
After careful consideration of the issues raised by the written public comments, the Department decided to adopt the Proposed Rule as a final rule, with certain modifications made in response to public comments. Small businesses are crucial to the U.S. economy. Small business owners are often anxious about their ability to obtain healthcare coverage for their employees through employee benefit plans. Similarly, sole proprietors and other self-employed individuals who do not have employees also find it difficult to obtain affordable coverage for themselves and their families through employee benefit plans, or through individual coverage. The Department believes that this final rule will promote broader availability of group health coverage for these small business owners and self-employed people, and help alleviate their problems of limited or non-existent affordable healthcare options for these small businesses and self-employed people. The Department believes it is important to provide an alternative to the restrictions present in the Department's pre-rule guidance that have hampered the ability of small businesses to join together to purchase and provide affordable, quality health coverage for themselves, their employees and their families. The Department continues to believe that providing additional opportunities for employer groups or associations to offer health coverage to their members' employees under a single plan may, under the final rule, provide many more small businesses and self-employed individuals affordable alternatives not currently available in the individual or small group markets. The provisions in the final rule are designed to achieve the same goals that the Department's guidance regarding AHPs has always pursued—
The Department also continues to believe that the final rule will prompt some working owners who were previously uninsured and some small businesses that did not previously offer health coverage to their employees, to enroll in AHPs, and similarly prompt some small businesses with insured health plans to switch from their existing individual or small group policies to AHPs. As under the Proposed Rule, AHPs that buy insurance would not be subject to the insurance look-through doctrine as set forth in 2011 guidance from the Centers for Medicare & Medicaid Services (CMS);
The final rule adopts a new regulation at 29 CFR 2510.3-5. Subsection (a) of the final rule describes the general purpose of the regulation as clarifying which persons may act as an “employer” within the meaning of ERISA section 3(5) in sponsoring a multiple employer group health plan. Subsection (b) sets forth criteria for a bona fide group or association of employers capable of establishing a group health plan that is an employee welfare benefit plan. Subsection (c) sets forth criteria for the requisite commonality of interest that employer members of a group or association must have to constitute a bona fide group or association of employers. Subsection (d) establishes nondiscrimination requirements for any health coverage offered by the bona fide group or association, including examples that illustrate the application of those requirements. Subsection (e) describes the types of working owners without common law employees who can qualify as employer members and also be treated as employees for purposes of being covered by the bona fide employer group or association's health plan. Subsection (f) describes the effective date and applicability dates for the final rule. Subsection (g) is a severability provision making it clear that individual provisions in the final rule are independent of, and severable from, other provisions of the final rule.
The final rule establishes alternative criteria from those in the Department's existing sub-regulatory guidance for a bona fide group or association of employers capable of establishing a multiple employer group health plan that is an employee welfare benefit plan and a group health plan as those terms are defined in ERISA. The final rule has been developed in consultation with the Department of Health and Human Services (HHS), the Centers for Medicare and Medicaid Services (CMS), the Department of the Treasury (Treasury), and the Internal Revenue Service (IRS), with which the Department is working to implement the ACA, Executive Order 13813, and Executive Order 13765.
The principal objective of the final rule is to expand employer and employee access to more affordable, high-quality coverage. Some commenters expressed concern, however, that application of the final rule's requirements to existing AHPs could reduce coverage. They argued that existing AHPs that relied on the Department's pre-rule guidance on “bona fide group or association of employers” did not design their operations with the new requirements in mind. As a consequence, existing AHPs may not be able to comply with the new conditions without reducing existing options for affordable healthcare. The Department agrees that would be an undesirable result. Accordingly, the Department notes that AHPs may continue to rely upon the Department's previous guidance.
A central aim of the new regulation is to provide an additional opportunity beyond those available under pre-rule guidance for employer groups or associations to offer health coverage to their members' employees under a single plan. While the Department believes that it is appropriate to expand the availability of AHPs to the new arrangements permitted under the final rule, it does not suggest that arrangements that comply with its pre-rule guidance fail to meet the statutory definition of employer. An employer group or association that complies with either the requirements under the new rule or the pre-rule guidance is considered to be acting in the interest of participating employers. In either case, the group or association acts as an “employer” within the meaning of ERISA section 3(5), and has a sufficient nexus to employers and employees in the AHP to distinguish it from a mere commercial health insurance issuer that lacks the requisite connection to the employment-based relationships that ERISA regulates.
Accordingly, the final rule includes additional regulatory text to make it clear that this final rule does not supplant the Department's previously issued guidance under ERISA section 3(5), but rather provides an additional basis for meeting the definition of an “employer” under ERISA section 3(5). The Department emphasizes that both existing and new employer groups or associations that conform to the Department's pre-rule guidance can sponsor an AHP.
Paragraph (b) of the Proposed Rule defines certain criteria for a “bona fide group or association of employers” that may establish a group health plan that is an employee welfare benefit plan as those terms are defined in ERISA.
Some commenters additionally argued that the Department should remove the Proposed Rule's “commonality of interest” and “control” requirements altogether because, in the commenters' view, these requirements are not supported by the statutory text of ERISA. These commenters argued that ERISA section 3(5) does not expressly require either commonality or control but rather, requires only that the group or association of employers act indirectly in the interest of the group or association's employer members. They
Other commenters argued that the Department's proposal to redefine the criteria for a bona fide group or association such that the group or association of employers and the individuals that benefit from the plan are no longer required to be tied by a common economic or representation interest, unrelated to the provision of benefits, is inconsistent with allegedly unambiguous statutory language in ERISA and several decades of case law applying ERISA, is in excess of statutory authority, and is arbitrary and capricious under the Administrative Procedure Act (“APA”). As discussed more fully below, although the Department does not believe that the proposal was inconsistent with unambiguous statutory language or lacked reasoned analysis, the Department has decided that the final rule should require that a bona fide group or association of employers have at least one substantial business purpose unrelated to the provision of benefits to be eligible to sponsor an ERISA-covered group health plan, although the final rule makes clear that a group or organization's principal purpose may be the provision of benefits.
Several commenters also argued that the PHS Act, the ACA, and ERISA manifest a clear intent to treat the group markets and individual market as distinct, and that the Proposed Rule conflicts with the text of the ACA by allowing small employers and individuals, who are not subject to the employer shared responsibility provisions under section 4980H of the Code and who were supposed to be purchasing insurance coverage that is subject to the essential health benefits (“EHB”) requirements, to band together to obtain health insurance that does not comply with all the ACA insurance rules applicable to small group market insurance. The Department disagrees that the Proposed Rule is unlawful under the ACA. As explained in the 2011 CMS guidance, although the ACA revised and added to Title XXVII of the PHS Act, it did not modify the underlying PHS Act framework for determining whether health insurance coverage issued through associations was individual or group health insurance coverage. The PHS Act derives its definitions of group health plan and employer from the ERISA definitions and where the association of employers is, in fact, sponsoring the group health plan and the association itself is deemed the “employer,” the association itself is considered a group health plan for purposes of the ACA provisions in Title XXVII of the PHS Act. Single plan MEWAs pre-date the ACA and continue to play an important role in the existing regulatory environment under the PHS Act, the ACA, and ERISA. Thus, employer groups already can group together to collectively sponsor ERISA plans, and those plans have to comply with applicable group market rules. In line with that recognized practice, here the # DOL has simply used its rulemaking authority to define a statutory term in a way that allows employers to join together more broadly to promote the adoption and administration of AHPs and expand access to affordable health coverage, especially among small employers and self-employed individuals.
Paragraph (b)(1) of the Proposed Rule stated that a group or association may act as an employer within the meaning of ERISA section 3(5) for purposes of sponsoring a group health plan if the group or association exists for the purpose, in whole or in part, of sponsoring a group health plan that it offers to its employer members. This represented a departure from previously issued sub-regulatory guidance, which required a group or association acting as an employer to exist for purposes other than providing health benefits.
Many commenters, including some who were otherwise supportive of the Proposed Rule, objected to this provision. Several commenters believed that, because most small businesses already have the opportunity to belong to a chamber of commerce or other professional association, allowing a group or association to be formed solely for the purpose of sponsoring a group health plan is unnecessary to achieve the Department's goals. Commenters believed that a proliferation of groups or associations established for the exclusive purpose of sponsoring an AHP could oversaturate the market, diminishing the value of existing trade and professional groups or associations which, for decades, have focused on building and maintaining relationships with their members and serving their members' needs on a multitude of issues well beyond health benefits. Similarly, it could also diminish the market power of existing AHPs and those that may be formed by groups and associations that exist for other purposes, which could limit their opportunities to achieve the economies of scale that make AHPs an attractive vehicle for providing affordable coverage in the first place. Commenters also expressed the view that established industry and trade groups and associations have strong incentives to maintain their good reputation and favorable historical record of responsibly acting in the interests of their employer members. These reputational incentives mitigate the risk that they would set up poorly managed AHPs or provide inadequate coverage. In contrast, these commenters argued, allowing groups and associations formed for the sole purpose of offering an AHP to be considered bona fide groups or associations of employers could invite unscrupulous promoters to enter the market with mismanaged and thinly funded AHPs and could increase the prevalence of fraudulent and abusive practices. Additionally, according to such commenters, newly-formed groups and associations are likely to lack the knowledge and expertise necessary to prudently operate an AHP, subject to all of the complexities of modern health markets and regulatory structures. Commenters noted that individuals and small businesses are not typically sophisticated purchasers of group health coverage and may confront challenges in evaluating AHP options. As a result, these persons may be more likely to make imprudent decisions that would drive them to select plans with the lowest premiums without understanding the impact on access to care, the rights of their employees, and risks associated with fraud and insolvency. Several commenters stated that self-insured AHPs in particular were ripe for abuse and recommended that groups and associations that do not exist for purposes other than sponsoring
Commenters offered numerous suggestions for alternative criteria for determining a bona fide group or association of employers for purposes of the new rule with the aim that those eligible be limited to legitimate, well-managed, and well-intended organizations with the ability to properly operate an AHP. Some commenters supported retaining the requirement in the Department's pre-rule guidance that the group or association exist for other purposes unrelated to the provision of benefits in order for the group or association to qualify as bona fide. Some suggested requiring a group or association to exist for a specified minimum length of time before it could sponsor an AHP. Others suggested requiring that the group or association meet certain criteria for tax-exempt organizations, have minimum revenues unrelated to AHP operations, or demonstrate by other means the capacity to oversee the administrative requirements associated with managing the complexities of an AHP in order to be considered a bona fide group or association.
After consideration of the public comments, the Department agrees that some modification of this provision is appropriate. The intent of this final rule is to expand access to AHP coverage options, while protecting plan participants and beneficiaries from imprudent, abusive, or fraudulent arrangements. Removing undue restrictions for existing groups and associations as well as for newly-formed groups and associations of employers and working owners is critical to achieving the Department's goal of expanding choice in health coverage options. But the Department understands the concerns regarding operational risks such as fraud and insolvency that commenters believed might be more likely with respect to AHPs offered by newly-formed groups and associations that exist solely for the purpose of sponsoring an AHP.
Accordingly, the Department is modifying this provision in the final rule to establish a general legal standard that requires that a group or association of employers have at least one substantial business purpose unrelated to offering and providing health coverage or other employee benefits to its employer members and their employees, even if the primary purpose of the group or association is to offer such coverage to its members. Although the final rule does not define the term “substantial business purpose,” the rule contains an explicit safe harbor under which a substantial business purpose is considered to exist in cases where the group or association would be a viable entity even in the absence of sponsoring an employee benefit plan. The final rule also states that a business purposes is not required to be a for-profit purpose.
These modifications emphasize that nothing in the final rule should be read as prohibiting a bona fide group or association—formed either before or after the issuance of this final rule—from sponsoring an AHP as its primary purpose, provided that it also has a substantial business purpose unrelated to sponsorship of the AHP. Thus, for instance, a group or association formed after this final rule is issued and that has a primary purpose of providing health coverage, but that also convenes conferences and provides educational materials and opportunities to its members, would satisfy this rule's requirements, if the convening and educational activities are sufficiently substantial. The Department believes these modifications assist substantially in drawing the line between traditional health insurance issuers (which typically exist only to underwrite and sell insurance) on the one hand, and those that qualify as an “employer” under section 3(5) of ERISA, on the other (because of their other substantial business purpose).
Paragraph (b)(3) of the Proposed Rule required that a group or association have “a formal organizational structure with a governing body” as well as “by-laws or other similar indications of formality” appropriate for the legal form in which the group or association operates in order to qualify as bona fide. Commenters generally supported these provisions on the basis that having such formalities will not only serve to clarify the rights and obligations of members of the association or group, but to promote accountability by enabling regulators and others to readily identify those parties who are responsible for operations, including the establishment and maintenance of the group health plan. These commenters suggested that the existence of formalized and robust organizational structures could be an important form of protection against fraud and insolvency. For these reasons, the final rule adopts these provisions without modification. There were requests for minor wording changes to paragraph (b)(3) to ensure that certain ongoing entities clearly fit within the
Paragraph (b)(4) of the Proposed Rule required that member employers control the functions and activities of the group or association, including its establishment and maintenance of the group health plan, in order for it to qualify as a bona fide group or association. Such control under the Proposed Rule could be direct or it could be indirect through the regular election of directors, officers, or other similar representatives that control the group or association and the establishment and maintenance of the plan. The Department noted in the preamble to the Proposed Rule that this “control test” was intended to largely duplicate the conditions in the Department's pre-rule guidance under ERISA section 3(5).
Some commenters who supported the Proposed Rule acknowledged that a control test is necessary to ensure that bona fide groups or associations act as an “employer” in relation to the group health plan and “in the interest” of participating employers, as required by ERISA section 3(5). Indeed, some of these commenters believe that this provision would assume heightened importance in light of other provisions in the Proposed Rule, notably the special rule on the dual treatment of working owners as employers and employees.
Some commenters who generally opposed the Proposed Rule were skeptical that the proposed control test could adequately protect against fraudulent MEWAs
A few commenters opposed the proposed control test entirely. These commenters generally expressed apprehension about the logistics of requiring participating employer members to control the functions and activities of a large group or association in order for it to qualify as bona fide. These commenters argued that at least for well-established groups or associations, which may have hundreds or even thousands of member employers and working owners and already act in the interest of their members, the requirement is impractical and unnecessary. One commenter argued that the control test set forth in the Proposed Rule should be recast as a safe harbor and that, if a group or association cannot meet the safe harbor's specific control criteria, it should be permitted to demonstrate in other ways that it is looking out for and acting in the interest of its members and their employees.
After careful consideration of these comments, the Department disagrees with the commenters who believe the proposed control test is unnecessary or that it will be ineffective, and the final rule adopts the proposed control test, with certain revisions as described below. The Department is of the view that the control test is necessary to satisfy the statutory requirement in ERISA section 3(5) that the group or association must act “in the interest of” the employer members in relation to the employee benefit plan. It will also help prevent formation of commercial enterprises that claim to be AHPs but, in reality, merely operate as traditional health insurance issuers, in all but name.
The regulatory text in the final rule is slightly different than in the Proposed Rule. Although the Department's intent in the Proposed Rule was to replicate the control test as it exists in the Department's previously-issued sub-regulatory guidance under ERISA section 3(5), a number of commenters questioned whether the language in the Proposed Rule would effectively accomplish that objective. The regulatory text in the final rule is intended to better align the control test in paragraph (b)(4) with the Department's pre-rule guidance under ERISA section 3(5), including the requirement that control exist in form and substance. As revised, the control test provides that the functions and activities of the group or association must be controlled by its employer members, and the group or association's employer members that participate in the group health plan must control the plan. Control must be present both in form and in substance. Whether the requisite control exists is determined under a facts and circumstances test.
Several commenters requested guidance and clarification, including specific examples if possible, on what it would mean for participating employers (particularly very small employers and working owners) to control the functions and activities of the group or association or the establishment and maintenance of the plan, especially in cases where the group or association and plan are extremely large and the primary purpose of the group or association is to sponsor the plan. These commenters expressed concern that the control test, as proposed, could be construed as requiring that participating employers be responsible for management and day-to-day operations of the group or association and AHP in order for the group or association to qualify as bona fide. Thus, the commenters specifically asked that the final rule clarify the type and degree of control that employer members must exercise over the group or association in order for it to qualify as bona fide, and suggested that the Department identify specific activities or other criteria that would be sufficient to demonstrate the necessary degree of control. For instance, these commenters requested clarification on whether the Department intended that the proposed control test would require participating employers to actively manage administrative and operational functions of the AHP, such
The final rule does not require group or association members to manage the day-to-day affairs of the group or association or the plan in order for the group or association to qualify as bona fide. As has long been the case, the Department will consider all relevant facts and circumstances in determining whether the functions and activities of the group or association are sufficiently controlled by its employer members, and whether the employer members who participate in the group or association's group health plan sufficiently control the group health plan. In the Department's view, the following factors, although not exclusive, are particularly relevant for this analysis: (1) Whether employer members regularly nominate and elect directors, officers, trustees, or other similar persons that constitute the governing body or authority of the employer group or association and plan; (2) whether employer members have authority to remove any such director, officer, trustees, or other similar person with or without cause; and (3) whether employer members that participate in the plan have the authority and opportunity to approve or veto decisions or activities which relate to the formation, design, amendment, and termination of the plan, for example, material amendments to the plan, including changes in coverage, benefits, and premiums. The Department ordinarily will consider sufficient control to be established if these three conditions are met.
A number of commenters raised issues regarding the interrelationship between the control test and the status of a group or association's board members under the definition of “fiduciary” under section 3(21) of ERISA. Whether, and the extent to which, any particular board members are fiduciaries under ERISA turns on whether they engage in activity described in section 3(21) of ERISA with respect to the AHP. Thus, although in many circumstances board members in fact will be fiduciaries under ERISA, the relevant facts and circumstances of the particular situation will dictate the outcome. Some commenters suggested that the final rule should require board members to acknowledge in writing their status as fiduciaries under ERISA. Section 402 of ERISA already provides that every employee benefit plan shall be established and maintained pursuant to a written instrument, and that such instrument shall provide for one or more named fiduciaries who jointly or severally shall have authority to control and manage the operation and administration of the plan. Some commenters suggested that the final rule could contain a deeming provision under which the control test would be considered satisfied if a group or association's board members (along with other officers) acknowledged in writing their fiduciary status. Whether group or association members in fact have sufficient control of the functions and activities of the group or association for it to be considered bona fide, however, is entirely independent of and unrelated to whether the group or association's key officials or board members are fiduciaries of the AHP. For these reasons, the Department declines to adopt the suggestions of these commenters.
Other commenters suggested revisions that the Department considers to be unnecessary, unduly burdensome, or beyond the scope of this rulemaking. For example, one suggestion was that the Department should require that a majority of the group or association's board members be participating employer members in order for it to be considered bona fide. Another suggestion was that the Department should dictate that groups or associations grant each employer member voting rights with respect to affairs of the group or association, health plan, or both, or require that groups or associations confer officer or director rights or status to some subset of participating employer members in order for the group or association to be considered bona fide. While these factors could be relevant to whether the members had the requisite degree of control, the Department is reluctant, and accordingly declines, to dictate specific governance structures (
The Proposed Rule provides that only employees and former employees of employer members and their families or other beneficiaries (for example, spouses and dependent children) would be able to participate in a group health plan sponsored by the group or association. Commenters asked the Department to clarify or modify the definition of the individuals who are eligible to participate in an AHP. Some commenters said the rule should expressly state that retirees and COBRA-eligible persons
The Department agrees that some clarification of the definition of eligible participant is appropriate. Thus, the final rule provides that an eligible participant includes employees of a current employer member of the group or association, former employees of a current employer member of the group or association who became entitled to coverage under the group's or association's group health plan when the former employee was an employee of the employer, and beneficiaries of
The Department also agrees with the commenters who suggested that it use the existing ERISA-defined term “beneficiary” rather than “spouses,” “dependent children,” or “family member.” Since an AHP may provide coverage to any ERISA beneficiaries (for example, dependents for federal tax purposes) and is not limited to spouses or dependent children, or other family members, the Department agrees that using the term “beneficiary” is more accurate.
The Department also agrees that it is not unusual for employer groups or associations to be established as separate legal entities that have their own employees, and for the group or association to choose to participate in the group or association's arrangement for the provision of health benefits as a way of providing benefits to its own employees. In the case of a geography-based AHP under the final rule, the group or association could be a participating employer by having its principal place of business within the relevant state or metropolitan area. In the case of an industry-based AHP under the final rule, the Department added a provision to the final rule to explicitly state that the group or association will be treated as being in the same trade or industry as the other employer members of the group or association.
Some commenters asked the Department to hold harmless health insurance issuers and third party administrators who exercise diligence and good faith in relying on the bona fide group or association's representations of participant eligibility in cases where an ineligible individual is enrolled in an AHP. Another commenter asked that issuers and administrators be given access to the documentation necessary to verify employee eligibility. Issues of legal responsibility for operational errors in the establishment or implementation of an AHP would invariably depend on the particular facts and circumstances involved, including contractual provisions establishing the parties' respective rights and obligations. In the Department's view, this definitional rulemaking is not an appropriate vehicle for addressing such issues. Similarly, although the Department would expect a bona fide group or association to furnish its service providers (including issuers and third party administrators) access to documents and information necessary for those service providers to perform their obligations, the establishment of such information- sharing obligations is beyond the scope of this rulemaking under ERISA section 3(5).
Several commenters were concerned that if an AHP made coverage available to eligible participants on a continuous basis, as opposed to limiting enrollment to specified periods, the AHP could be subject to adverse selection as participants switched in and out of AHP coverage according to their current health needs. This could, in turn, make it difficult for AHPs to achieve stable risk pools and create challenges for issuers when setting rates for the policies they would offer to fully-insured AHPs. These commenters suggested that a final rule should require, or at least permit, AHPs to set temporal restrictions on enrollment such as only making coverage available to eligible participants during set open enrollment periods.
The Department declines to impose any specific requirements for AHPs with respect to the use of open enrollment periods. Although open enrollment periods are common for participant enrollment in group health plans, they are not required under any provision of Federal law and nothing in these final rules affects or restricts an AHP's ability to limit open enrollment periods.
The final rule retains the requirement in the Proposed Rule that the group or association sponsoring the AHP cannot be a health insurance issuer or owned or controlled by a health insurance issuer in order for it to qualify as bona fide. Several commenters supported this requirement as important to differentiate bona fide employer groups from commercial entities selling insurance to employers. Others asked the Department to strengthen this prohibition further by including other entities with similar conflicts of interest, such as healthcare systems and network providers. Some commenters also sought clarification that this requirement would not prohibit insurance issuers from serving as third party administrators or providing certain services to bona fide groups or associations. Those commenters explained that health insurance issuers and insurance agents and brokers often provide significant assistance to groups or associations, such as plan design advice and development, marketing, and administrative services (including claims administration).
Other commenters opposed this requirement and argued that insurance issuers should be allowed to form and operate AHPs because, they argued, issuers are uniquely capable of guarding against fraud and are already subject to
Other commenters noted that it is not uncommon for an employee of an issuer to sit on the boards of employer groups or associations. Such commenters asked the Department to confirm that an insurance issuer, agent, or broker providing services to an AHP or having members on the governing body of the bona fide group or association or the AHP would not be considered to be “controlling” the bona fide group or association. One commenter also suggested that the final rule should allow AHPs to engage in joint ventures with insurance companies.
The Department believes that it is important to continue to preclude health insurance issuers in their capacity as health insurance issuers from constituting or controlling a bona fide group or association under the final rule. As the Department explained in the preamble to the Proposed Rule, this prohibition was designed to draw a line between the sorts of employer-sponsored arrangements that are regulated by ERISA and commercial insurance arrangements that lack the requisite connection to the employment relationship.
The Department agrees that, just as in the case of health insurance issuers, a group or association or plan that is controlled by a network provider, a healthcare organization, or some other business entity that is part of the U.S. healthcare delivery system would not be a bona fide group or association or AHP under this rule. The Department does not believe it is necessary or advisable to try to include an exhaustive list of all such entities in this provision of the rule. This is because such a control relationship would result in the employer group or association and plan failing the requirements in the final rule that the group or association must be controlled by its employer members and that the AHP be controlled by the employer members who participate in the plan. The Department acknowledges that the provision prohibiting control by a health insurance issuer could similarly be said to be redundant, however, in light of the fact that a key objective of various conditions in this final rule is to distinguish AHPs as employment-based benefit plans from commercial insurance arrangements, the Department believes that highlighting health insurance issuers in this provision helps reinforce that objective. The Department believes it would be consistent with the Department's purpose in including the health insurance issuer provision in the rule, and would also respond at least in part to the commenters, if the provision in the final rule was revised to expressly include subsidiaries of affiliates of health insurance issuers. The final rule includes such a revision. This provision of the final rule has been further revised to make clear that it does not preclude health issuers, their subsidiaries, or affiliates from being involved in the control of a bona fide group or association or AHP in such entity's capacity as a participating employer (
Moreover, nothing in this rule precludes a health insurance issuer or other business entity that is part of the U.S. healthcare delivery system from providing administrative services to an AHP. For example, a health insurance issuer could provide third party claims administration and payment services to an AHP. Similarly, a health insurance issuer could provide services to an AHP such as medical provider network design, pharmacy network design, formulary design, recordkeeping services, reporting and disclosure services, wellness program administration, 24-hour nurse helpline services, or audits services, as well as assistance in setting up the AHP.
Paragraph (c) of the Proposed Rule addressed the “commonality of interest” required for a group or association of employers to sponsor an AHP. Under the Proposed Rule, commonality could be established by employers that (1) are in the same trade, industry, line of business, or profession; or (2) have a principal place of business within a region that does not exceed the boundaries of the same State or the same metropolitan area (even if the metropolitan area includes more than one State). The final rule adopts the commonality of interest test from the Proposed Rule without substantive change.
Commenters generally supported the provision in the Proposed Rule establishing trade, industry, line of business, or profession, as a basis for finding commonality of interest, noting that groups or associations comprised of these classes of employer groups tend to be more stable, provide more predictable risk pools, allow formation of AHPs that are tailored to healthcare needs in the industry, and are more cost effective. Many commenters, however, requested that the Department clarify the terms “trade,” “industry,” “line of business,” and “profession” so that persons interested in forming AHPs would have more certainty regarding the permissible scope and membership classifications that would satisfy the rule. Some of these commenters suggested that the Department develop specific definitions for these terms, including one suggestion that these definitions dovetail with existing definitions of similar terms for VEBAs under Treasury Regulations.
Determinations of what is a “trade,” “industry,” “line of business,” or “profession,” as well as whether an employer fits into one or more these categories, are based on all the relevant facts and circumstances. The Department is not persuaded that embracing proscriptive definitions or sanctioning a specific industry classification list is appropriate because doing so might interfere with the ability of groups or associations to determine the scope of their own membership. In general, the Department intends for these terms to be construed broadly to expand employer and employee access to AHP coverage.
Several commenters requested clarification on whether subsets of businesses clearly within trades, industries, or professions could further organize themselves around shared principles, values, or beliefs that, alone, would not be sufficient to establish commonality under paragraph (c) of the final rule. According to the commenters, these situations tend to focus on the characteristics of the owners, such as owners who are women, minorities, or veterans, or the structure of the businesses, such as franchises or companies owned by an employee stock ownership plan (ESOP). Commenters suggested that subset-associations organized in this manner may share more in common than those linked by line of business alone, including a shared culture or regulatory scheme. As mentioned above, the commonality test is based on all the relevant facts and circumstances. In the Department's view, therefore, a subset of otherwise eligible employers does not cease to have the requisite level of commonality under the final rule merely because it chooses to further segment itself inside its trade, industry, or profession into smaller groups based on other, reasonable similarities among employers, and thus such segmentation is permitted, provided that it is not a subterfuge for discriminating based on a health factor as prohibited under paragraph (d) of this final rule.
The Proposed Rule's definition also permits a bona fide employer group or association to base its membership on a common geographic location, even if the membership is comprised of unrelated employers in multiple unrelated trades, industries, lines of business or professions. To meet the terms of the geographic test, the group or association's employer members each must have a principal place of business within a region that does not exceed the boundaries of the same State or metropolitan area (even if the metropolitan area includes more than one State). The preamble to the
The Department invited comments specifically on whether more clarification would be helpful regarding the definition of a metropolitan area. The Department asked in particular whether a federal designation by the U.S. Census or the Office of Management and Budget (OMB), which delineates and defines Metropolitan and Micropolitan Statistical Areas according to published standards (see
Many commenters supported this provision and said a geography-based ability to satisfy the commonality requirement would provide employer groups and associations with important flexibility and allow more employers to join together to secure lower cost healthcare coverage for themselves and their employees through AHPs. Many commenters supporting an expansion of the commonality of interest test to allow employers with a principal place of business in a single State said that such a provision in the final rule would allow well-established organizations like a State chamber of commerce to take advantage of the new health coverage choice that AHPs represent. Many commenters also sought clarification of what would constitute a metropolitan area for purposes of the final rule. Some commenters suggested that the final rule define a metropolitan area consistent with definitions developed by OMB and used by the Census Bureau and other federal agencies, such as the Bureau of Labor Statistics (BLS). Some of those commenters noted that although they would prefer the OMB Metropolitan Statistical Areas definition, other federal sources would be acceptable. The commenters noted that OMB, in identifying Metropolitan Statistical Areas, requires that the regions demonstrate high degrees of economic and social ties, and that Metropolitan Statistical Areas could, therefore, serve as appropriate geographic markers for bona fide associations and AHPs. Some of those commenters noted that one of the benefits of using the OMB definition of Metropolitan Statistical Areas is that it is an objective and standard benchmark that would create a level of certainty for groups and associations to use in structuring the scope of their bona fide group and association and their AHP. Others suggested that the rule expressly allow associations and groups sponsoring AHPs to rely on OMB's definitions of Metropolitan and Micropolitan Statistical areas. One commenter urged the Department not to limit the geographic commonality standard to one State or a single Metropolitan Standard Area, claiming it was arbitrary because employers that satisfy the commonality of interest requirement on the basis of trade, industry, line of business, or profession are not subject to geographic constraints and any employer group or association that sponsors an AHP will demonstrate that it acts in the interest of its members by meeting the control requirements. The commenter suggested that if any geographic limitation were to be included in the final rule it should allow employers in three contiguous States to meet the test.
Other commenters generally opposed the geography-based expansion of the commonality of interest test, saying it is so broad that employers with no genuine common interest other than being in the same State will be allowed to join together to offer AHPs, opening the door to fraudulent entities to offer coverage. These commenters expressed concern that the proposed test was so permissive as to promote the formation of AHPs across State lines with the result that some sponsors of AHPs might attempt to manipulate geographic boundaries with the goal of choosing particular State regulators. They argued that the ability of State insurance regulators to assist consumers would also decrease because State regulatory jurisdiction typically does not extend across State lines. One commenter said that the final rule should allow multi-State metropolitan areas only if, after consultation with the NAIC, the Department finds that such a provision would not diminish the ability of States to have proper oversight. One commenter said that if the final rule envisions AHPs operating in multiple States, then the Department should establish an independent task force to resolve issues of interstate regulation and oversight among impacted States. One commenter suggested that the Department create a process to review and issue a determination that all of the employer members of a bona fide group or association sponsoring an AHP have a principal place of business in the same metropolitan area. The commenter reasoned that verification that the plan service areas align with the employers' principal places of business is essential to determining an accurate quote for the cost of coverage.
Some commenters said the “principal place of business” standard was confusing. They said that health insurance issuers typically declare a “situs” State for large employer plans that is typically the location of the company's headquarters and/or the State where most of the employees reside. The commenter was concerned that, without more conditions, the principal-place-of-business provision could be used by sponsors of AHPs to pick as a situs one State with perceived regulatory advantages. The commenter suggested that the final rule also require that the situs State be where the principal place of business of most of the employer members of the AHP are or are anticipated to be. Another suggested that if an AHP is formed for members in a certain region, the AHP should be required to cover a minimum number of members to assure that the group or association is not formed to provide a special benefit for a limited number of individuals. Another suggestion was that the final rule require the situs of the AHP to be a physical location and not merely a post office box.
Other commenters said that if the geography provision was included in the final rule, the group or association and AHP should be required to cover the whole State or metropolitan area or, if sub-areas were permitted, the sub-areas should be required to be contiguous in order for the group or association to qualify as bona fide. The commenters said that, without such requirements, an AHP could “redline” to achieve favorable risk pools by defining a region or a metropolitan area
This final rule retains the geography standard as a basis for meeting the commonality test as proposed without substantive revision. The Department acknowledges stakeholders' interest in clear guidelines so that employer groups interested in establishing and maintaining AHPs pursuant to the final rule can have an acceptable level of certainty regarding the group or association's status as an employer under ERISA section 3(5) and the plan's status as an employee welfare benefit plan under ERISA section 3(1). The Department did not intend the commonality of interest provisions to be overly restrictive or to be applied in an overly rigid way. In the Department's view, an area that matches a Metropolitan Statistical Area or a Combined Statistical Area, as defined by OMB (and as used by U.S. government agencies for statistical purposes), would constitute a metropolitan area for purposes of the rule.
Further, as noted in the Proposed Rule, the Department did not intend, and nothing in the final rule requires, that a group or association or their AHP cover the entire State or an entire metropolitan area in order for the group or association to qualify as bona fide. Rather, as explained elsewhere in this preamble, in the Department's view, the final rule provides substantial flexibility for groups and associations to cover segments of a geographic area that otherwise meets the commonality of interest definition, provided such segmentation is not gerrymandered or manipulated in such a way as to be a subterfuge for discriminating based on a health factor.
The Department does not agree that it would be appropriate to expand the single-State provision to include, as one commenter suggested, three contiguous States. The Department believes that the final rule's provisions allowing nationwide AHPs based on a common trade, industry, line of business or profession and multi-state AHPs based on a common metropolitan area provide sufficient flexibility to groups or associations interested in sponsoring multi-State AHPs. At the same time, the final rule appropriately balances the need for flexibility with the concerns expressed by State regulators and other stakeholders about potential confusion related to compliance with insurance laws and regulations when AHPs, especially self-insured AHPs, operate in multiple States.
With respect to the comments suggesting that more clarity is needed in defining the “principal place of business” provision, the Department does not agree that further clarification is necessary or would be helpful. First, several commenters raising this issue seemed to believe that the principal place of business provision applied to the group or association and their AHP. However, the requirement in the Proposed Rule, which is adopted in the final rule, applies to the principal place of business of the
The Department believes that the inclusion of the subterfuge provision in the final rule, as well as other provisions of federal and State law, sufficiently address the concern about groups or associations and their AHPs being structured to define eligibility for membership in a way that will avoid high cost areas and/or high risk professions.
The Proposed Rule also requested comments on whether the final rule, if adopted, should also recognize other bases for finding a commonality of interest. In response, stakeholders suggested other bases for finding commonality such as ownership characteristics (
The Department does not agree that these characteristics should be included as additional commonality of interest criteria in the final rule. To the extent these classes of unrelated businesses are not part of a single trade, industry, line of business, or profession, the geography standard for establishing a commonality of interest at paragraph (c)(1)(ii) already provides them with the ability to form State-wide and metropolitan area groups and associations that qualify as an employer for purposes of sponsoring an AHP. Thus, for example, groups or associations of employers with no commonality of interest other than shared moral convictions may sponsor AHPs, provided they satisfy the geography standard and other requirements of the final rule. Similarly, the “same business” standard in paragraph (c)(1)(i) also is available to all of these scenarios to the extent the employers are in the same trade, industry, line of business, or profession. For example, a national affinity group or association of military veteran business owners or franchise operators may, through its constitution and bylaws, establish subgroups of its members along relevant industry or business lines, such as entertainment, construction, security, agriculture, gaming, information technology and so forth. Each subgroup, in turn, could serve as the “employer” for purposes of section 3(5) of ERISA and could establish an AHP without geographic limitations covering the employer members within the subgroup. In these circumstances, the provisions of the rule would apply at the subgroup level, including the control requirement in section (b), and the subgroups could rely on their membership in the national affinity group or association to satisfy the requirement that the subgroup have a substantial business purpose other than providing benefits. However, a test that would treat all nationwide franchises, all nationwide small businesses, or all nationwide minority-owned businesses, as having a common employment-based nexus—no matter the differences in their products, services, regions, or lines of work—would not be sufficient to establish commonality of interest for a national group or association and AHP because it would be impossible to define or limit (
The Proposed Rule included certain nondiscrimination requirements that built on the existing health nondiscrimination provisions applicable to group health plans under the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
As stated in the HIPAA health nondiscrimination rules, whether an employment-based classification is bona fide is determined based on all the relevant facts and circumstances, including whether the employer uses the classification for purposes independent of qualification for health coverage (
In addition, under the HIPAA health nondiscrimination rules, a plan may, generally, subject to certain anti-abuse provisions for discrimination directed at
The HIPAA nondiscrimination rules apply to group health plans, including AHPs. Therefore, AHPs, like any other group health plan, cannot discriminate in eligibility, benefits, or premiums against an individual within a group of similarly situated individuals based on a health factor. AHPs, like other group health plans, generally may make distinctions between groups of individuals based on bona fide employment-based classifications consistent with the employer's usual business practice, provided such distinction is not directed at individual participants or beneficiaries based on a health factor. Accordingly, as illustrated in examples in the final rule, an agricultural AHP may offer a different coverage package to dairy farmers than to corn growers, and a metropolitan AHP may offer different pricing to retailers than to restauranteurs, provided such distinctions are not directed at individual participants or beneficiaries based on a health factor.
The Proposed Rule proposed that, in applying the HIPAA health nondiscrimination rules for defining similarly-situated individuals, the group or association may not treat member employers as distinct groups of similarly-situated individuals if it wishes to qualify as a bona fide group or association for purposes of sponsoring an AHP. As noted above, the HIPAA health nondiscrimination rules apply within groups of similarly-situated individuals. If a bona fide group or association could treat different employer-members as different bona fide employment classifications, the preamble to the Proposed Rule said that the nondiscrimination protections in paragraphs (d)(1) through (d)(3) could be ineffective, as AHPs could offer membership to all employers meeting the group or association's membership criteria, but then charge specific employer members higher premiums, based on the health status of those employers' employees and dependents. Accordingly, the preamble to the Proposed Rule stated that a group or association that seeks treatment as an “employer” under ERISA section 3(5) for purposes of sponsoring a single group health plan under ERISA section 3(1) cannot simultaneously undermine that status by treating different employers as different groups based on a health factor of an individual or individuals within an employer member. The Department sought comment on whether this structure, which could potentially represent an expansion of current regulations, would create involuntary cross-subsidization across firms that would discourage formation and use of AHPs.
Many commenters strongly supported the proposed nondiscrimination provisions and urged that such provisions be retained in any final rule. Some commenters believed that the nondiscrimination provisions would provide important protection for AHP participants and beneficiaries and that they would reduce, if not eliminate, opportunities for AHPs to engage in risk selection. One commenter felt that prohibiting discrimination based on health factors alone is appropriate for AHPs because AHPs differ from single-employer plans which typically have steady enrollment based on the employer's workforce and do not see variability in the underlying demographics of the eligible versus enrolled population. The commenter speculated that allowing AHPs to make distinctions based on non-health factors would ensure that premiums and contributions will be sufficient to pay incurred claims and attract a mix of risk.
Numerous commenters also expressed support for the proposed restriction on AHPs treating different employers as distinct groups based on a health factor of an individual or individuals within an employer member. These commenters argued that this provision is essential for preventing AHPs from discriminating against at-risk populations and individuals with preexisting conditions. In their view, without this requirement, AHPs would also have an excessively unfair advantage over commercial insurance issuers offering coverage in the community rated small group and individual markets, which would lead to adverse selection and increased premiums for non-AHP employer sponsored coverage. Many commenters urged DOL to go even further in a final rule because non-health factors such as age, gender, industry, occupation, and geography are closely related to health status and, in their view, rating on these criteria would actually be a pretext for discrimination based on health factors. These commenters stated that AHPs should be limited to the rating factors currently allowed in the small group market.
Other commenters argued that additional requirements are necessary and pointed to the fact that age, gender, occupation, and other characteristics are likely to affect an individual's claims experience but do not meet the definition of a health factor. Thus, the commenters stated, groups and associations that wish to be treated as a bona fide group or association and offer a group health plan may still be able to set criteria for membership and set rates in ways that favor healthier populations, because, for example, younger age correlates with lower healthcare expenditures. Commenters also asserted that the Proposed Rule could create an uneven playing field where AHPs were exempt from rating rules and nondiscrimination requirements applicable to health insurance issuers (especially those in the individual and small group markets) and could therefore exercise competitive advantages by charging more actuarially fair premiums. Such practices could encourage healthy groups to obtain AHP coverage while discouraging less healthy groups from doing so. As a result, premiums would likely rise for individuals and small employers with non-AHP coverage. Many of these commenters further suggested that these effects could be avoided if AHPs were made subject to some or all of the rating rules that apply to issuers in the individual and small group markets.
Other commenters argued that the proposed nondiscrimination provisions were too restrictive. With respect to paragraph (d)(4) of the Proposed Rule, which provides that different employer members of a group or association offering an AHP may not be treated as distinct groups of similarly-situated individuals if the group or association wishes to qualify as bona fide, many commenters claimed that this provision presented a new regulatory restraint for existing AHPs and would discourage the formation and use of new AHPs. They argued that the provision would effectively prohibit AHPs from setting rates for each employer member based on prior or expected claims experience (“experience-rate”). Such rate-setting, they argued, is critical to AHPs' ability to offer affordable coverage because a key component of balancing risk and creating a stable and sustainable plan is directly related to the ability to assign appropriate premiums through medical underwriting of each employer-member. The commenters asserted that if AHPs cannot separately experience-rate each
One commenter stated that omitting a risk adjustment mechanism to address differences in enrollees' aggregate health conditions would make AHPs unstable and would lead to their failure. Another commenter argued that this would disincentivize large employers, whose plans can be experience-rated, from participating in an AHP unless their risk pool was significantly sicker than that of the AHP. Some commenters also stated that experience rating was necessary due to the fact that AHPs have a smaller risk pool as compared to a commercial insurer and without the ability to manage risk by experience rating, they will be unable to compete with commercial issuers. Another commenter claimed that without the ability to experience-rate each member employer, AHPs would be left to compete with other coverage options on the basis of benefits, such as by offering less generous benefit packages to achieve lower prices. A few commenters were also concerned that the Proposed Rule could interfere with AHPs' ability to establish wellness programs by preventing AHPs from rewarding those groups that do participate, or by reducing the incentive to offer wellness programs.
Commenters also claimed that a prohibition against experience-rating was not necessary to distinguish AHPs from commercial insurance arrangements because the Proposed Rule retained the requirements of commonality and control. Also, several commenters pointed out that some States, including Washington and Kentucky, appear to allow such practices pursuant to laws and regulations applicable to MEWAs. Many commenters suggested that the Department should include a type of grandfather rule to accommodate AHPs that already use experience-rating for each employer-member, to prevent market disruption and burdens associated with coming into compliance with new rules that are inconsistent with long-standing business practices.
After considering the comments and feedback received from stakeholders, the Department is finalizing the proposed nondiscrimination provisions in paragraph (d) with one clarification and adding four new examples to illustrate the nondiscrimination provisions.
Additionally, AHPs' ability to discriminate based on non-health factors is subject to State regulation. As discussed in more detail in section B.7., below (entitled “ERISA Preemption and State Regulation of AHPs”), under ERISA section 514, States maintain significant authority to impose additional rating rules on insured AHPs through regulation of the underlying insurance policies obtained by AHPs to fund the benefits they provide, and may also impose similar requirements for self-insured AHPs.
The Department understands the concerns raised by commenters regarding the importance of allowing AHPs to experience-rate each employer member but has decided to keep paragraph (d)(4), with one clarification and several new examples to illustrate the circumstances under which an AHP could charge different premiums to different member employers under paragraph (d)(4). As explained in the preamble to the Proposed Rule, paragraph (d)(4) was intended to distinguish bona fide AHPs from commercial arrangements that more closely resemble State-regulated private insurance offered to the market at large, a distinction the Department viewed as especially important with the broadening of the employment nexus requirement.
Accordingly, as noted above, the touchstone of the Department's analysis has long been whether the group or association has a sufficiently close economic or representational nexus to the employers and employees that participate in the plan. Only groups or associations that have such a nexus can be appropriately treated as sponsors of ERISA-covered plans, as opposed to commercial insurance providers. Moreover, when plans are sponsored by employers, or by groups or associations that have the requisite connection or commonality, there is less cause for concern about fraud, because an employer or group or association with the requisite commonality pursues objectives—
An important purpose of the commonality of interest test is to ensure that the members of the group or association are bound by a common interest as employers, as reflected in the uniform treatment of members based on their common nexus. Generally, one of the primary benefits of participation in a group health plan is that required premiums and contributions, as well as benefits, are determined for
At the same time, the final rule clarifies that AHPs are not precluded from making distinctions between employer members in all circumstances. Several commenters asked the Department to confirm that paragraph (d)(4) of the Proposed Rule would not have prevented an AHP from charging employer members different premiums or contributions based on non-health factors, such as age, case size, industry, and gender. According to these commenters, many AHPs may fail without the ability to make these distinctions. Distinctions based on a factor other than a health factor (such as industry, occupation, or geography) are permitted, provided they are not directed at individual participants or beneficiaries based on a health factor of one or more of those individuals. This clarification is consistent with the HIPAA health nondiscrimination rules. AHPs could draw distinctions based on non-health attributes of a particular member employer (
New examples seven through nine in the final rule illustrate some circumstances under which an AHP could charge different premiums to different member employers while complying with paragraph (d)(4) of the final rules. These examples draw on the bona fide business classification principles set forth in the HIPAA health nondiscrimination rules.
New example 10 was also added to make clear that the wellness program provisions of the HIPAA health nondiscrimination rules at 29 CFR 2590.702(f) apply. The wellness program provisions permit plans to vary benefits (including cost-sharing mechanisms, such as a deductible, copayment, or coinsurance), and the amount of premium or contribution they require similarly situated individuals to pay, based on whether an individual has met the standards of a wellness program that satisfies the HIPAA health nondiscrimination rules. The HIPAA health nondiscrimination rules generally permit rewards of up to the 30 percent of the total cost of coverage under the plan, except that the percentage is increased by an additional 20 percentage points (to 50 percent) to the extent that the additional percentage is in connection with a program designed to prevent or reduce tobacco use. Moreover, the total cost of coverage for such purpose is generally determined based on the total cost of employee-only coverage under the plan. However, if, in addition to employees, any class of dependents (such as spouses, or spouses and dependent children) may participate in the wellness program, the plan may use the total cost of the coverage in which an employee and any dependents are enrolled. In either case, the cost of coverage is determined based on the total amount of employer and employee contributions towards the cost of coverage for the benefit package under which the employee is (or the employee and any dependents are) receiving coverage.
A number of commenters, including many associations and working owners (such as farm owners, realtors and court reporters) strongly supported the “working owner” provision of the Proposed Rule. These small business owners noted that while most Americans get their health coverage through an employer, self-employed professionals without common law employees are forced to purchase insurance in the more volatile individual insurance market, which tends to offer fewer choices at much higher costs. These commenters said that the working owner provision will offer sole proprietors and other self-employed individuals without employees more flexibility in insurance plan design, improved negotiating power, and lower cost health coverage. The Department agrees that allowing working owners such as sole proprietors to participate in AHPs covered by ERISA will give additional coverage options to certain individuals who may not currently have access to affordable health coverage. In the time since the Department first issued sub-regulatory guidance on bona fide groups or associations, increasing numbers of workers fall into these categories.
Other commenters opposed the working owner provision and argued that allowing working owners without employees to participate in AHPs, and even permitting an AHP to consist entirely of such individuals, would harm the small group and individual markets. These commenters expressed concern that such AHPs would be able to design and market plans with the result that a disproportionate number of healthy individuals might shift out of ACA-compliant individual markets and small group markets, resulting in increased rates and decreased choice in those markets. These commenters also argued that allowing working owners without employees to be considered “employers” under ERISA section 3(5) would upset existing DOL guidance and court decisions. Specifically, these commenters asserted that the Department has consistently taken the position in sub-regulatory guidance that where membership in a group or association is open to anyone engaged in a particular trade or profession regardless of employer status (such as working owners and self-employed individuals without common law employees), and where control of the group or association is not vested solely in employer members, the group or association is not a group or association of employers within the meaning of ERISA section 3(5).
Some commenters also noted that the Proposed Rule would have permitted an AHP to consist entirely of working owners. They complained that it was an impermissible reading of ERISA for the Department to conclude that a plan with no common law employees was an employment-based plan that Congress intended to be regulated under ERISA. They cited the U.S. Supreme Court decision in
Additionally, some commenters argued that the inclusion of “working owners” in the definition of “employer” is in conflict with the ACA. Specifically, they argued that Congress, in adopting the ACA, was aware of the existing case law and the Department's sub-regulatory guidance, and intended to retain that legal structure, as reflected in the ACA's inclusion of various protections for individual market participants. In particular, they point to ACA definitions of the individual, small group, and large group markets (42 U.S.C. 18024) that continue to provide that owners of businesses who have no employees cannot qualify for group coverage (although the ACA permitted small group coverage for groups that included only one employee other than the owner). They claim that adopting the working owner provision as part of the final rule would violate the ACA.
The Department disagrees. As described in the preamble to the Proposed Rule, the working owner provision is consistent with the Department's longtime recognition that working owners should be able to participate in ERISA-covered plans.
The working owner provision in the rule also is consistent with longstanding conclusions the Department has reached that address the operational impracticalities of having a plan alternate between being ERISA and non-ERISA coverage as a result, for example, of a sole proprietor sometimes having common law employees and sometimes not based on business cycles, or a person who was a common law employee participating in the plan becoming an independent contractor of the member employer.
The Department also does not believe that the U.S. Supreme Court decision in
Also, unlike the issue in
Moreover, the Department's treatment of working owners as such does not violate the ACA. The PHS Act definitions (which were added to the PHS Act by HIPAA and later amended by the ACA and the Protecting Affordable Coverage for Employees Act
Accordingly, although a working owner without common law employees generally would not meet the PHS Act definition of a small employer (and, thus, would generally have to purchase insurance in the individual market, to the extent he desired coverage), such a working owner participating in a group or association that meets the ERISA section 3(5) definition of an employer would be counted as an employee of the single group or association employer, which allows him to obtain group health coverage through the AHP. The final rule makes explicit that working owners without common law employees may qualify as both an employer and as an employee for purposes of participating in an AHP. HHS has reviewed this final rule and has advised the Department that nothing in the PHS Act precludes the Department from amending its interpretation of the definition of an employer under ERISA section 3(5), and that it concurs with this interpretation of PHS Act section 2791(d)(6) in light of this final rule.
As in the Proposed Rule, the working owner criteria in the final rule are designed to ensure that a legitimate trade or business exists, because ERISA governs benefits provided in the context of a work relationship, as opposed to the mere marketing of insurance to individuals unrelated to their status as employees in a trade or business and any benefits they obtain through that status. Thus, a group or association would fall outside the purview of the final rule if it offered coverage to persons who are not genuinely engaged in a trade or business (
The Department also solicited comments on whether the criteria in the proposed standard were workable, whether any additional clarifications would be helpful to address issues relating to how working owners could reasonably predict whether they will meet the earned income and hours worked requirements, and whether AHPs should be required to obtain any evidence in support of such a prediction beyond a representation from the working owner.
The Proposed Rule's definition of “working owner” required that the individual either work at least 30 hours per week or 120 hours per month providing services to the trade or business, or have earned income from such trade or business that at least equals the working owner's cost of coverage for participation by the working owner and any covered beneficiary in the group health plan. The Proposed Rule also expressly would have allowed the group or association sponsoring the group health plan to rely on written representations from the individual seeking to participate as a working owner as a basis for concluding that these conditions are satisfied.
The Department received comments stating that the final rule should (1) retain requirements for minimum hours worked or income; (2) include a verification or audit process to confirm that participating working owners meet eligibility requirements and confirm that issuers may separately verify that working owners meet eligibility requirements as a condition of providing insurance coverage; and (3) clarify that issuers will be held harmless in the event of fraudulent enrollments of working owners.
With respect to the verification process, some commenters said that the Proposed Rule would allow working owner enrollment in an AHP based on the mere attestation that the individual is actually a “working owner,” without a requirement that the AHP take steps to confirm this basic element of eligibility. Some commenters argued that such an attestation approach invites abuse and does not ensure an adequate employment nexus as required by ERISA. Those commenters suggested that, if the Department decided to retain the working-owners provision in the final rule, the Department should strengthen the verification requirements to ensure that these individuals are genuinely engaged in a trade or business and are performing services for the trade or business in a manner that is in the nature of an employment relationship. Other commenters suggested that the Department should include a requirement in the final rule that the working owners have been in business for a certain number of years before joining the AHP.
The Department notes as a preliminary matter, that the attestation provision was included in the Proposed Rule to reduce compliance burdens and potential liability exposure in the case of errors or failures. Plan fiduciaries have an obligation under ERISA to take steps to ensure that only eligible individuals participate and receive benefits under the plan. In carrying out that responsibility, ERISA section 404(a)(1)(B) requires fiduciaries to make eligibility determinations “with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use . . . .” The Department agrees with commenters that a written representation from an individual that he or she meets the working owner conditions, without more, may be insufficient in some cases and even could lead to abuses. The Department revised the final rule to eliminate that provision. In its place, the final rule
Commenters stated that the Proposed Rule's “hours worked” provision should be modified to take into account that many industries include workers that do not have a defined work schedule that results in a steady and predictable 30-hour work week or 120-hour month. One commenter noted that in its industry, over 15% of working owners work fewer than 30 hours per week and make less than $10,000. The commenter also suggested that the provision should also provide for workers who are reducing their hours, as they make a transition out of their former job. Another commenter suggested that the final rule include a “variable” worker provision allowing flexibility in making an hours-worked determination to address situations in which a working owner's time performing services for his business can often vary due to various industry, seasonal, and other business and market factors, and said it would be particularly useful to owners of start-up businesses and other newly formed entities. The Department agrees that the “hours-worked” criterion could be made more flexible without impairing the objective of limiting the provision to self-employed individuals who are genuinely engaged in a trade or business. Accordingly the final rule reduces the hours-worked provision to an average of 20 hours per week or 80 hours per month. A working owner could demonstrate this by evidence of a work history or a reasonable projection of expected self-employment hours worked in a trade or business. For this purpose, consistent with the principles of the gig economy, hours worked in a trade or business can be aggregated across individual jobs or contracts. Therefore, for example, an on-demand driver could aggregate hours driven using different ride assignment technology platforms. (Similarly, wages earned could be aggregated so that, for example, a pianist could aggregate money earned teaching piano lessons and money earned while giving performances.)
The Proposed Rule stated that the earned income standard and other group health eligibility provisions are informed by Federal tax standards, including section 162(l) of the Code, that describe conditions for self-employed individuals to deduct the cost of health insurance. (In the final rule, the term “self-employment income” replaces the term “earned income” that was used by the Proposed Rule.)
Concerns about the potential liability of issuers with respect to ineligible individuals wrongly treated as working owners would invariably depend on the particular facts and circumstances involved, including contractual provisions establishing the parties' respective rights and obligations. Accordingly, the final rule does not include any provision on that subject.
Section 2510.3-5(e)(2)(iii) of the Proposed Rule would have provided that an individual would not be treated as a “working owner” if the individual was eligible to participate in any subsidized group health plan maintained by any other employer of the individual or the individual's spouse. Many commenters opposed this provision. Some argued that coverage available through a separate employer or through a spouse's employer may not be the most affordable option for a family, the AHP coverage may in fact provide more comprehensive coverage than that made available by a separate employer, and that the provision in the Proposed Rule would result in a “marriage penalty” that is not applied to other employers or their employees. These commenters also noted that this requirement would be very hard to enforce and would require the fiduciary of the AHP to establish a verification process that would add unnecessary complexity and burden to the working-owner provision. For example, commenters said that they did not believe the Department intended that eligibility for “excepted benefits” would be disqualifying. Excepted benefits generally provide only limited health coverage (
After consideration of the public comments, the Department agrees that the condition is not a good indicator of whether a working owner is involved in a legitimate trade or business, as opposed to engaged in de minimis “commercial activities” that cannot fairly be classified as meaningful self-employment. Accordingly, the subsidized health coverage provision in the Proposed Rule is not adopted as part of the final rule.
Many commenters opposed the Proposed Rule on the grounds that because AHPs will generally be insured in the large group market or be self-insured, AHPs would not be subject to the requirement to provide EHBs, which only applies to non-grandfathered individual market and small group market insurance coverage. Commenters raised the possibility that AHPs would seek to deliver low premiums by providing benefits that are not as comprehensive as other coverage options available to working owners and small employers. They asserted that the Proposed Rule could lead to adverse selection in the individual and small group markets because healthier groups and working owners could be attracted to AHPs providing minimal benefits because of the lower costs, while less healthy groups and working owners would seek out more robust coverage in the individual and small group markets. This could lead to less stable risk pools in the individual and small group markets, rising premiums, and cascading effects that could leave certain markets without any active health insurance issuers. Further, they stated that AHPs offering comprehensive benefits may also be disadvantaged, as healthy members could leave to join lower-cost AHPs (and return when their medical needs increase). Commenters noted that certain populations with specific needs, such as those with disabilities, could be disproportionately affected if their coverage does not include a robust level of benefits. Some of these commenters suggested that in order to mitigate these effects, the Department should require AHPs to provide EHBs or some other minimum level of benefits, or require them to provide “minimum value” within the meaning of Code section 36B(c)(2)(C)(ii) and 26 CFR 1.36B-6.
Other commenters acknowledged concerns that AHPs may provide inadequate benefits but did not believe that legitimate membership organizations would risk their goodwill and reputation by offering such health plans. Instead, they argued that economies of scale would enable AHPs to offer more comprehensive coverage to their members than they would be able to purchase on their own. Another commenter noted that even though self-insured plans and large group market policies are not required to provide EHBs, most do, in fact, provide comprehensive coverage.
The Department declines to adopt commenters' recommendations to make the provision of EHBs in an AHP a condition for a group or association to qualify as bona fide. Such a mandate would run contrary to the goal of leveling the playing field between small employers in AHPs, on the one hand, and large employers, on the other, who generally are not subject to the EHB requirements. Furthermore, such a mandate could reduce AHPs' flexibility to tailor coverage to the particular needs of the members of the group or association offering the benefits, and thereby reduce access to AHPs by making them less attractive options for providing affordable coverage. For this reason, the Department also declines to require the provision of minimum value coverage as a condition for a group or association to qualify as bona fide. The ability to design AHP benefit packages and set cost-sharing requirements without the burden of certain Federal restrictions is critical to enabling AHPs to provide an additional, more affordable coverage option to small businesses and working owners who may otherwise have been unable or unwilling to obtain higher-priced coverage. Moreover, the Department believes that concerns regarding adverse selection as result of AHPs not providing comprehensive coverage are overstated because we agree with those commenters who asserted that AHPs are not likely to offer relatively low levels and scope of benefits, which could jeopardize their relationship with their members and because other federal and State coverage requirements may apply.
The Department notes that for those AHPs that choose to offer coverage to employers that are applicable large employers subject to the employer shared responsibility provisions of Code section 4980H, the participating applicable large employers face the possibility of having to make an employer shared responsibility payment if the AHP does not provide minimum value coverage.
(1) Evidence-based items or services that have in effect a rating of A or B in the current recommendations of the United States Preventive Services Task Force (Task Force) with respect to the individual involved;
(2) Immunizations for routine use in children, adolescents, and adults that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention (Advisory Committee) with respect to the individual involved. A recommendation of the Advisory Committee is considered to be “in effect” after it has been adopted by the Director of the Centers for Disease Control and Prevention. A recommendation is considered to be for routine use if it appears on the Immunization Schedules of the Centers for Disease Control and Prevention;
(3) With respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA); and
(4) With respect to women, evidence-informed preventive care and screening provided for in comprehensive guidelines supported by HRSA (not otherwise addressed by the recommendations of the Task Force).
In addition, Title VII of the Civil Rights Act (as amended by the Pregnancy Discrimination Act and administered by the Equal Employment Opportunity Commission (EEOC)) generally provides that pregnancy-related expenses for employees and their spouses must be reimbursed in the same manner as those incurred for other medical conditions.
Many AHPs, or the insurance coverage that insures them, will also be subject to State benefit mandates. The State of Pennsylvania, for example, requires policies issued in the large group market to cover in-patient and out-patient services for severe mental illness, inpatient and outpatient services for substance use disorders, autism services, childhood immunizations, and mammography.
Some commenters also expressed concern that the maximum out of pocket limit (MOOP) under PHS Act section 2707(b) (incorporated into ERISA section 715) and the prohibition of lifetime and annual dollar limits under PHS Act section 2711 (also incorporated into ERISA section 715) only apply with respect to EHBs. These commenters were generally concerned that in the absence of these protections, AHPs would impose burdensome cost-sharing requirements or annual and lifetime limits for critical benefits, such as mental health care, substance-use disorder services, prescription drugs, and maternity services, in an effort to drive down costs, as had happened in the pre-ACA insurance market.
While group health plans that are offered in the large group market or are self-insured are exempt from the requirement to offer EHBs, all non-grandfathered group health plans are subject to the MOOP and the prohibition on annual and lifetime dollar limits on EHBs. Accordingly, to the extent a plan covers EHBs, the MOOP and annual and lifetime dollar limits provisions apply.
An AHP sponsored by a bona fide group or association under this final rule is a group health plan and an employee welfare benefit plan under ERISA. Accordingly, the AHP is subject to all ERISA provisions applicable to group health plans and employee welfare benefit plans, including Title I of ERISA.
Some commenters expressed concerns about the Proposed Rule on the broad assumption that AHPs would be exempt from various consumer protections included in ERISA and other Federal laws, including changes made by the ACA, and that the rule would lead to a diminution in rights and protections for AHP participants. As the Department explained in the Proposed Rule, the primary purpose of allowing more flexibility for groups or associations to sponsor AHPs is to expand access to affordable health coverage, especially among small employers and working owners—many of whom currently do not provide health benefits to their workers—by removing undue restrictions on the establishment and maintenance of AHPs. However, as noted above, an AHP offered by a bona fide group or association under this final rule remains a group health plan under ERISA and participants in AHPs are entitled to the same protections under ERISA that are available to participants in single employer group health plans.
Some commenters requested that the Department provide clarification with respect to the application of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and the COBRA continuation coverage requirements. Specifically, because these requirements include an exemption for employers with a certain number of employees, commenters inquired whether it was the total number of employees of the separate participating member-employers or the number of employees of employers, collectively, participating in the bona fide group or association that matters for purposes of determining whether the requirements apply to an AHP.
Generally, MHPAEA requires that financial requirements and treatment limitations for mental health and substance use disorder benefits must be no more restrictive than those placed on medical and surgical benefits. MHPAEA provides an exemption for group health plans for “any plan year of a small employer.”
MHPAEA amended ERISA, the Code, and the PHS Act and is subject to joint interpretive jurisdiction by the Departments of Labor, the Treasury, and HHS (collectively, the Departments).
COBRA provides for a temporary continuation of group health coverage that would otherwise be lost due to certain life events, but does not apply to a group health plan for any calendar year if “all employers maintaining such plan normally employed fewer than 20 employees” on a typical business day during the preceding calendar year.”
Numerous commenters requested that the Department provide clarifications with respect to the application of a wide variety of Federal laws and regulations that are not grounded in ERISA but may implicate or apply to AHPs. Examples include the employer shared responsibility provisions, premium tax credit eligibility rules, network adequacy standards, the Pregnancy Discrimination Act of 1978, other federal nondiscrimination laws, and Medicare secondary payer rules.
The Department considers these comments to be beyond the scope of this rulemaking. In setting out additional criteria for determining whether an employer group or association can act as an employer within the meaning of ERISA section 3(5) for purposes of sponsoring a single group health plan for its employer-members, the intent of this final rule is to expand the number of organizations that are eligible to sponsor an AHP. However, many AHPs currently exist and therefore the interaction between AHPs and the various laws and regulations discussed by these commenters are not a consequence of this rule. Further, these laws and regulations are not within the Department's interpretive jurisdiction and therefore any guidance provided would be outside the scope of its regulatory authority.
A VEBA is a type of tax-exempt organization that could be used by employee welfare benefit plans, including multiple employer welfare benefit plans, to hold plan assets.
The Department acknowledges that applicable IRS guidance regarding the use of VEBAs sets out different criteria for employer groups and associations that seek to establish and use those arrangements than this final rule sets out for sponsorship of a group health plan under ERISA. Although VEBAs are often a convenient way for multiple employers to fund certain employee welfare benefits in a tax-advantaged environment, VEBAs are not the sole vehicle for funding of multiple employer plans. To the extent that an employer group or association that offers an AHP chooses to use a VEBA in connection with the AHP, the arrangement must comply with applicable VEBA requirements. For more information on the use of VEBAs and the process for obtaining an IRS determination on VEBA status under Code section 501(c)(9),
Commenters requested that the Department should include language to ensure that employers, including franchisors whose franchisees participate in an AHP, are not considered joint employers under ERISA or the Fair Labor Standards Act (FLSA). Similarly, commenters requested clarification that a person or entity who contracts with individuals as independent contractors does not, by participating in an AHP with independent contractors, facilitating formation or operation of an AHP by independent contractors, or promoting an AHP for those independent contractors, become the employer of the independent contractors. The commenters argued that the question of who is an “employer” or “joint employer” carries significant legal consequences because of the increasing prevalence of independent contractor and other third-party relationships in today's workplace, such as those between a business and a contractor's employees, or between a corporate parent and its franchisees' workers. The commenters said that the legal test for employment or joint employment under the FLSA has become less clear, with many tests for employer or joint employer liability looking to a variety of factors. There may also be increased risk of joint liability under ERISA section 510 for a franchisor. Commenters claimed that the potential increased risk for expanded employer or joint-employer liability could limit the expansion of AHPs. Some commenters requested, on similar grounds, that we clarify that franchisors assisting in the start-up and ongoing administration of an AHP involving their franchisees and entities providing similar assistance in connection with AHPs for independent contractors would not be grounds for finding joint employer status.
The employer group or association provision in ERISA section 3(5) merely authorizes separate employers to maintain a single plan to provide benefits to their separate employees. It does not impose any independent employer obligation upon businesses with respect to the employees of other employers that obtain benefits under the plan. Participation in an AHP does not involve any agreement between employers to share employee services, or any sharing of direct or indirect control of an employee or independent contractor or his or her employment. By participating in an AHP, the individual participating employers also are not acting directly or indirectly in the interest of the other individual employers in relation to an employee, or in the interest of any independent contractor who may participate in the AHP as a working owner. Although the group itself may be acting in the interest of the participating employers in sponsoring the AHP, that is not analogous to one individual employer acting in the interest of another individual employer with respect to an employee or in the interest of an independent contractor. The individual employers are not, by reason of participating in the AHP, involved in hiring, firing, disciplining, setting rates or methods of pay, maintaining records, controlling, or directing and supervising the work of the other participating employers' employees or of independent contractors. Therefore, nothing in the final rule is intended to indicate that participating in an AHP sponsored by a bona fide group or association of employers gives rise to joint employer status under any federal or State law, rule, or regulation. The final rule also should not be read to indicate that a business that contracts with individuals as independent contractors becomes the employer of the independent contractors merely by participating in an AHP with those independent contractors, who would participate as working owners, if applicable, or promoting participation in an AHP to those independent contractors, as working owners.
The Department received many comments, including from State insurance regulators, expressing the view that it is very important that the final rule not undermine or impair the current ERISA preemption provisions that broadly permit States to regulate AHPs under State insurance laws and regulation. The commenters expressed concern about a history of abuses involving unlicensed entities that compete with State-licensed health insurance issuers, but are exempt from many of the solvency standards and consumer protections that apply to traditional issuers in the State-regulated individual and small-group markets. These commenters argued that AHPs operating in multiple States should be required to abide by the regulations of each of the States in which the plan is providing health care coverage, and not just the State in which the group or association or their AHP is deemed to be domiciled.
Commenters expressed concerns about potential abuses that could arise if AHPs were exempt from consumer protections that apply to entities marketing and selling insurance in their States. The commenters cited cases of healthcare arrangements purporting to be AHPs that left State residents with unpaid claims for their healthcare when the purported AHP failed, or the operators of the arrangement left the State. Some commenters stated that the States have a relatively strong oversight record and existing mechanisms to protect against fraud. These commenters noted that State officials and the insurance agents they regulate serve as “eyes on the ground” to detect and report fraudulent schemes in their local markets. Another commenter suggested that the final rule should distinguish self-insured AHPs, which have historically presented problems in the market, from fully-insured AHPs, which are backed by licensed health insurance issuers and subject to oversight by State insurance commissioners and HHS. A few commenters asked that the Department promulgate a rule under ERISA section 520 which authorizes the Department to make persons operating AHPs subject to otherwise preempted State insurance laws to prevent fraud and abuse, before we finalize the AHP regulation, in order to give the Department an additional oversight and enforcement tool.
The main point of these commenters was that the Department should make it clear that the final rule in no way limits the ability of States under State insurance laws to regulate AHPs, health insurance issuers offering coverage through AHPs, and insurance producers marketing that coverage to employees. In particular, they requested that the Department make a clear and unequivocal statement that States retain full authority to set and enforce solvency standards for all AHPs, and comprehensive licensure requirements and oversight for non-fully-insured AHPs including benefit, rating and consumer protection standards, and laws specifying who is eligible to apply for licensure.
The Department agrees that the final rule does not modify or otherwise limit existing State authority as established under section 514 of ERISA. If an AHP is fully insured, ERISA section 514(b)(6)(A)(i) provides that State laws that regulate the maintenance of specified contribution and reserve levels (and that enforce those standards) may apply, and State insurance laws are generally saved from preemption when applied to health insurance issuers that sell policies to AHPs and when applied to insurance policies that AHPs purchase to provide benefits. In addition, in the case of fully-insured AHPs, it is the view of the Department that ERISA section 514(b)(6) clearly enables States to subject AHPs to licensing, registration, certification, financial reporting, examination, audit and any other requirement of State insurance law necessary to ensure compliance with the State insurance reserves, contributions and funding obligations. Furthermore, under this framework, if an AHP established pursuant to this final rule is not fully insured, then, under section 514(b)(6)(A)(ii) of ERISA, any State law that regulates insurance may apply to the AHP to the extent that such State law is “not inconsistent” with ERISA.
Some commenters oppose continued application of State insurance laws, stating that navigating the varying or contradictory standards of multiple States has made it difficult for AHPs to actually operate across State lines. For example, some expressed concern about State MEWA statutes that prohibit participation across different industries, prohibit self-employed individuals from being covered by MEWAs, and prohibit MEWAs from operating in the State if established solely for the purpose of obtaining or providing insurance. Some commenters noted that several States currently prohibit AHPs from self-insuring. These commenters say that the varying State laws prevent AHPs from providing uniform insurance and healthcare coverage across State lines. Some of these commenters support broader Federal oversight and regulation of self-insured AHPs rather than joint Federal-State regulation.
Several commenters asserted that the Proposed Rule was unclear or in direct conflict with State law, such as group size calculations used to determine the applicability of pooling, loss ratio, community rating, and essential health benefit requirements. These commenters requested that the Department render an opinion, or opinions, as to whether such laws (such as benefit mandates, rating rules, and licensing and registration requirements, among others) would be superseded by or because of the final rule.
The Department declines the invitation of the commenters to opine on specific State laws. The provisions in ERISA section 514 are clear and well established, and both the Department's interpretations and federal court rulings generally have upheld such State laws when they have been challenged as preempted by ERISA. The final rule is not the appropriate vehicle to issue opinions on whether any specific State law or laws would be superseded because of the final rule.
Several commenters recommended that the final rule establish competency standards for persons offering or operating AHPs, and minimum funding requirements for self-insured AHPs. A few commenters encouraged the Department to require a criminal background check of each fiduciary of any self-insured AHP, and a cap on broker compensation for self-insured AHPs. Other commenters suggested that the final rule require self-insured AHPs to meet risk-based capital requirements to ensure the group or association has the capital necessary to support overall business operations, and to engage an insurance underwriter.
As noted above, some commenters called for an increased federal role in regulating AHPs as an alternative to state insurance regulation. One commenter stated that while the states should be responsible for enforcement of standards provided in the final rule, the Department should have the authority to intervene. Other commenters emphasized the need for increased coordination between the states and DOL to evaluate the financial resources of AHPs and protect consumers against fraud and abusive practices. Other commenters noted that DOL should take enforcement action against AHPs that fail to file timely and complete M-1 forms with the Department, and one commenter suggested that all self-insured AHPs should be required to register with the federal government.
Among the commenters arguing for an increased federal role, some urged the Department to use its authority under section 514(b)(6)(B) of ERISA to exempt AHPs from aspects of State insurance law. Most of these commenters focused on the potential benefits of uniform standards, and the need for interstate AHPs to be free of potentially overlapping, cumbersome, different, or contradictory patchworks of regulations that, they asserted, could be so detrimental to the operation of multi-state AHPs as to prevent them. Some commenters suggested that the Department could replace state protections by crafting an exemption with additional federal consumer protections that AHPs must comply with as a condition of the exemption.
ERISA section 514(b)(6)(B) provides that the Department may prescribe regulations under which non-fully-insured MEWAs that are employee benefit plans may be granted exemptions, individually or by class, from certain State insurance regulations. ERISA section 514(b)(6)(B) does not, however, give the Department unlimited exemption authority. Significantly, ERISA section 514(b)(6)(B) does not give the Department any authority to exempt any fully-insured AHP from any state insurance laws that can apply to a fully-insured MEWA plan under ERISA section 514(b)(6)(A). Furthermore, section 514(b)(6)(B) does not allow the Department to exempt self-insured AHPs from state insurance laws that can be applied to fully-insured AHPs,
While no state is required by Federal law to take legislative action in order to regulate AHPs, many states regulate AHPs and other MEWAs under their general insurance statutes while others have chosen to adopt MEWA-specific insurance laws. For example, under some state insurance laws, a self-insured MEWA is subject to the state's general insurance laws and regulations applicable to licensed health insurance issuers unless the state has adopted a specific MEWA licensing law. To guard against fraud and abuse, a number of States provide that self-insured MEWAs must be licensed, registered, have a minimum number of participating employers, obtain an actuarial opinion that the MEWA can meet promised benefits and require that the MEWA keep a minimum level of reserves.
Several commenters asked the Department to provide guidance on fiduciary liabilities and responsibilities of a bona fide group or association that sponsors an AHP and clarify that any individual charged with the operation or management of an AHP is considered a fiduciary under ERISA. They stressed that it is important for groups and associations that sponsor an AHP to understand that they are obligated to protect the interests of the participants of the plan, and may be held individually liable if they fail to do so. Some of the commenters also requested the Department to clarify who will be responsible for ensuring compliance with ERISA and other federal requirements, such as COBRA compliance, ERISA reporting and disclosure requirements, compliance with certain requirements under the Code, compliance with the nondiscrimination requirements under paragraph (d) of this final rule and all of the other responsibilities that come with the maintenance of a single large employer plan.
An AHP offered by a bona fide group or association under the final rule is subject to all of the ERISA provisions applicable to group health plans, including the fiduciary responsibility and prohibited transaction provisions in Title I of ERISA. The Department notes that the bona fide group or association that sponsors the AHP assumes and retains responsibility for operating and administering the AHP, including
Several commenters requested that the Department clarify that all notice requirements applicable to ERISA group health plans apply to AHPs, including the Summary of Benefits and Coverage (SBCs) and Summary Plan Description (SPDs), as well as notices under FLSA section 18B, which is imposed on the employer, rather than the plan. Commenters also requested that the Department require AHPs to disclose to employer groups and potential beneficiaries if they do not provide specific consumer protections or benefits the covered customers would have otherwise received in the traditional insurance market, including a comparison to EHBs, whether dollar limits apply to any benefit, whether the plan provides minimum value, and the right to receive coverage on the health insurance Exchanges. Other commenters requested that the Department coordinate with State regulators regarding the content of any notices to avoid confusion and excessive administrative costs.
As group health plans, AHPs are subject to the disclosure requirements of Title I of ERISA. This includes the requirement to provide an SPD, Summary of Material Modifications (SMMs) and Summaries of Material Reductions in Covered Services or Benefits (SMRs).
The AHP also must describe services that it does not cover or excludes. The SBC must be provided to participants and beneficiaries as part of any written application materials distributed to participants and beneficiaries, or (if no written application materials are distributed) no later than the first date a participant is eligible to enroll in coverage. This ensures that participants and beneficiaries have the opportunity to familiarize themselves with the terms of their coverage before they enroll. The SBC must also be provided by the first day of coverage if there are changes; upon special enrollment; upon renewal, reissuance or reenrollment (either when application materials are provided or no later than 30 days prior) and within seven business days upon request.
In addition, AHPs are MEWAs and, as such, are subject to existing federal regulatory standards governing MEWAs. Sponsors of AHPs will need to exercise care to ensure compliance with those standards, including those established in the ACA.
The ACA also expanded reporting and required registration for MEWAs with the Department. MEWA registration requirements require plan and non-plan MEWAs to file Form M-1s under ERISA section 101(g) and 29 CFR 2520.101-2. All AHPs under the final rule will be MEWAs and, as MEWAs, required to file the Form M-1 regardless of the plan size or type of funding. Further, all employee welfare benefit plans that are MEWAs subject to the Form M-1 requirements, including AHPs under the final rule, will be required to file the Form 5500, regardless of the plan size or type of funding. In addition, the ACA added new criminal penalties under ERISA section 519 for any person who knowingly submits false statements or makes false representations of fact about the MEWA's financial condition, the benefits it provides, or its regulatory status as a MEWA in the marketing of a MEWA. The ACA also amended ERISA section 501(b) to impose criminal penalties on any person who is convicted of violating the prohibition in ERISA section 519.
Thus, as ERISA-covered plans and MEWAs, AHPs will be subject to comprehensive disclosure requirements. In light of these existing requirements, the Department does not believe adding new, and potentially redundant, disclosure requirements on AHPs of the sort suggested by some commentators is necessary or advisable at this time based on the record before the Department. Thus, the final rule does not include any special disclosure requirements on bona fide groups or associations of employers that sponsor AHPs or on AHPs established pursuant to the final rule. As noted elsewhere in this document, the Department intends to work with state insurance regulators on overall implementation of the final rule, including the interaction of any applicable state insurance law disclosure requirements with the disclosure requirements applicable to group health plans, such as AHPs, under Title I of ERISA.
This final rule is intended to facilitate the creation and maintenance of AHPs
Many employer groups or associations have a thorough knowledge of the economic challenges that their members face. Using this knowledge and the regulatory flexibility provided by this final rule, AHPs may tailor health coverage to better meet the needs of their members at lower and more actuarially fair prices
AHPs will pursue economies of scale by encouraging more small businesses and working owners to band together to (1) make health coverage design and purchasing decisions; and (2) provide administrative functions. Like large health insurance issuers, AHPs with large shares in local healthcare markets may exercise bargaining power with local healthcare providers and achieve economies of scale in purchasing healthcare services. AHPs sponsored by geographically-based, multi-industry organizations, which the final rule authorizes, are more likely than AHPs sponsored by industry-based organizations with widely scattered memberships, which the Department's current pre-rule guidance allows (and this new regulation will continue to permit), to garner sufficient numbers of insured in local healthcare markets to achieve such economies of scale.
There are many well-established, geographically-based organizations, such as local chambers of commerce, that lend themselves to sponsoring AHPs, but generally cannot under the Department's pre-rule guidance. Such organizations can, and sometimes do, help their members purchase health insurance policies in the individual and small group markets. However, the ACA and state laws and regulations governing individual and small group markets limit both the propensities of such organizations to undertake group purchasing of health insurance and the economies of scale that such organizations can achieve from group purchasing. This final rule will enable such geographically-based organizations to sponsor AHPs that will provide or purchase health insurance for their small business members through the more lightly regulated large group market. Moreover, the final rule will also encourage newly formed employer organizations to sponsor AHPs, and will enable AHPs to extend membership to working owners.
Fully-insured and self-insured AHPs established under this final rule generally will be subject to federal benefit mandates that apply to the large group insurance and self-insured ERISA-covered markets, respectively.
Relative to health insurance issuers in the individual and small group markets under ACA and state laws applicable to those markets, AHPs established under this final rule can use their regulatory flexibility to design more tailored, less comprehensive health coverage and set more actuarially fair prices that generally are lower for lower risk groups and higher for higher risk ones, provided the prices comply with applicable nondiscrimination standards. This regulatory flexibility in design and pricing will necessarily lead to some favorable risk selection toward AHPs and adverse selection against individual and small group markets.
To the extent that small businesses that use AHPs avoid paying forced cross subsidies to the ACA-compliant individual and small group markets (and thereby reap economic gains), premiums in those ACA-compliant markets will increase. Individual policy holders with household incomes at or below 400 percent of the federal poverty level generally will be protected from these premium increases (
In the past, some AHPs and other MEWAs suffered from mismanagement and abuse, leading to unpaid claims and loss of coverage. Congress, the Department, and states have made progress combatting MEWA abuse and will continue their efforts as AHPs become more prevalent in response to this rule. AHPs with tighter ties to, and that are more controlled by, employer members are likely to be more insulated from mismanagement and abuse. The final rule requires certain minimum such ties and control in order to reduce operational risks. Nonetheless, risks remain.
The final rule in effect broadens the flexibility of states to tailor their laws and regulations to their local market conditions and policy preferences. The ACA has constrained this flexibility with respect to health insurance in the individual and small group markets. AHPs present an opportunity for states to make affordable health coverage options that the ACA has otherwise foreclosed available to small businesses, including working owners. States' long experience regulating individual and small group markets and close-in knowledge of local market conditions position states to optimize AHPs' role.
Overall, and as discussed more fully below, the Department has concluded that this rule delivers social benefits that justify any attendant social costs.
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.
Under Executive Order 12866 (58 FR 51735), “significant” regulatory actions are subject to review by the Office of Management and Budget (OMB). Section 3(f) of the Executive Order 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 one 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. It has been determined that this final rule is economically significant within the meaning of section 3(f)(1) of the Executive Order. Therefore, OMB has reviewed the rule pursuant to the Executive Order.
The background to the rule is discussed earlier in the preamble. This discussion assesses the rule's expected impacts.
Presently, U.S. households obtain health benefits from a number of different private and public sources. Essentially all individuals age 65 or older are covered by Medicare; many poor individuals under age 65 are covered by Medicaid; and 60 percent of individuals under age 65 have employer-sponsored coverage. Nearly all large employers offer health coverage to their employees, but only about one-third of employers with fewer than 50 employees do. Thirty-seven percent of individuals under age 65 obtain coverage from private employers with 50 or more employees, nine percent from smaller private employers and 13 percent from governmental employers. Another nine percent purchase individual policies.
Today, businesses generally purchase health insurance in one of three market segments, depending on their size. These segments are: (1) The individual market, which includes working owners if they are not covering employees and therefore cannot establish a group health plan, other individuals, and their families; (2) the small group market, for small employers; and (3) the large group market, which generally includes employers with more than 50 employees. Many large employers self-insure rather than purchase group insurance in the large group market.
Relative to large employers, small businesses purchasing health insurance in the individual and small group markets generally face at least two inherent economic disadvantages. First, owing to their small size, working owners and other small businesses lack very large employers' potential for administrative efficiencies and negotiating power. Second, unlike large businesses, individual small businesses do not constitute large, naturally cohesive risk pools. Any single small business's claims can spike abruptly due to one serious illness. Relative to large employers, small businesses also face more rigorous regulatory requirements. The ACA imposes requirements in the individual and small group health insurance markets that do not apply in the large group market or to self-insured plans. For example, the ACA imposes adjusted community rating rules and mandates coverage of ten categories of EHBs.
While some AHPs exist today, before the issuance of this final rule, their reach was limited by the Department's prior interpretation of the conditions when an AHP constitutes an employer-sponsored plan under ERISA. Under the prior interpretation, eligible group or association members had to share a common interest (usually, in practice, operate in the same industry) and genuine organizational relationship, join together for purposes other than providing health coverage, exercise control over the AHP, and have one or more employees in addition to the business owner in order for the group or association to qualify as bona fide. Absent any one of these criteria, AHPs were treated not as single, large-group plans, but as issuers or distributers of separate individual, small-group, and/or large-group policies to participating members, based on the status or size of the member. The prior interpretation precluded an AHP's potential advantage of allowing small businesses and working owners to tailor benefit packages under largely the same rules available to large employer plans. Instead, the prior interpretation forced AHPs not meeting the requirements of the prior interpretation to subject their members to different rules, depending on the members' status as an individual working owner, or small or large employer, diminishing any potential for administrative cost savings. Accordingly, after consideration of public comments on the Proposed Rule, the Department is publishing this final rule, which broadens the conditions under which an AHP will be treated as a single large group plan. As a result, the number of small businesses eligible to participate in such AHPs will increase, and many Americans will have new, affordable employment-based health coverage options.
The final rule generally does this in four important ways. First, it relaxes the requirement that group or association members share a common interest, as long as they operate in a common geographic area, in order for the group or association to qualify as bona fide. Second, it confirms that groups or associations whose members operate in the same trade, industry, line of business or profession can sponsor AHPs under the final rule, regardless of geographic distribution. Third, it clarifies the existing requirement that bona fide groups or associations sponsoring AHPs must have at least one substantial business purpose unrelated to the provision of benefits. Fourth, it permits AHPs that meet the final rule's new requirements to enroll working owners without employees. Consequently, for example, the final rule would newly allow a local chamber of commerce that meets the other conditions in the rule to offer AHP
Under this final rule, AHPs will be able to offer many small businesses more attractive and affordable health coverage options than are currently available to them in the ACA-compliant individual and small group markets. These options will include tailored plans that omit certain benefits that some small businesses and their employees may prefer to forgo in return for reduced cost. Small businesses taking advantage of these tailored options may accrue economic advantages for themselves and their employees.
Absent this final rule, many small businesses' health coverage choices would be more limited. Under existing ACA federal and state rules, non-grandfathered individual and small group insurance policies generally must provide coverage for ten categories of EHB, and meet certain other benefit standards, for example with respect to actuarial value, and network adequacy. These limits, which are not applicable to large employer plans, hamper the ability of many small employers to offer benefits packages tailored to their needs. Under this final rule, AHPs generally will be subject to the same, more flexible rules to which large employer plans are subject, consistent with leveling the federal regulatory playing field between small and large employers. The Department notes, however, that AHPs and large employers differ with respect to their economic incentives, and the Department does not expect that their behavior will be the same. For instance, AHPs generally will have incentives to tailor benefits to appeal to lower-risk groups—an incentive that large employers generally do not share, as discussed below.
AHPs established under this final rule will be able to match more closely the preferences of many small businesses and often of their employees for the design and price of health coverage than health insurance issuers can in ACA-compliant individual and small group markets. Such closer matches generally will improve the welfare of AHP members. For example, a working owner opting for less comprehensive coverage can devote the attendant savings to uses he or she values more, and will be less apt to overuse medical care (although possibly at more risk of forgoing beneficial care). The same can be said of small business employees whose employer switches from an ACA-compliant small group policy to more affordable AHP coverage that better matches employer and employee preferences on the optimal mix of wages and health benefits and the composition of health benefits.
Some comments expressed concern that AHPs, by offering more tailored, less comprehensive coverage that appeals mostly to less costly groups, will raise the price of comprehensive policies for some small businesses that prefer them, and generally erode choice and affordability for consumers limited to the ACA-compliant individual and small group markets.
The Department notes that AHPs operating under this final rule, like other large group plans, though not subject to the requirement to cover EHB and other requirements applicable only to issuers in the small group and individual markets, are in fact subject to some other significant benefit mandates. These include, for example, a ban on charging participants and beneficiaries higher premiums because they have a pre-existing health condition; a ban on denying coverage of an otherwise covered but pre-existing health condition; a requirement that if the plan
This final rule in effect broadens states' flexibility to tailor their local market rules to their local market conditions and policy preferences. The ACA, in particular, had constrained that flexibility with respect to individual and small group insurance. Expanded AHPs under this rule present an opportunity for states to make available to their local small businesses affordable health coverage options that the ACA had otherwise foreclosed. States' long experience regulating individual and small group markets and close-in knowledge of local market conditions position them to optimize AHPs' role.
Many AHPs will be subject to State benefit mandates. Pennsylvania, for example, requires policies issued in the large group market to cover in-patient and out-patient services for severe mental illness, inpatient and outpatient services for substance use disorders, autism services, childhood immunizations, and mammography.
Many AHPs will pursue advantages of economies of scale that small businesses do not currently enjoy. AHPs sponsored by pre-existing groups or associations that perform multiple functions for their members other than offering health coverage (such as chambers of commerce or trade associations) might have more potential to deliver administrative savings than those established for the principal purpose of offering health coverage. These existing organizations may already have extensive memberships and thus may have fewer setup, recruitment, and enrollment costs than organizations newly formed to offer insurance. These existing organizations that have been limited in their ability to offer AHPs to some or all of their existing members (for example, to working owners or workers outside of a common industry) by the Department's prior interpretations could newly extend AHP eligibility to such members.
As with traditional insurers of individuals and small groups, AHPs' most promising potential for economies of scale may be an ability to negotiate discounts with healthcare providers. Such discounts may reflect a combination of (1) administrative efficiencies from economies of scale; (2) influence over providers' utilization decisions and practices; (3) reduction of any excess provider profits; and (4) sometimes modest cost-shifting to other payers who have less negotiating leverage.
Only large AHPs are likely to secure provider discounts similar to those that large health insurance issuers often can deliver to their individual and small group customers. Large issuers have the benefit of aggregating their purchasing power across all market segments in which they participate, potentially including private individual, small and large group insurance, large self-insured employer customers, Medicare Advantage, and Medicaid. These latter segments often account for a disproportionately large fraction of provider utilization volume. AHPs generally will have more potential to negotiate provider discounts if they opt to keep their provider networks narrow, so as to concentrate use and scale among available providers. Geographically-based AHPs, which this final rule allows for the first time, may be most likely to be able to secure provider discounts. On the other hand, AHPs' entry sometimes could dilute other payers' abilities to obtain discounts,
Accordingly, AHPs with large shares in local health markets will be best positioned to negotiate discounts with providers. Without the benefit of this final rule, AHP participation has been constricted to date—especially as common geography has not constituted an allowable basis to form an AHP—and as a result, prior AHPs generally have been unable to achieve large local participation. Among MEWAs operating as single large group health plans (hereafter, “plan MEWAs”), total enrollment averaged just 3,437 in 2016. Twenty-eight had more than 10,000 enrollees, and four had more than 50,000, but many of these were dispersed across multiple States.
This final rule, by enabling AHPs to be comprised of otherwise unrelated small employers and working owners who share a common geographic area, will open the door for more AHPs to claim large fractions of local markets and thereby pursue advantages of scale. There are many well established,
The large group market's regulatory flexibility is likely to encourage and enable more existing organizations to pursue more potential scale advantages for small business members. These might include some MEWAs that currently do not constitute single large group plans but instead encompass multiple plans, each sponsored separately by a participating employer (hereafter “non-plan MEWAs”). In 2016, one non-plan MEWA covered more than 50,000 enrollees in Connecticut. A second covered more than 100,000 across 22 States and more than 20,000 in Tennessee alone.
Under favorable conditions, AHPs may achieve other economies of scale. For example, small group and individual insurance sometimes can be beset by high distribution costs, reflecting for example commissions paid to agent and brokers who sell policies, possibly amplified by churning of small businesses into or out of the market or between issuers. AHPs, unlike large employer plans, must themselves incur some cost to distribute insurance to large numbers of small businesses. However, relative to traditional health insurance issuers and agents, some AHPs might reduce these costs, for example if they are able to take economic advantage of members' existing ties to the sponsoring group or association and/or if they are more able or inclined than traditional issuers and agents to minimize churn. Little hard data exists on the degree to which such scale advantages might flow to future AHPs, due to a rapidly changing marketplace and the restrictive requirements imposed on AHPs before this rule. Several commenters argued that these advantages have been elusive in the past, and under this rule are likely to be small and available only under certain favorable conditions. One such public comment stated that where available, “administrative savings of more than 2-3 percent appear to be highly unlikely . . . .”
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Large AHPs sometimes may achieve savings by offering self-insured coverage. Because large group plans in and of themselves constitute large and potentially stable risk pools, it often is feasible for them to self-insure rather than to purchase fully-insured large group insurance policies from licensed health insurance issuers. Large risk pools' claims experience generally varies only modestly from year to year, so well-run large group plans can set premiums and operate with little risk of financial shortfalls. By self-insuring, AHPs sometimes may avoid the transaction cost associated with buying large group insurance from an issuer and the cost associated with the issuer's profit margin. They sometimes may avoid the potentially significant cost to comply with State rules that apply to large group issuers, including for example premium taxes, benefit mandates, market conduct rules, and solvency standards. Under this final rule, however, States retain authority to extend such rules to self-insured AHPs, and AHPs will be subject to ERISA requirements that demand sound financial management.
While some AHPs may achieve significant administrative efficiencies for their small business members from economies of scale, the magnitude of such savings is likely to be smaller than the savings AHPs can deliver by offering more tailored, less comprehensive benefits, offering actuarially fair price discounts to low-risk groups, and assembling favorable risk pools. Some AHPs will successfully deliver economic value to their members even if these AHPs have relatively high administrative costs. Consequently, while some AHPs may deliver significant savings for their members from economies of scale, other AHPs may not deliver such savings or may even increase administrative costs.
As noted above, AHPs established under this final rule will enjoy regulatory flexibility to design more tailored, less comprehensive health
AHPs' exercise of their relative flexibility will lead to some degree of favorable risk selection toward AHPs and adverse selection against individual and small group markets. This risk segmentation will increase premiums somewhat in ACA-compliant individual and small group markets. The Department's Proposed Rule identified these considerations, reviewed mixed evidence on the likelihood and extent of risk segmentation, and predicted that the proposal's nondiscrimination rules together with AHPs' potential to deliver savings from scale advantages would substantially limit, but not entirely eliminate, such risk segmentation. Some commenters, however, asserted that even with the benefit mandates that apply in the large group market and the nondiscrimination rules included in this final rule, many AHPs, by design and/or in response to market forces, unless prevented by State regulation, will assemble disproportionately favorable risk pools and thereby subject local individual and small group markets to adverse selection and premium increases. After evaluating these comments, the Department believes that AHPs' scale advantages generally will be insufficient to limit risk segmentation. This final rule's nondiscrimination provisions will reduce, but not eliminate, AHPs' risk-segmentation effects.
Under this final rule, AHPs' ability to segment risks will be limited by a number of forces. An AHP that forms under this final rule, and that may enroll otherwise unrelated small businesses and working owners, cannot adjust employer members' premiums based on their respective employees' health status. States may take additional steps to limit AHPs' risk segmentation effects, which would limit the ability to set actuarially fair prices and might limit AHP formation. AHPs are controlled by their members and, therefore, in some cases, AHPs' belief that their members are better off and their reputation is enhanced by offering broader benefit packages with more community-rated prices, may weigh against the competitive pressure to calibrate benefits and prices to avoid bad risks. Likewise, very large AHPs' size sometimes may itself blunt this pressure. Finally, risk selection efforts are subject to increasing costs and diminishing returns.
Nevertheless, AHPs established under the final rule will, within the general rules applying to large group plans and the specific nondiscrimination provisions in this final rule, by escaping some ACA pricing restrictions and forced cross-subsidies, will tend to segment risks. Relative to ACA-compliant issuers in the individual and small group markets, AHPs can offer more actuarially fair (and potentially much lower) prices to lower risk groups based, for example, on age, gender, or industry. Moreover, AHPs additionally can design health coverage to attract lower risk groups. At the same time, the Department finds that risk segmentation will be limited for reasons discussed above and further in this section. While under this final rule AHPs and large employer plans will have a similar federal regulatory environment, their economic incentives will be different. Large employers design and price health benefit offers to recruit and retain productive workers and to maximize those workers' productivity. Consequently, large employers typically offer heavily subsidized comprehensive health coverage for employees and their families. In contrast, AHPs will design and price offers for their members in competition with more heavily regulated individual and small group issuers, and possibly with one another. This favors actuarial pricing that accurately reflects risk differences between, for example, genders, age groups, and industries, and more tailored, often less comprehensive benefits, insofar as such pricing and benefits will attract favorable risk pools and facilitate lower premiums.
Some groups or associations may prefer to provide comprehensive benefits at community rates that do not discriminate among members by age or gender. Such groups or associations might be motivated by a sense of obligation toward or solidarity among members, such as workers with a common trade. Trade unions historically have negotiated comprehensive multiemployer benefit arrangements with large numbers of small and medium sized companies, with costs allocated based on hours worked rather than on actuarial factors. On the other hand, AHPs may be more vulnerable than union-negotiated arrangements to competition from other groups or associations more willing to use actuarial pricing and/or benefit limitations to provide potential savings for many of the same members. Such competitive pressure may force groups or associations to adopt actuarial pricing reflecting risk and limited benefits as defenses against adverse selection. Groups or associations that naturally comprise relatively favorable and homogenous risk pools may be best able to sustain nondiscrimination in rate setting, because they will enjoy savings that can be shared widely, and can spread thinly across young and healthy members the costs attributable to the few needing expensive care. Such AHPs, however, while refraining from discrimination internally, could increase adverse selection against local individual and small group markets.
AHPs historically have utilized actuarial pricing. According to comments, existing AHPs often rate employer members based on health factors such as claims, and need flexibility to do so to ensure their success. Nearly all AHPs in Washington State experience rate.
One comment
A publicly available report estimated that under the Department's proposal, nationwide by 2022 AHPs would increase overall premiums in individual markets by between 2.7 percent and 4.0 percent, and in small group markets by between 0.1 percent and 1.9 percent.
Some analysts examining federal AHP legislation considered in the early 2000s likewise pointed to the potential for risk segmentation, but disagreed over the likely magnitude. One report concluded that premiums for firms in State-regulated markets would increase by 23 percent.
A more recent report
While some comments and other evidence support the conclusion that AHPs' flexibility under this rule will lead to risk segmentation, the comments do not allow the Department to predict its extent. Furthermore, many comments also affirm that this rule's application of nondiscrimination rules to AHPs established under this final rule will reduce its degree. Experience in Oregon under the ACA suggests that AHPs operating under the Department's pre-rule guidance have taken advantage of available flexibility to vary individual small businesses' premiums to reflect their respective expected costs more widely and based on more factors than permitted in individual and small group markets.
AHPs' potential to attract a favorable risk pool is limited by a number of factors, and AHPs themselves sometimes may suffer some degree of adverse selection. The nondiscrimination provisions of this final rule limit AHPs' ability to set actuarially appropriate prices. In addition, AHPs' efforts to select favorable risks generally would yield diminishing returns; that is, there is a point beyond which additional selection efforts would themselves cost more than could be justified by any savings from attendant selection results. AHPs under this final rule generally may not condition employer members' eligibility, benefits, or premiums on their employees' health factors. AHPs generally can condition these things on many other factors, including for example age, gender, industry, occupation, and geographic location. These factors do not fully correlate with health status, however, and there may be declining returns and/or increasing administrative costs associated with more aggressive and granular use of these factors to select risk. A similar argument may apply with respect to AHPs' use of benefit design or tailored marketing to select risks.
AHPs that are barred from adjusting employer members' rates based on health status (namely, those that qualify as large group plans under this final rule but not under the Department's pre-rule guidance) are likely to face some potential for adverse selection, particularly where competing with other AHPs and/or other non ACA-compliant plans for some of the same enrollees. At least one comment notes that AHPs, while vulnerable to adverse selection, would be without applicable “offsetting stabilization mechanisms” such as the “subsidies, risk adjustment, reinsurance, open enrollment provisions, and coverage mandate” that the ACA provided in individual and small group markets.
Comments also demonstrate that successful AHPs can coexist with stable and viable individual and small group markets, even if those AHPs operate under looser rules, are able to set more actuarially fair prices, and realize some degree of favorable selection relative to local small group markets. Comments and other public evidence suggest that such conditions now prevail in some form in Oregon and Washington State, for example.
A 2014 report examines Oregon's AHP market.
A 2011 report
Washington AHPs' experience may differ from new AHPs' experience under this final rule, for many reasons. For example, Washington's experience generally is limited to the small group market, while new AHPs can offer coverage to working owners who may now be purchasing in individual markets, where the potential both for savings for AHP enrollees and adverse selection against other risk pools will be different and possibly greater. In addition, while Washington AHPs have rated members based on health status, AHPs operating under this final rule cannot, so such AHPs' potential to offer targeted savings and select risk relative to small group markets are more limited.
The impact of this final rule on State individual and small group risk pools is highly dependent on State regulatory practices. States under this final rule retain broad authority to pursue steps to optimize AHPs' role in their local markets.
In response to requests in comments on the Proposed Rule, this final rule makes clear that AHPs can attach rewards and penalties to individual enrollees' participation in wellness programs. These rewards and penalties are separate from (and may add to or offset) pricing differences based on risk factors such as age, gender or industry. Under federal rules, financial rewards or penalties can be as much as 30 percent of an enrollee's total premium, or 50 percent where the additional 20 percentage points are associated with tobacco use. Wellness programs must be designed to promote health, and not to penalize or screen out individuals in poor health. Their rewards must be reasonably available to all. In practice, however, some permissible program designs and practices nonetheless may tend to deliver fewer rewards or more penalties to less healthy individuals, who, relative to healthier individuals, may on average find participation to be more costly or less appealing. Consequently, while AHPs operating under this new rule may not condition premiums on health status, some AHPs' wellness programs in practice may have a disparate negative impact on those in poorer health. Such wellness programs sometimes could yield additional favorable selection toward AHPs.
The Department believes that the provisions of this rule and States' broad authority to adjust local rules, combined with the attendant benefits of extending insurance to small businesses and working owners, strike the right balance to both limit and justify consequent adverse selection against local markets.
The Department separately considered AHPs' potential impacts on both the individual and small group markets. With respect to individual markets, many of those insured there now might become eligible for AHPs.
The Proposed Rule described some relevant features of individual and small group markets under the ACA and existing State rules. Here the Department presents considerations raised by subsequent developments, comments on the Proposed Rule, and other newly identified information. Importantly, it considers the role of individual market subsidies, the reduction of the individual shared responsibility payment to $0 for those who do not have minimum essential coverage and do not have an exemption beginning in 2019, and the role of other (non-AHP) non ACA-compliant plans in individual and small group markets.
AHPs' impact on local individual markets is likely to differ based on market sub-segments and the effect of State regulation. To the extent not prevented by State rules, AHPs are likely to result in some adverse selection and associated premium increases in the individual and small group markets. States' approaches are likely to vary widely and to range from steps that maximize AHPs' flexibility
With respect to individual markets, as discussed earlier, consequent to this final rule premiums are likely to increase modestly on average. The increases might vary widely across local markets. As noted above, in 2015, approximately 3 million individual market enrollees were working owners or their dependents. It is likely that under this final rule AHPs will offer insurance to many of these individuals. AHP coverage offers generally are likely to be most affordable and attractive to categories of individuals with lower expected claims, such as young single men, and for the 1 million of the 3 million working owners with incomes too high to qualify for subsidies on the Exchanges (more than four times the poverty threshold).
Also as noted above, about 12 million people insured in individual markets were employees of small private businesses or dependents thereof. Among those, some strong candidates for AHP enrollment are those with incomes too high to qualify for premium tax credit subsidies whose small employers already offer them insurance, who number 800,000. Another 1.4 million have offers from small employers but lower incomes. To the extent that their offers are affordable and provide minimum value, such individuals are ineligible for ACA subsidies on Exchanges and therefore likely to be strong candidates for AHP enrollment. The remaining 9 million are currently without offers from their small employers, and consequently would gain AHP eligibility if their small employers join an AHP to begin offering health coverage to these employees. However, a majority of these 9 million are eligible for subsidies on exchanges.
Recent economic research shows that small businesses with 49 or fewer employees have a high after-tax price elasticity for offering employer-sponsored health insurance to their employees. For small businesses, a one percent reduction in the after-tax price would cause a 0.82 percent increase in the likelihood of offering employer-sponsored health insurance, the research found. For medium-sized business with 50 to 499 employees, a one percent reduction in the after-tax price would cause a 0.35 percent increase in the likelihood of offering employer-sponsored health insurance. For large businesses with 500 or more employees, however, the after-tax price elasticity for offering employer-sponsored health coverage is not statistically different from zero. The high after-tax price elasticity for small businesses cannot be directly applied to project a potential net increase in offers under the final rule, for two reasons. First, AHP coverage is likely to differ from ACA-compliant small group coverage not only with respect to price but also with respect to benefit design and comprehensiveness. Second, AHPs will set different premiums for different members conditional on cost related factors such as age, gender, and industry, so it is unclear whether the employers most inclined to respond to price decreases will see large or small decreases, or no decreases. Nonetheless, this research does corroborate the proposition that lower premiums from the expansion of AHP plans under the final rule will cause some small businesses that do not currently offer employer-sponsored health coverage through the ACA-compliant small-group market to begin offering employer-sponsored health coverage to their employees through AHPs. The Department did not rely on this research to reach any conclusions regarding the effects of the final rule on the likelihood that small businesses would begin offering health coverage through AHPs. Instead, the Department includes this information as a supplement to corroborate its findings.
A publicly available report estimated that between 2.4 million and 4.3 million individuals would move from the individual and small group markets combined, and enroll in AHPs by 2022 under a moderate enrollment scenario, between 710,000 and 1.1 million of which would move from the individual market.
A large majority of individuals insured on Exchanges will have some insulation from any premium increases resulting from the exit of individuals to AHPs, because the ACA provides a tax credit that in effect caps the premiums that those eligible taxpayers with household incomes at or below 400 percent of the federal poverty level must pay on Exchanges for coverage in a benchmark “silver” plan with an actuarial value of approximately 70 percent. That cap rises with income, to about $9,400 for a family of 4 at 400 percent of the federal poverty level. Consequently such a family enrolling in the benchmark plan and facing a potential premium increase from a base of $9,400 or more would be largely insulated from that increase.
Not all exchange participants will be fully insulated from increases in individual market premiums. This includes individuals with household incomes above 400 percent of the federal poverty level (for a family of four, with an annual household income of approximately $100,000 or more), individuals whose current premiums are below the applicable cap (they are exposed to premium increases up to the cap), and individuals who elect plans that cost more than the benchmark plan. Further, those insured in the small group and individual markets outside the Exchanges might also have premium increases. The Department estimates that 6 million individuals insured in individual markets in 2015 have household incomes above 400 percent of the federal poverty level and either have no connection to a small business or work for a small employer that does not offer them insurance. These individuals could be exposed to premium increases as a result of the implementation of AHPs, and generally are unlikely to qualify for AHP enrollment. The Department estimates that an additional 2 million insured in individual markets in 2015 have household incomes above 400 percent of the federal poverty level and either connection to working ownership or offers from small employers. These individuals are relatively likely to qualify for AHP enrollment but could be exposed to premium increases if they remain in the individual market.
Some individuals facing premium increases may elect to go without insurance. This is especially true because Public Law 115-97, enacted December 22, 2017, will reduce to 0 percent the individual shared responsibility payment for failure to maintain minimum essential coverage or have an exemption effective beginning in 2019.
With respect to small group markets, as with individual markets, this rule can be expected to increase premiums modestly on average, and those increases will vary across local markets. One estimate finds that between 1.7 million and 3.2 million enrollees will migrate from small group markets to AHPs by 2022.
A recent report examined small group market experience under the ACA.
On May 23, 2018 after the comment period for the proposed rule had closed, the U.S. Congressional Budget Office (CBO) issued a report titled “Federal Subsidies for Health Insurance Coverage for People under Age 65: 2018 to 2028.”
Under the ACA, Medicaid eligibility was expanded in many States. Some Medicaid-eligible workers may become eligible to enroll in AHPs under this final rule. Among 42 million individuals under age 65 enrolled in Medicaid or CHIP in 2015, 2 million were working owners or dependents thereof, and 13 million were employees of small businesses or dependents thereof.
Twenty-eight million individuals in the U.S. lacked health insurance coverage in 2015.
The Department lacks data to quantify the effect of the final rule on the uninsured population. Publicly available estimates shed only limited light on the question. By one publicly available estimate, AHPs under the Proposed Rule by 2022 on net would add 130,000 individuals to the uninsured population.
AHPs are likely to influence the
Various studies of past federal and State reforms that tightened or loosened individual and small group market rules confronted a substantially different health insurance marketplace and hence are of only modest value in predicting the final rule's effects. The studies show that the changes may have changed the prices paid and policies selected by different businesses, somewhat improved access for targeted groups (potentially at others' expense), and/or prompted some individuals or small businesses to acquire or drop insurance, but had little
As previously noted, CBO recently analyzed the effects for the proposed rule for Association Health Plans issued on January 5, 2018 and the proposed rule for Short-Term, Limited Duration Insurance (STLDI) issued on February 21, 2018. CBO stated that “[i]n 2023 and later years, about 90 percent of the 4 million people purchasing AHPs and 65 percent of the 2 million people purchasing STLDI plans would have insured in the absence of the proposed rules, CBO and JCT estimate.” Thus, about 400,000, or 10 percent of the 4 million people purchasing AHPs, would come from the ranks of the uninsured. (It is unclear whether this latter estimate would have been higher or lower in the absence of the STLDI proposal, which is not part of this final rule but remains under consideration. Absent STLDI, some otherwise uninsured individuals who would have gained STLDI coverage might gain AHP coverage instead. On the other hand, some individuals facing premium increases or losing small employer offers consequent to AHPs who would have signed up for STLDI policies, absent such policies might drop insurance and become uninsured.) The Department did not rely on the information contained in the CBO report to reach its conclusions regarding the effects of the final rule on uninsured persons, but notes that the CBO's findings are consistent with the Department's own findings.
A number of comments on the Proposed Rule expressed concern that AHPs will be vulnerable to the same sorts of mismanagement and abuse that historically afflicted a large number of MEWAs.
ERISA generally classifies AHPs as MEWAs. Historically, some MEWAs have suffered from financial mismanagement or abuse, leaving participants and providers with unpaid benefits and bills.
The Department stresses that AHPs are also subject to existing federal regulatory standards governing MEWAs, and sponsors of AHPs would need to exercise care to ensure compliance with those standards. The ACA's additional enforcement tools and improvements in the MEWA registration and reporting requirements were designed to reduce MEWA fraud and abuse. Under ERISA section 521, the Secretary may issue an ex parte cease and desist order if it appears to the Secretary that the alleged conduct of a MEWA is fraudulent, or creates an immediate danger to the public safety or welfare, or is causing or can be reasonably expected to cause significant, imminent, and irreparable public injury. As an example, a MEWA can be found to create an immediate danger “for failure to establish and implement a policy or method to determine that the MEWA is actuarially sound with appropriate reserves and adequate underwriting.” 29 CFR 2560.521-1(b)(3). Section 521(e) of ERISA authorizes the Secretary to issue a summary seizure order if it appears that a MEWA is in a financially hazardous condition. Generally, any conduct by a fiduciary that meets the requirements for the issuance of a cease and desist or summary seizure is a violation of his fiduciary duties.
The ACA also expanded reporting and required registration for MEWAs with the Department. MEWA registration requirements require plan and non-plan MEWAs to file Form M-1 under ERISA section 101(g) and 29 CFR 2520.101-2 prior to operating in a State. Further, all employee welfare benefit plans that are MEWAs subject to the Form M-1 requirements are required to file the Form 5500, regardless of the plan size or type of funding.
The Department recently examined the universe of these reports for MEWAs (including AHPs) operating in each year from 2012 through 2016. According to this examination, in 2016, 536 MEWAs covered approximately 1.9 million employees. The vast majority of these MEWAs reported themselves as ERISA plans that covered employees of two or more employers. Nearly all of these covered more than 50 employees and therefore constituted large-group employer plans for purposes of the ACA. A small fraction reported as so-called “non-plan” MEWAs, that provided or purchased health or other welfare benefits for two or more ERISA plans sponsored by individual employers (most of which probably were small group plans for ACA purposes). Some of these might qualify to begin operating as “plan-MEWAs” (or AHPs) under this final rule, which is intended to facilitate the establishment of more new plan-MEWAs/AHPs, all of which would be required to report annually to the Department.
A little more than one-half of reporting MEWAs operate in just one State, while a handful operate in all 50 States. In 2016, 58 MEWAs reported expanding operations into one or more new States. States with the most plan-MEWAs/AHPs in 2016 included California (122), Texas (98), Washington (95), New York (94), and Ohio (91). Only one had fewer than 20 (Hawaii had 17). Self-insured MEWAs generally are more vulnerable to financial mismanagement and abuse than fully-insured ones. MEWAs were most likely to be entirely or partly self-insured in certain western States including North Dakota (42 percent), Wyoming (41 percent), and Montana (37 percent). About one-fourth of reporting MEWAs are entirely or partly self-insured in all the States in which they operate, and another 4 percent are entirely or partly self-insured in some States. The remaining majority does not self-insure and instead is fully insured by issuers in all States in which they operate. Nearly all reporting MEWAs offered health coverage, and many offered other additional welfare benefits (such as dental, vision, life insurance, and/or disability insurance).
While plan MEWAs generally are required to file both Form M-1 and Form 5500, many fail to file both or report potentially inconsistent information across the two forms. Among plan MEWAs filing Form M-1 for 2015, approximately two-thirds can be linked readily with a corresponding Form 5500, suggesting that many either fail to file one or both forms, or file inconsistent identifying information that inhibits linking the two. Among those that can be linked, information provided sometimes is not consistent across the two forms. In addition, among self-insured MEWAs, 41 percent indicated that they had not obtained actuarial opinions about their financial stability. MEWAs must indicate on Form M-1 whether they are in compliance with a number of ERISA's minimum health plan standards and with ERISA's general requirement that plans hold assets in trust. As of 2016 nearly none reported lack of compliance with the former, but 14 percent reported that they did not comply with the trust requirement. These apparent reporting and operational deficiencies underscore the need for the Department and States to allocate resources to effectively oversee AHP operations and prevent mismanagement and abuse.
Since 1985, the Department's records indicate that it has pursued a total of 968 civil enforcement cases involving MEWAs, affecting more than 3 million participants. Among these cases, 338 involved allegations of fiduciary violations, 215 involved allegations of prohibited transactions (generally involving financial conflicts of interest), and 301 yielded monetary restitution of more than $235 million from the violations. (Many of these and other related cases involved other types of violations such as failure to follow plan terms or healthcare laws, provide plan benefits, or reporting and disclosure deficiencies.) The Department's enforcement efforts often were too late to prevent or fully recover major financial losses. The Department generally does not consistently measure or record those associated unpaid claims or their financial impacts on patients and healthcare providers. The Department additionally has pursued 317 criminal MEWA-related cases, resulting in 118 convictions and guilty pleas, and $173 million in ordered restitution.
This rule includes provisions intended to protect AHPs against mismanagement and abuse. It requires the group or association to have a formal organizational structure with a governing body and by-laws or other similar indications of formality appropriate for the legal form in which the group or association is operated. This requirement is intended to ensure that the organizations are bona fide organizations with the organizational structure necessary to act “in the interests” of participating employers with respect to employee benefit plans as ERISA requires. The rule also requires employer members to control the functions and activities of the group or association and the employer members that participate in the plan to control the plan. This requirement is necessary both to satisfy ERISA's requirement that the group or association must act directly or indirectly in the interest of employers in relation to the employee benefit plan to meet the definition of employer, and to prevent formation of commercial enterprises that claim to be AHPs but that operate like traditional issuers selling insurance in the employer marketplace and that may be vulnerable to abuse. In addition, the final rule allows only employer members to participate in the AHP, and health coverage must only be available to or in connection with a member of the group or association, in order for the group or association to qualify as bona fide. Together, these criteria are intended to ensure that groups or associations sponsoring AHPs are bona fide employment-based groups or associations and more likely to be resistant to abuse.
An AHP sponsored by a bona fide group or association under this final rule is a group health plan under ERISA. Accordingly, AHPs are subject to all of the provisions of Title I of ERISA applicable to group health plans. Therefore, participants and beneficiaries receiving their health coverage through AHPs are entitled to the same protections under ERISA that are available to participants in single employer group health plans. For example, AHPs may not exclude coverage for preexisting conditions, impose lifetime and annual dollar limits on essential health benefits, or discriminate based on health factors. AHPs that provide dependent coverage must permit dependents to remain
Nevertheless, the Department anticipates that the increased flexibility afforded AHPs under this rule will introduce increased opportunities for mismanagement or abuse, in turn increasing oversight demands on the Department and State regulators. A report responding to Executive Order 13813 notes that States can require self-insured AHPs to meet the same solvency and governance standards as issuers and to participate in guaranty funds that protect policyholders when issuers fail. States also can clarify or enact laws allowing their insurance departments to place AHPs into receivership if needed.
The rule is likely to have both positive and negative effects on the budget, with some increasing and others reducing the deficit. On balance, the final rule's net impact on the federal budget is likely to be negative, increasing the deficit.
In 2005, the Congressional Budget Office (CBO) estimated the potential budget impacts of a 2005 legislative proposal to expand AHPs. As noted earlier, that legislative proposal predated the ACA and differed from this final rule, and the impacts of that proposal likely would differ from the impacts of this final rule in the market in 2018 and 2019. Under the 2005 legislation and contemporaneous law, many individuals joining AHPs previously would have been uninsured or purchased individual policies without the benefit of any subsidies; by joining AHPs they stood to gain potentially large subsidies in the form of tax exclusions. CBO predicted that the legislation, by increasing spending on employer-provided insurance, would reduce federal tax revenue by $261 million over 10 years, including a $76 million reduction in Social Security payroll taxes. CBO also predicted that AHPs would displace some Medicaid coverage and thereby reduce federal spending by $80 million over 10 years. Finally, according to CBO, the legislation would have required the Department to hire 150 additional employees and spend an additional $136 million over 10 years to properly oversee AHPs.
Today, many individuals who might have been uninsured in 2005 instead are enrolled in Medicaid or insured and receiving subsidies on Exchanges. When joining AHPs, these individuals in effect would trade existing subsidies for tax exclusions. Market forces generally favor individuals capturing the larger available subsidy, so it is more likely that higher income individuals will have an incentive to enroll in AHPs. To the extent that AHPs may increase premiums in Exchanges, subsidies paid there may also increase. This arguably could improve equity, insofar as transfers from taxpayers are likely to be more progressive than the cross-subsidies from low-risk individuals such transfers would replace. In 2017 approximately 8 million individuals insured on Exchanges received $34 billion in tax credit subsidies.
As discussed later in the preamble, the final rule includes a phased or staged applicability date that provides prompt expansion of AHP availability while addressing certain concerns raised by commenters. The final rule allows fully insured plans to begin operating under the new rule on September 1, 2018. Existing self-insured AHPs can begin operating under the new rule on January 1, 2019, and new self-insured AHPs can begin on April 1, 2019. This phased approach will provide prompt relief to individuals seeking affordable health coverage through AHPs while allotting some additional time for the Department and State authorities to address concerns about self-insured AHPs' vulnerability to financial mismanagement and abuse.
Some comments urge quick action to make AHPs available. Many express impatience for more affordable alternatives to ACA-compliant small group and especially individual policies. These comments appear to be motivated by both the sharp premium increases and scarcity of choices that characterize certain local markets. Absent more affordable alternatives, many small businesses have opted to go without insurance. It is likely that, absent alternatives, more would drop insurance in 2019 as premiums continue to increase and the individual shared responsibility payment is reduced to $0. Many of those who did not drop insurance would be forced to make other economic sacrifices to maintain coverage.
Other comments call for delay. Some comments say delay is needed to accommodate the annual cycle for insurance policy premium approvals by State insurance regulators. The cycle for calendar year 2019 in many States is already underway (March through May, according to one comment),
Some comments urge delay to reduce risks of mismanagement and abuse. Effective AHPs need time to establish robust governance structures, financial arrangements, and businesses practices. Comments claim that any AHP that rushes to begin or expand operations in 2019 could pose risks. The Department and State authorities both need time to build and implement adequate supervision and possible infrastructure to prevent fraud and abuse and possibly
Commenters pointed out that State insurance regulators actively provide oversight and enforcement in the MEWA area to, among other things, prevent fraud, abuse, incompetence and mismanagement, and avoid unpaid health claims. Many States say they will need time for new AHP specific legislation and/or modification of existing regulations and expanded funding for enforcement programs. Commenters also said time will be needed for State regulators to coordinate with the Department on the scope of State authority to regulate, especially with respect to inter-state AHP operations.
Commenters also called for the Department to increase its enforcement activities. This increase would require Congress to appropriate additional funding for the Department's oversight of expanded AHPs and for the Department to expand staff and related enforcement support resources to meet that broader enforcement/oversight mission.
This final rule's phased applicability dates aim to balance the prompt promotion of more affordable health coverage options with caution about market and operational risks. Expanded AHP operations beginning on or after September 1, 2018 will be limited to fully insured AHPs because these AHPs are best positioned to take advantage of this earliest opportunity to offer coverage to individuals and small business and likely to be less susceptible to problems and more prepared to deliver reliable coverage in an orderly fashion. First, such AHPs must be fully insured and therefore protected by already established State oversight of large group issuers' financial stability and market conduct. Second, it is likely that many or most of the earliest AHP growth will build upon existing AHP or group and association operations. This might include for example: (1) An existing plan MEWA/AHP expanding availability to more industries and/or to working owners; (2) an existing non-plan MEWA that currently distributes small group policies to small businesses in multiple industries converting itself into a plan MEWA/AHP that offers large group polices covering the same and possibly additional businesses; and (3) an existing local group or association, such as a local chamber of commerce, that currently does not offer members health insurance partnering with a local large-group issuer to establish an AHP for its members.
Additional expanded AHP operations under this final rule will be limited to currently existing self-insured AHPs beginning on or after January 1, 2019. Starting then, such AHPs could, for example, expand availability to additional industries within a geographic location and/or to working owners without employees, subject to the provisions of this final rule. Existing self-insured AHPs already have been subject to ERISA's fiduciary standards of loyalty and care, and barred from engaging in financial conflicts of interest (except where permitted under an applicable prohibited transaction exemption). Moreover, this final rule leaves intact States' broad authority to oversee these AHPs. Therefore, self-insured AHPs that expand operations pursuant to this final rule's January 1, 2019 applicability date will be the same entities, overseen by the same federal and State authorities, as in the recent past. Extending these entities' ability to offer more affordable health insurance to additional small businesses and working owners justifies any attendant extension of their operational risks.
The last expansion of AHP operations under this final rule applies to new self-insured AHPs' operations beginning on or after April 1, 2019. This modest delay of the applicability date for such AHPs is intended to enable and encourage them to fully prepare for sound operations and provide sufficient time for the Department and the States to implement a robust supervisory infrastructure and program. The Department intends to immediately increase its focus on compliance guidance and enforcement in collaboration with the States.
As noted later in this preamble, this final rule's prompt but phased applicability dates aim to balance quick access to affordable insurance with due caution about adverse market impacts and operational risks. Market forces may favor AHPs that grow fastest in areas where needs are greatest, but such needs magnify AHPs' potential to do both good and harm. The sequencing of applicability dates—fully insured AHPs first, existing self-insured AHPs second, new self-insured AHPs last—responds to this tension by opening the door soonest for earlier growth by lower risk arrangements. Early availability of more affordable insurance for small businesses, especially for those who otherwise would forgo coverage, justifies any possible disruption to individual and small group issuers who have already begun setting 2019 rates and the markets in which they operate.
Further, consistent with EBSA's longstanding commitment to providing compliance assistance to employers, plan sponsors, plan fiduciaries, other employee benefit plan officials and service providers in understanding and complying with the requirements of ERISA, the Department intends to provide affected parties with significant assistance and support during the transition period and thereafter with the aim of helping to ensure the important benefits of the final rule are implemented in an efficient and effective manner.
AHPs' growth and impacts are likely to be more gradual than the phased applicability dates alone would allow. Some comments suggest that many of the most substantial and fully insured AHPs are expected to choose to delay modifying their programs to reflect the new AHP rule and new enrollment activity until calendar year 2020 (the next rating cycle), when the rate environment is more settled and certain.
As required by E.O. 12866, the Department considered various alternative approaches in developing this final rule that are discussed below.
Other commenters asserted that allowing new entities to satisfy the Department's prior guidance under a grandfathering approach potentially would result in more choice for small businesses by allowing them to choose from providing coverage in plans in the traditional health insurance market, the grandfathered AHP market, and the newly expanded AHP market under the final rule.
On the other hand, some commenters were opposed to the Department adding a grandfathering provision, because exempting groups or associations from the nondiscrimination requirements and allowing them to experience rate member employers would result in some entities offering coverage in ways that are inconsistent with the final rule and put new AHPs at a competitive disadvantage compared to grandfathered AHPs.
After considering these comments, the Department has determined that the requirements of the final rule do not supplant the Department's previously issued guidance. As stated above, the final rule expands the opportunities for employer groups or associations to form AHPs by establishing an alternative mechanism for meeting the “employer” requirements specifically by relaxing the commonality requirement, allowing the employer group or association to exist for a principal purpose of offering health coverage, and providing coverage to working owners without employees.
The Department intends for the criteria set forth in this final rule to provide an alternative basis for groups or associations to meet the definition of an “employer” under ERISA section 3(5). Accordingly, the final rule does not require employer groups and associations meeting the criteria under the Department's prior AHP guidance to comply with the nondiscrimination provision of the final rule (although, of course, the HIPAA health nondiscrimination rules continue to apply to the AHP, as a group health plan). Therefore, such AHPs may treat each employer-member as a distinct group of similarly situated individuals to the extent permissible under current HIPAA health nondiscrimination rules based on the facts and circumstances of the particular situation. Allowing new AHPs to operate pursuant to either this new rule or the Department's pre-rule guidance, rather than simply grandfathering existing AHPs to continue operating as before, ensures that new AHPs can compete with existing ones on equal footing.
A number of commenters supporting the Proposed Rule acknowledged that a control test is necessary to ensure that groups or associations act “in the interest” of participating employers in relation to the group health plan, as required by section 3(5) of ERISA. A number of commenters who generally opposed the proposal were skeptical that the proposed control test could adequately protect against fraudulent MEWAs and other entities that may not act in the best interest of the employer members. A few commenters opposed the proposed control test entirely. These commenters generally expressed apprehension about the logistics of requiring participating employer members to control the functions and activities of a large group or association.
After careful consideration of these comments, the Department has determined that the control test is necessary to satisfy the statutory requirement in ERISA section 3(5) that the group or association must act “in the interest of” the employer members in relation to the employee benefit plan in order to qualify as an employer. The control test is also necessary to prevent formation of commercial enterprises that claim to be AHPs but, in reality, merely operate similar to traditional insurers selling insurance in the group market.
The Department, however, slightly modified the language in the final rule to better align the control test with the Department's existing sub-regulatory guidance. Specifically, as revised, the control test provides that the functions and activities of the group or association must be controlled by its employer members in order for it to qualify as bona fide. The control test also requires the group or association's employer members that participate in the group health plan to control the plan. Control must be present both in form and in substance. The determination of whether control exists is based on a facts and circumstances test.
As discussed earlier in this preamble, many commenters, including some who were otherwise supportive of the Proposed Rule, objected to this provision. Several commenters believed that, because most small businesses already have the opportunity to belong to a chamber of commerce or other professional group or association, allowing a group or association to be formed solely for the purpose of sponsoring a group health plan is unnecessary to achieve the Department's goals. Commenters believed that a proliferation of associations established for the exclusive purpose of sponsoring an AHP could diminish the value of existing trade and professional groups. Similarly, a proliferation of groups or associations could also diminish the market power of existing AHPs and those that may be formed by groups and associations that exist for other purposes. In particular, a proliferation of groups or associations could limit these entities' opportunities to achieve the economies of scale that make AHPs an attractive vehicle for providing affordable coverage in the first place. Commenters also argued that allowing groups and associations formed for the sole purpose of offering an AHP could invite unscrupulous promoters to enter
Commenters offered numerous suggestions for alternative criteria determining a bona fide group or association of employers for purposes of the new rule with the aim that those eligible be limited to legitimate, well-managed, and well-intended organizations with the ability to properly operate an AHP. Some commenters supported retaining the requirement in the Department's prior guidance that the group or association exist for other purposes unrelated to the provision of benefits in order for the group or association to qualify as bona fide. Some suggested requiring a group or association to exist for a specified minimum length of time before it could sponsor an AHP. Others suggested requiring the group or association to meet certain criteria for tax-exempt organizations, have minimum revenues unrelated to AHP operations, or demonstrate by other means the capacity to oversee the administrative requirements associated with managing the complexities of an AHP.
After consideration of the public comments, the Department determined that some modification of this provision is appropriate, because the intent of this final rule is to expand access to AHP coverage options, while protecting plan participants and beneficiaries from imprudent, abusive, or fraudulent arrangements. Removing undue restrictions for existing groups and associations as well as for newly-formed groups and associations of employers and working owners is critical to achieving the Department's goal of expanding choice in health coverage options. But the Department shares concerns regarding operational risks such as fraud and insolvency that commenters believed would be more likely with respect to AHPs offered by newly-formed groups and associations that exist solely for the purpose of sponsoring an AHP. In addition, the Department's revisions of the final rule are responsive to concerns that, in the absence of some purpose other than providing health benefits, there may be insufficient basis for treating the group or association as the sort of employment-based group or association contemplated by ERISA section 3(5). Accordingly, the Department is modifying this provision in the final rule to establish a general legal standard requiring a group or association of employers to have at least one substantial business purpose unrelated to offering and providing health care coverage or other employee benefits to its employer members and their employees, even if the primary purpose of the group or association is to offer such coverage to its members. Although the final rule does not define the term “substantial business purpose,” the rule contains an explicit safe harbor under which a substantial business purpose is considered to exist in cases where the group or association can establish that it would be a viable entity even in the absence of sponsoring an employee benefit plan and states that a business purposes does not require a for-profit purpose. The Department believes these modifications assist substantially in drawing a clean line between entities that might exist only to underwrite and sell insurance, on the one hand, and those that qualify as an “employer” under section 3(5) of ERISA, on the other, because of their other substantial business purpose.
After careful consideration of the public comments, the Department has determined that it is important for the final rule to become effective on the earliest possible date to provide plans, plan fiduciaries, plan participants and beneficiaries, and other stakeholders with certainty that will allow them to allocate capital and other resources and make decisions to prepare to implement AHPs pursuant to the final rule.
The Department considered providing the same applicability date for fully insured and self-insured AHPs, but instead chose the following trifurcated applicability dates: September 1, 2018 for new fully insured arrangements; January 1, 2019, for existing self-insured plan MEWAs that meet the employer definition by satisfying the Department's existing sub-regulatory guidance and want to comply with the final rule; and April 1, 2019 for new self-insured AHPs. The Department believes that this approach will allow AHPs in each category to become operational as soon as possible while providing adequate time for plans and their affected service providers to adjust to the final rule. The Department has concluded that a phased or staged compliance date would address the concerns raised in the comments while also facilitating an immediate expansion of AHP availability in the marketplace.
Under this final rule, AHPs can extend eligibility to both employers and working owners without employees. The Department separately considered eligibility for each, together with the respective separate implications for local small group and individual markets, and concluded that each was separately justified. The expansion of AHP opportunities for small employers under this rule will make more affordable choices available to many, including choices provided by geographically-based AHPs that benefit from large local market shares. This justifies any attendant adverse selection against local small group markets. Likewise, the extension of AHP eligibility and choices to working owners will make more affordable choices available to many, including some who otherwise would have dropped insurance altogether. Relative to small employers, the stakes for many working owners are likely to be higher. Working owners without employees currently are confined to local individual markets, many of which are beset by very limited choices and/or very high or rapidly increasing premiums. AHPs can offer many such working owners far more affordable alternatives. Relative to small group markets, such affected individual markets may be both more fragile and more susceptible to adverse selection,
The final rule does not disturb states' authority to regulate AHPs in order to optimize their benefits for working owners and/or ameliorate any attendant negative consequences for local ACA-compliant individual markets.
The Department considered expanding or omitting this provision from the final rule. Some commenters criticized this provision as an undue obstacle to AHPs' proliferation and growth. Some expressed concern that the provision would expose AHPs to adverse selection, while some noted that some existing AHPs currently do condition employer members' eligibility for benefits and/or premiums on their employees' health status. Other commenters praised the provision as a necessary and justified check against AHPs' ability to segment good risks from ACA-compliant individual and small group markets. Some generally criticized discrimination based on health status as contrary to fairness and an obstacle to access and affordability to individuals with health problems who need insurance most. Some argued that this provision alone was inadequate to protect ACA-compliant markets from adverse selection and to preserve fairness, access, and affordability for people with health problems, and that AHPs additionally should be subject to some or all of the ACA and state rules applicable to the individual and small group markets in which they operate.
After careful consideration of the comments, the Department agrees that it is unnecessary and would be counterproductive to outlaw currently existing lawful and successful AHP practices. Therefore, AHPs established under pre-rule guidance will retain the same flexibility as in the past to condition individual employer members' premiums on their respective employees' health status, to the extent permissible under the current HIPAA nondiscrimination rules based on the facts and circumstances of the particular situation.
The Department notes that this final rule's nondiscrimination provisions will limit AHPs' flexibility to set actuarially fair prices, and will reduce risk segmentation that favors AHPs over individual and small group markets. This final rule newly authorizes multi-industry, geographically-based AHPs, and AHPs that include working owners. In combination, the flexibility to condition employer members' premiums on health status and the ability to claim a large local market share would pose a greater potential for adverse selection against ACA-compliant markets than that presented by existing AHPs. The Department further notes that this final rule's nondiscrimination provision will increase AHPs' exposure to adverse selection, and with it their propensity to defend against adverse selection by limiting some benefits.
However, after careful consideration of the comments, the Department decided the nondiscrimination provision in paragraph (d)(4) should be retained. As discussed in section B.2.g. of the preamble, above, under the heading
The expansion of AHPs under this final rule will provide small businesses, including working owners, with additional and more affordable health insurance options that will more closely match their preferences. Many employees of small businesses will appreciate the more affordable health insurance provided through AHPs. Relative to ACA-regulated health insurance issuers in individual and small group markets, AHPs will be able to offer more affordable options by pursuing economies of scale and offering more tailored, often less comprehensive benefit packages that are priced in a more actuarially fair manner.
Increased regulatory flexibility will necessarily result in some segmentation of risk that favors AHPs over individual and small group markets. However, practical considerations and federal nondiscrimination rules will limit such segmentation. States may further limit risk segmentation. Favorable selection toward AHPs will help reduce premiums for many small businesses, but will increase premiums somewhat for individuals and other small business remaining in the ACA-compliant individual and small group markets. Subsidy-eligible taxpayers with household incomes at or below 400 percent of poverty purchasing coverage on Exchanges generally will be protected from these premium increases.
Operational risks demand increased federal and state oversight. Overall, this rule delivers social benefits that justify any attendant social costs.
The final rule is not subject to the requirements of the Paperwork Reduction Act of 1995 (PRA 95) (44 U.S.C. 3501,
The Regulatory Flexibility Act (5 U.S.C. 601,
This final rule is intended and expected to deliver benefits primarily to the employees of many small businesses and their families including many working owners, as well as many small businesses themselves. As discussed in more detail in section 2 of the RIA, this final rule would encourage the establishment and growth of AHPs. AHPs may offer many small businesses and working owners additional and more affordable health benefit options than otherwise are available to them in the individual and small group markets.
The Small Business Administration estimates that 99.7 percent of employer firms meet its definition of a small business.
• The 25 million individuals under age 65 who currently are covered in individual markets, including approximately three million who are sole proprietors or dependents thereof, and an additional 12 million who are employees of small businesses or dependents thereof;
• The 28 million individuals under age 65 who currently lack insurance, including three million who are sole proprietors or dependents thereof, and an additional 12 million who are employees of small businesses or dependents thereof;
• The 1.6 million private, small-firm establishments (those with fewer than 50 employees) that currently offer insurance and the four million that do not.
As stated above, by expanding AHPs, this final rule would provide additional and more affordable health coverage options for many small businesses, thereby potentially yielding economic benefits for participating small businesses and their employees. The rule may impact individual and small group issuers whose enrollees might switch to AHPs; many of these issuers would likely be small entities. Some small businesses obtaining coverage in the small group health insurance market will experience an increase in premiums. Some of those will not receive attractive alternative offers from AHPs. Some of those may see decreased choice and may even stop offering insurance to their employees due to the premium increases or to issuers withdrawing some offers. The final rule allows states to continue to regulate AHPs, which can serve to mitigate any adverse impacts on small businesses due to the expansion of AHPs.
The RIA and preamble to the final rule includes a discussion of the changes to the Proposed Rule in response to comments. These changes include applying phased applicability dates, modifying the “control” requirement, allowing continued reliance on previous AHP rules so existing AHPs can continue to operate as they do today and new AHPs can form under the Department's previously issued guidance, lowering the hours worked threshold for working owners without employees to 20 hours per week, and requiring AHPs to be established and maintained for at least one substantial business purpose that is not sponsoring a group health plan. The “Regulatory Alternatives” section of the RIA above discusses significant regulatory alternatives considered by the Department.
The final rule would not conflict with any relevant federal rules. As discussed above, the final rule would merely broaden the conditions under which a group or association can act as an “employer” under ERISA for purposes of offering a group health plan and would not change AHPs' status as large group plans and MEWAs, under ERISA, the ACA, and state law. In the final rule, the Department affirms that the rule does not modify existing State authority as established under ERISA section 514(b)(6), which gives the Department and state insurance regulators joint authority over MEWAs, including AHPs, to ensure appropriate consumer protections for employers and employees relying on an AHP for health coverage. Nothing in the final rule changes this joint structure, or is meant to reduce the historically broad role of the States when it comes to regulating MEWAs.
The final rule is subject to the Congressional Review Act (CRA) provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801,
The final rule is a “major rule” as that term is defined in 5 U.S.C 804, because it is likely to result in an annual effect on the economy of $100 million or more.
Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each federal agency to prepare a written statement assessing the effects of any federal mandate in a final agency rule that may result in an expenditure of $100 million or more (adjusted annually for inflation with the base year 1995) in any one year by state, local, and tribal governments, in the aggregate, or by the private sector. For purposes of the Unfunded Mandates Reform Act, as well as Executive Order 12875, this rule does not include any federal mandate that the Department expects would result in such expenditures by state, local, or tribal governments, or the private sector. The rule merely broadens the conditions under which AHPs will be treated as large group health benefit plans under ERISA, the ACA and state law.
Executive Order 13132 outlines fundamental principles of federalism, and requires the adherence to specific criteria by federal agencies in the process of their formulation and implementation of policies that have “substantial direct effects” on the States, the relationship between the national government and States, or on the distribution of power and responsibilities among the various levels of government. Federal agencies promulgating regulations that have
In the Department's view, this final rule would have federalism implications because they would have direct effects on the States, the relationship between the national government and the States, and on the distribution of power and responsibilities among various levels of government. The Department believes these effects are limited, insofar as the final rule would not change AHPs' status as large group plans and MEWAs, under ERISA, the ACA, and state law. As discussed above in this preamble, because ERISA classifies AHPs as MEWAs, they generally are subject to state insurance regulation. Specifically, if an AHP is not fully insured, then under ERISA section 514(b)(6)(A)(ii) any state insurance law that regulates insurance may apply to the AHP to the extent that such state law is not inconsistent with ERISA. If, on the other hand, an AHP is fully insured, ERISA section 514(b)(6)(A)(i) provides that only those state insurance laws that regulate the maintenance of specified contribution and reserve levels may apply to the AHP, although the States, of course, retain regulatory authority over the insurance company itself and any policies it issues. The Department notes that state rules vary widely in practice, and many States regulate AHPs less stringently than individual or small group insurance.
In the course of developing this final rule, the Department consulted directly with a number of state officials, including state insurance department representatives and state-based Exchange representatives, as well as with the National Association of Insurance Commissioners.
The Department received many comments, including from several state insurance regulators, asserting that it is very important for the Department not to draft or implement the final rule in a manner that undermines or impairs the current ERISA preemption provisions that broadly permit states to regulate AHPs. They maintained that if the final rule prevents states from applying their insurance laws to AHPs, market fragmentation could result, because AHPs could be established in a state with less restrictive issuer and rating rules relative to other states. These commenters argued that AHPs operating in multiple states should be required to abide by the regulations of each of the states in which the plan operates, and not just the state in which the group or association or their AHP is deemed to be domiciled. Another commenter suggested that the final rule should distinguish self-insured AHPs, which have historically presented problems in the market, from fully-insured AHPs, which are backed by licensed insurance companies and subject to oversight by state insurance commissioners and HHS. A few commenters asked that DOL promulgate a rule under ERISA section 520 which authorizes the Department to make persons operating AHPs subject to otherwise preempted state insurance laws to prevent fraud and abuse.
The main point of these commenters is that the Department should make a clear and unequivocal statement in the final rule that States retain full authority to set and enforce solvency standards for all AHPs, and comprehensive licensure requirements and oversight for non-fully-insured AHPs including benefit, rating and consumer protection standards, and laws specifying who is eligible to apply for licensure. The Department agrees that the final rule does not modify existing state authority. ERISA section 514(b)(6) gives the Department and state insurance regulators joint authority over MEWAs, including AHPs (which are a type of MEWA), to ensure appropriate regulatory and consumer protections for employers and employees relying on an AHP for healthcare coverage. The Department therefore states in this final rule that nothing in the rule changes this joint structure, or is meant to reduce the historically broad role of the States when it comes to regulating MEWAs, including AHPs.
Thus, under this framework, if an AHP established pursuant to this final rule is not fully insured, any state law that regulates insurance may apply to the MEWA to the extent that such state law is “not inconsistent” with ERISA. If an AHP is fully insured, state laws that regulate the maintenance of specified contribution and reserve levels (and that enforce those standards) may apply to the MEWA, and state insurance laws are generally saved from preemption when applied to insurance companies that sell policies to AHPs and to insurance policies that AHPs purchase to provide benefits. In addition, with respect to fully-insured AHPs, the Department's view is that ERISA section 514(b)(6) clearly enables states to subject such AHPs to licensing, registration, certification, financial reporting, examination, audit and any other requirement of State insurance law necessary to ensure compliance with the State insurance reserves, contributions and funding requirements.
Executive Order 13771, titled Reducing Regulation and Controlling Regulatory Costs, was issued on January 30, 2017. This rule is expected to be an E.O. 13771 deregulatory action, because it will expand small businesses' access to more lightly regulated and more affordable health insurance options, by removing certain restrictions on the establishment and maintenance of AHPs under ERISA.
Although the Proposed Rule did not contain a separate discussion of an effective date or applicability date for the final rule, the Department received a significant number of comments regarding the importance of properly timing implementation of the final rule. The comments supporting delay pointed to a number of challenges in moving forward with new AHPs on an expedited schedule. For example, some asserted that early applicability dates would be poor matches for state timelines for setting premium rates. According to some commenters, the annual cycle for insurance policy premium approvals supports an applicability date after January 1, 2019. According to one commenter, in many states, the critical period for 2019 pricing is March through May of 2018. As a result, the impact of this rule may or may not be factored into 2019 premiums. Similarly, some commenters suggested that many fully-insured AHPs and the largest self-insured AHPs are expected to choose to delay modifying their programs until calendar year 2020, when the implications of the rule and the rate environment is more settled and certain. Commenters supporting delay also argued that the effect of an immediate effective date may be to encourage the establishment of AHPs that enter the market (both self- and fully-insured arrangements) prematurely without the proper administrative processes necessary to avoid consumer harm (
Many commenters also noted that regulators, as well as AHPs, need time to prepare for change. For example, there will be a need to modify existing reporting requirements for AHPs and other MEWAs, including at least the
The comments also included specific suggestions. For example, some said the applicability date of the new rule needs to be delayed for no less than a year after it is published in the
The Department has determined that a prolonged delay in applicability of the final rule is not in the public interest. As noted above, the Department received many comments from individuals in immediate distress due to the unavailability of affordable healthcare coverage and expressing the challenges they have faced since the enactment of the ACA. A significant number of commenters expressed serious concerns regarding the rising cost of health insurance. Many of them were small business owners that currently do not offer health insurance to their employees and who cited ever-increasing costs as the primary reason for their inability to provide their employees and their families with affordable health coverage. Even business owners that do provide health coverage stressed that the premiums are exceedingly costly, and the increases in premiums are frequent and unsustainable. Many self-employed individuals, for example real estate agents, stated that they are forced to purchase insurance in a volatile individual insurance market, which tends to offer fewer choices at much higher costs. These business owners said they wanted access to AHPs at the earliest possible date to obtain more affordable healthcare coverage for themselves and their employees.
These concerns were also important in the Department's consideration of the request for a public hearing by some commenters who opposed the proposal. The Department was not persuaded that a public hearing is necessary or appropriate in connection with this rulemaking. A substantial and comprehensive public record has already been established through the comment process, which generated over 900 comment letters, many of which included substantial attachments and citations to reports and other data. The Department does not believe that a public hearing would meaningfully add data and information germane to the examination of the merits of the proposal or would provide substantive factual information that would assist the Department in improving the rule in material ways. Furthermore, the Department believes that it has made changes to the rule and included clarifications in this preamble that address the important issues raised by parties who requested a hearing. The Department believes that the scope and depth of the public record that has been developed also belies arguments by some that a 60 day comment period was not a sufficient period of time to provide the data needed to support their arguments against the proposal.
After careful consideration of the public comments, the Department has determined that it is important for the final rule to become effective on the earliest possible date to provide certainty regarding the Department's interpretation for affected entities, with a staged series of applicability dates for pre-existing and new AHPs to respond to implementation issues. Accordingly, the final rule is effective August 20, 2018, however see below for a discussion of the staggered applicability dates.
The Department acknowledges the issues raised about insurance rate setting processes, state regulator and DOL preparedness for oversight roles, and steps other stakeholders may need to take to revise governing structures, memberships, and benefit offerings. At the same time, the Department needs to balance these concerns against the immediate need for improved options for healthcare coverage. The Department believes that a staged applicability process is an appropriate way to respond to those concerns in light of the public demand for help. Specifically, September 1, 2018 is the applicability date for fully-insured AHPs; January 1, 2019 is the applicability date for existing self-insured AHPs that are in compliance with the Department's previous sub-regulatory guidance on bona fide groups or associations, and that choose to expand the group or association and its plan pursuant to the terms of the final rule (
The Department expects fewer oversight and operational issues for fully-insured AHPs. This is, in part, because many fully-insured AHPs already exist. Issuers have already developed products and services tailored to those plans. Application of state insurance regulations presents fewer issues because of the existing state rules that govern insurance companies and the policies they sell to employment-based group health plans. And fully-insured AHPs have traditionally been least likely to experience fraud. Allowing existing self-insured AHPs formed under the Department's pre-rule guidance next to expand consistent with the final rule similarly involves employment-based group health plans that currently exist and with respect to which state insurance regulators have had regulatory authority for many years. The Department does not believe that changes to those existing and already regulated AHPs should present immediate or acute new challenges for state regulators. Delaying the applicability of the final rule for new self-insured AHPs until nearly a year after publication of the final rule in the
The Department has a longstanding practice of providing compliance assistance to employers, plan sponsors, plan fiduciaries, other employee benefit plan officials and service providers to foster understanding and compliance with the requirements of ERISA. Consistent with that practice, the Department intends to provide affected parties with significant assistance and support to promote the efficient and effective implementation of the final rule. The Department also intends to examine the current Form M-1 for appropriate changes to address reporting and disclosure issues and other general improvements in information collection related to AHPs under the final rule. As discussed earlier in this preamble, MEWA registration requirements require plan and non-plan MEWAs to file the Form M-1 under ERISA section 101(g) and 29 CFR 2520.101-2. All AHPs under the final rule will be required to file the Form M-1 regardless of the plan size or type of funding. The Department will also be working with other federal and state regulators to prepare for the new plan structures. Groups or associations should also seek qualified legal counsel to determine whether any proposed structure or operations may create potential prohibited transactions. In that case, the group or association may apply to the Department under ERISA section 408(a) for an exemption from the prohibited transaction provisions to avoid ERISA personal liability for the prohibited transaction and civil penalty assessments.
The Department acknowledges commenters' concerns about whether it has the tools and capacity to adequately oversee an expanded AHP marketplace and protect the public from harms that have materialized in the past from fraudulent and poorly operated MEWAs, including many that were not AHPs and some that were or claimed to be AHPs. However, the Department has a long history of regulating ERISA-covered group health plans, including plan-MEWAs, and AHPs under the final rule will be in that category. Significantly, recent changes in federal law equipped the Department with new “cease and desist” authority to quickly intervene in cases when MEWAs (including AHPs) pose a risk the public. This new authority augments the criminal penalties for healthcare fraud enacted as part of HIPAA. Further, as noted elsewhere in this preamble, the States' traditional oversight and police authority over MEWAs (and AHPs) is not diminished by or because of this final rule. This decision was deliberate, in recognition by the Department of the vast expertise of the States in combating MEWA fraud and mismanagement, and is supported by the majority of public commenters. Even more so than in the past, the Department intends to coordinate and work with the States in exercising the joint oversight responsibilities conferred by section 514 of ERISA. The Department presently has written agreements in place with 34 States to foster cooperative enforcement efforts. The Department will review these agreements to make sure they continue to serve their purpose under the final rule. Further, as necessary and feasible, more agreements with other States will be put into place in concert with the delayed applicability dates in the final rule. In addition, the Department intends to review existing reporting requirements for AHPs to enhance the oversight capability of federal and State regulators. New reporting requirements would focus on capturing data to minimize the risk of unpaid claims. In concert with any new reporting requirements, the Department, if necessary, will consider imposing AHP-specific audit requirements with conditions that are designed to identify and minimize potential risks for AHP's failing to pay health claims when due.
Finally, the final rule includes a severability provision that provides that if any of the provisions in the final rule are found to be invalid or stayed pending further agency action, the remaining portions of the rule would remain operative and available for qualifying employer groups or associations. For example, a ruling by a federal court that the “working owners” provision in section 2510.3-5(e) is void will not impact the ability of an employer group or association to meet the “commonality of interest” requirement in section 2510.3-5(c) by being located in the same geographic locale.
Employee benefit plans, Pensions.
For the reasons stated in the preamble, the Department of Labor amends 29 CFR part 2510 as follows:
29 U.S.C. 1002(2), 1002(5), 1002(21), 1002(37), 1002(38), 1002(40), 1031, and 1135; Secretary of Labor's Order No. 1-2011, 77 FR 1088 (Jan. 9, 2012); Sec. 2510.3-101 also issued under sec. 102 of Reorganization Plan No. 4 of 1978, 43 FR 47713 (Oct. 17, 1978), E.O. 12108, 44 FR 1065 (Jan. 3, 1979) and 29 U.S.C. 1135 note. Sec. 2510.3-38 is also issued under sec. 1, Pub. L. 105-72, 111 Stat. 1457 (1997).
(c)
(a)
(b)
(1) The primary purpose of the group or association may be to offer and provide health coverage to its employer members and their employees; however, the group or association also must have at least one substantial business purpose unrelated to offering and providing health coverage or other employee benefits to its employer members and their employees. For purposes of satisfying the standard of this paragraph (b)(1), as a safe harbor, a substantial business purpose is considered to exist if the group or association would be a viable entity in the absence of sponsoring an employee benefit plan. For purposes of this paragraph (b)(1), a business purpose includes promoting common business interests of its members or the common economic interests in a given trade or employer community, and is not required to be a for-profit activity;
(2) Each employer member of the group or association participating in the group health plan is a person acting directly as an employer of at least one employee who is a participant covered under the plan,
(3) The group or association has a formal organizational structure with a governing body and has by-laws or other similar indications of formality,
(4) The functions and activities of the group or association are controlled by its employer members, and the group's or association's employer members that participate in the group health plan control the plan. Control must be present both in form and in substance,
(5) The employer members have a commonality of interest as described in paragraph (c) of this section,
(6)(i) The group or association does not make health coverage through the group's or association's group health plan available other than to:
(A) An employee of a current employer member of the group or association;
(B) A former employee of a current employer member of the group or association who became eligible for coverage under the group health plan when the former employee was an employee of the employer; and
(C) A beneficiary of an individual described in paragraph (b)(6)(i)(A) or (b)(6)(i)(B) of this section (
(ii) Notwithstanding paragraph (b)(6)(i)(B) of this section, coverage may not be made available to any individual (or beneficiaries of the individual) for any plan year following the plan year in which the plan determines pursuant to reasonable monitoring procedures that the individual ceases to meet the conditions in paragraph (e)(2) of this section (unless the individual again meets those conditions), except as may be required by section 601 of the Act.
(7) The group or association and health coverage offered by the group or association complies with the nondiscrimination provisions of paragraph (d) of this section.
(8) The group or association is not a health insurance issuer described in section 733(b)(2) of the Act, or owned or controlled by such a health insurance issuer or by a subsidiary or affiliate of such a health insurance issuer, other than to the extent such entities participate in the group or association in their capacity as employer members of the group or association.
(c)
(i) The employers are in the same trade, industry, line of business or profession; or
(ii) Each employer has a principal place of business in the same region that does not exceed the boundaries of a single State or a metropolitan area (even if the metropolitan area includes more than one State).
(2) In the case of a group or association that is sponsoring a group health plan under this section and that is itself an employer member of the group or association, the group or association will be deemed for purposes of paragraph (c)(1)(i) of this section to be in the same trade, industry, line of business, or profession, as applicable, as the other employer members of the group or association.
(d)
(1) The group or association must not condition employer membership in the group or association on any health factor, as defined in § 2590.702(a) of this chapter, of any individual who is or may become eligible to participate in the group health plan sponsored by the group or association.
(2) The group health plan sponsored by the group or association must comply with the rules of § 2590.702(b) of this chapter with respect to nondiscrimination in rules for eligibility for benefits, subject to paragraph (d)(4) of this section.
(3) The group health plan sponsored by the group or association must comply with the rules of § 2590.702(c) of this chapter with respect to nondiscrimination in premiums or contributions required by any participant or beneficiary for coverage under the plan, subject to paragraph (d)(4) of this section.
(4) In applying the nondiscrimination provisions of paragraphs (d)(2) and (3)
(5) The rules of this paragraph (d) are illustrated by the following examples:
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(e)
(2) The term “working owner” as used in this paragraph (e) of this section means any person who a responsible plan fiduciary reasonably determines is an individual:
(i) Who has an ownership right of any nature in a trade or business, whether incorporated or unincorporated, including a partner and other self-employed individual;
(ii) Who is earning wages or self-employment income from the trade or business for providing personal services to the trade or business; and
(iii) Who either:
(A) Works on average at least 20 hours per week or at least 80 hours per month providing personal services to the working owner's trade or business, or
(B) Has wages or self-employment income from such trade or business that at least equals the working owner's cost of coverage for participation by the working owner and any covered beneficiaries in the group health plan sponsored by the group or association in which the individual is participating.
(3) The determination under this paragraph must be made when the working owner first becomes eligible for coverage under the group health plan and continued eligibility must be periodically confirmed pursuant to reasonable monitoring procedures.
(f)
(2) This section is applicable on January 1, 2019, for any employee welfare benefit plan that is not fully insured, is in existence on June 21, 2018, meets the requirements that applied before June 21, 2018, and chooses to become an association health plan sponsored by a bona fide group or association of employers pursuant to paragraphs (b) through (e) of this section (
(3) This section is applicable on April 1, 2019, for any other employee welfare benefit plan established to be and operated as an association health plan sponsored by a bona fide group or association of employers pursuant to pursuant to paragraphs (b) through (e) of this section.
(g)
(a) Space Situational Awareness shall mean the knowledge and characterization of space objects and their operational environment to support safe, stable, and sustainable space activities.
(b) Space Traffic Management shall mean the planning, coordination, and on-orbit synchronization of activities to enhance the safety, stability, and sustainability of operations in the space environment.
(c) Orbital debris, or space debris, shall mean any human-made space object orbiting Earth that no longer serves any useful purpose.
(a) Safety, stability, and operational sustainability are foundational to space activities, including commercial, civil, and national security activities. It is a shared interest and responsibility of all spacefaring nations to create the conditions for a safe, stable, and operationally sustainable space environment.
(b) Timely and actionable SSA data and STM services are essential to space activities. Consistent with national security constraints, basic U.S. Government-derived SSA data and basic STM services should be available free of direct user fees.
(c) Orbital debris presents a growing threat to space operations. Debris mitigation guidelines, standards, and policies should be revised periodically, enforced domestically, and adopted internationally to mitigate the operational effects of orbital debris.
(d) A STM framework consisting of best practices, technical guidelines, safety standards, behavioral norms, pre-launch risk assessments, and on-orbit collision avoidance services is essential to preserve the space operational environment.
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(a) Advance SSA and STM S&T. Members of the National Space Council, or their delegees, shall coordinate, prioritize, and advocate for S&T, SSA, and STM, as appropriate, as it relates to their respective missions. They should seek opportunities to engage with the commercial sector and academia in pursuit of this goal.
(b) Mitigate the Effect of Orbital Debris on Space Activities.
(c) Encourage and Facilitate U.S. Commercial Leadership in S&T, SSA, and STM. The Secretary of Commerce, in coordination with the Secretaries of Defense and Transportation, and the NASA Administrator, shall lead
(d) Provide U.S. Government-Derived Basic SSA Data and Basic STM Services to the Public.
(e) Improve SSA Data Interoperability and Enable Greater SSA Data Sharing.
(f) Develop Space Traffic Standards and Best Practices. The Secretaries of Defense, Commerce, and Transportation, in coordination with the Secretary of State, the NASA Administrator, and the Director of National Intelligence, and in consultation with the Chairman of the FCC, shall develop space traffic standards and best practices, including technical guidelines, minimum safety standards, behavioral norms, and orbital conjunction prevention protocols related to pre-launch risk assessment and on-orbit collision avoidance support services.
(g) Prevent Unintentional Radio Frequency Interference. The Secretaries of Commerce and Transportation, in coordination with the Secretaries of State and Defense, the NASA Administrator, and the Director of National Intelligence, and in consultation with the Chairman of the FCC, shall coordinate to mitigate the risk of harmful interference and promptly address any harmful interference that may occur.
(h) Improve the U.S. Domestic Space Object Registry. The Secretary of State, in coordination with the Secretaries of Defense, Commerce, and Transportation, the NASA Administrator, and the Director of National Intelligence, and in consultation with the Chairman of the FCC, shall lead U.S. Government efforts on international engagement related to international transparency and space object registry on SSA and STM issues.
(i) Develop Policies and Regulations for Future U.S. Orbital Operations. The Secretaries of Defense, Commerce, and Transportation, in coordination with the Secretary of State, the NASA Administrator, and the Director of National Intelligence, shall regularly evaluate emerging trends in space missions to recommend revisions, as appropriate and necessary, to existing SSA and STM policies and regulations.
(b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
(d) The Secretary of Commerce is authorized and directed to publish this memorandum in the
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration |