Page Range | 31841-32060 | |
FR Document |
Page and Subject | |
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83 FR 31981 - Biweekly Notice; Applications and Amendments to Facility Operating Licenses and Combined Licenses Involving No Significant Hazards Considerations | |
83 FR 31979 - Applications and Amendments to Facility Operating Licenses and Combined Licenses Involving Proposed No Significant Hazards Considerations and Containing Sensitive Unclassified Non-Safeguards Information and Order Imposing Procedures for Access to Sensitive Unclassified Non-Safeguards Information | |
83 FR 31987 - Sunshine Act Meetings | |
83 FR 31944 - Federal Motor Carrier Safety Regulations (FMCSRs) Which May Be a Barrier to the Safe Integration of Automated Driving Systems in Commercial Vehicle Operations; Public Meeting | |
83 FR 31887 - Safety Zone; Lake Michigan, North Avenue Beach, Chicago, IL | |
83 FR 31887 - Safety Zone; Ohio Street Beach Swim Course, Chicago Harbor, Chicago, IL | |
83 FR 31887 - Safety Zones; Annual Events Requiring Safety Zones in the Captain of the Port Lake Michigan Zone-Chicago Air and Water Show | |
83 FR 31972 - Notice of Proposed Administrative Settlement Agreement and Order on Consent for De Minimis Share of Reimbursement for Removal Action for the Ector Drum Site, Odessa, Texas | |
83 FR 31971 - Proposed Information Collection Request; Comment Request; Air Emissions Reporting Requirements (Renewal); EPA ICR No. 2170.07, OMB Control No. 2060-0580 | |
83 FR 31891 - Safety Zone; Hamburg Beach Blast Fireworks Display; Lake Erie, Hamburg, NY | |
83 FR 31889 - Safety Zone; Barge PFE-LB444, San Joaquin River, Blackslough Landing, CA | |
83 FR 31968 - Announcement of the Per- and Polyfluoroalkyl Substances (PFAS) Pennsylvania Community Engagement | |
83 FR 31915 - Determination Regarding Good Neighbor Obligations for the 2008 Ozone National Ambient Air Quality Standard | |
83 FR 31939 - National Emission Standards for Hazardous Air Pollutants and New Source Performance Standards: Petroleum Refinery Sector Amendments | |
83 FR 31893 - Pyroxsulam; Pesticide Tolerances | |
83 FR 31969 - Notice of Receipt of Requests To Voluntarily Cancel Certain Pesticide Registrations and Amend Registrations To Terminate Certain Uses | |
83 FR 31975 - Notice of Proposed Reinstatement of Terminated Oil and Gas Lease WYW174754, Wyoming | |
83 FR 31976 - Notice of Proposed Reinstatement of Terminated Oil and Gas Lease WYW178259, Wyoming | |
83 FR 31975 - Notice of Proposed Reinstatement of Terminated Oil and Gas Lease WYW176517, Wyoming | |
83 FR 31951 - High Pressure Steel Cylinders From the People's Republic of China: Preliminary Results of Countervailing Duty Administrative Review; 2016 | |
83 FR 31949 - Sodium Gluconate, Gluconic Acid, and Derivative Products From the People's Republic of China: Preliminary Determination of Sales at Less Than Fair Value | |
83 FR 31953 - Chlorinated Isocyanurates From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review; 2016-2017 | |
83 FR 31975 - Notice of Proposed Reinstatement of Terminated Oil and Gas Lease WYW178348, Wyoming | |
83 FR 31976 - Notice of Proposed Reinstatement of Terminated Oil and Gas Lease WYW180628, Wyoming | |
83 FR 31976 - Notice of Proposed Reinstatement of Terminated Oil and Gas Lease WYW096788, Wyoming | |
83 FR 31974 - Notice of Proposed Reinstatement of Terminated Oil and Gas Lease WYW087880, Wyoming | |
83 FR 31977 - Notice of Proposed Reinstatement of Terminated Oil and Gas Lease WYW087867, Wyoming | |
83 FR 31977 - Certain Robotic Vacuum Cleaning Devices and Components Thereof Such as Spare Parts; Notice of Request for Statements on the Public Interest | |
83 FR 31973 - Formations of, Acquisitions by, and Mergers of Bank Holding Companies | |
83 FR 31972 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company | |
83 FR 31972 - Formations of, Acquisitions by, and Mergers of Savings and Loan Holding Companies | |
83 FR 31877 - Schedules of Controlled Substances: Temporary Placement of NM2201, 5F-AB-PINACA, 4-CN-CUMYL-BUTINACA, MMB-CHMICA and 5F-CUMYL-P7AICA Into Schedule I | |
83 FR 31945 - Fisheries of the Northeastern United States; Summer Flounder, Scup, and Black Sea Bass Fisheries; Notice of Receipt of a Petition for Rulemaking | |
83 FR 31974 - Commercial Customs Operations Advisory Committee (COAC) Charter Renewal | |
83 FR 31955 - Charter Renewal of Department of Defense Federal Advisory Committees | |
83 FR 31955 - Advisory Committee on Arlington National Cemetery; Notice of Federal Advisory Committee Meeting | |
83 FR 31965 - Sanford Energy Associates, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
83 FR 31963 - Combined Notice of Filings | |
83 FR 31965 - Combined Notice of Filings #2 | |
83 FR 31967 - Combined Notice of Filings #1 | |
83 FR 31886 - Recurring Safety Zone; Steelers Fireworks, Pittsburgh, PA | |
83 FR 31883 - Special Local Regulation; Choptank River, Cambridge, MD | |
83 FR 31896 - Ongoing Data Collection of Centrally Cleared Transactions in the U.S. Repurchase Agreement Market | |
83 FR 31973 - Submission for OMB Review; Comment Request; Child Care Development Fund (CCDF)-Reporting Improper Payments-Instructions for States | |
83 FR 31978 - Notice of Information Collection | |
83 FR 31990 - Meeting of the Regional Resource Stewardship Council | |
83 FR 31886 - Drawbridge Operation Regulation; New Jersey Intracoastal Waterway (NJICW), Atlantic City, NJ | |
83 FR 31980 - Southern Nuclear Operating Company, Inc.; Vogtle Electric Generating Plant, Units 3 and 4, Class 1E Motor-Operated Valve Terminal Voltage Testing | |
83 FR 31947 - Notice of Public Meetings of the Arkansas Advisory Committee to the U.S. Commission on Civil Rights | |
83 FR 31979 - Program-Specific Guidance About Possession Licenses for Manufacturing and Distribution, Program-Specific Guidance About Well Logging, Tracer, and Field Flood Study Licenses, and Program-Specific Guidance About Possession Licenses for Production of Radioactive Material Using an Accelerator | |
83 FR 31947 - Proposed Information Collection; Comment Request; Spatial, Address, and Imagery Data (SAID) Program | |
83 FR 31911 - Airworthiness Directives; Airbus SAS Airplanes | |
83 FR 31955 - Applications for New Awards; Educational Technology, Media, and Materials for Individuals With Disabilities-Center on Technology Systems in Local Educational Agencies | |
83 FR 31990 - Minority Depository Institutions Advisory Committee | |
83 FR 31987 - Agency Information Collection Activities: Proposed Request and Comment Request | |
83 FR 31855 - Establishment of Canadian Area Navigation (RNAV) Route T-705; Northeastern United States | |
83 FR 31857 - Amendment of Class D Airspace and Class E Airspace; Wrightstown, PA | |
83 FR 31853 - Amendment of Class D Airspace and Class E Airspace; Aberdeen, MD | |
83 FR 31854 - Establishment of Class E Airspace; Ellijay, GA | |
83 FR 31913 - Special Local Regulation; Carolina Boat Bash, Little River Inlet, Little River, SC | |
83 FR 31841 - Designation of Product Categories for Federal Procurement | |
83 FR 32024 - Renewable Fuel Standard Program: Standards for 2019 and Biomass-Based Diesel Volume for 2020 | |
83 FR 31859 - Investment Company Liquidity Disclosure | |
83 FR 31992 - Smaller Reporting Company Definition | |
83 FR 31981 - State of Wyoming: NRC Staff Assessment of a Proposed Agreement Between the Nuclear Regulatory Commission and the State of Wyoming | |
83 FR 31850 - Airworthiness Directives; Piper Aircraft, Inc. |
Procurement and Property Management Office, Agriculture Department
Census Bureau
International Trade Administration
National Oceanic and Atmospheric Administration
Army Department
Federal Energy Regulatory Commission
Children and Families Administration
Coast Guard
U.S. Customs and Border Protection
Land Management Bureau
Drug Enforcement Administration
Federal Aviation Administration
Federal Motor Carrier Safety Administration
Comptroller of the Currency
Office of Financial Research
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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Office of Procurement and Property Management, USDA.
Final rule.
The U.S. Department of Agriculture (USDA) is amending the Guidelines for Designating Biobased Products for Federal Procurement to add 12 sections that designate product categories within which biobased products will be afforded Federal procurement preference by Federal agencies and their contractors.
This rule is effective August 9, 2018.
Karen Zhang, USDA, Office of Procurement and Property Management, 1400 Independence Ave. SW, Washington, DC 20250; email:
The information presented in this preamble is organized as follows:
These product categories are designated under the authority of section 9002 of the Farm Security and Rural Investment Act of 2002 (the 2002 Farm Bill), as amended by the Food, Conservation, and Energy Act of 2008 (the 2008 Farm Bill), and further amended by the Agricultural Act of 2014 (the 2014 Farm Bill), 7 U.S.C. 8102. (Section 9002 of the 2002 Farm Bill, as amended by the 2008 and the 2014 Farm Bills, is referred to in this document as “section 9002”.)
As part of the BioPreferred Program, USDA published, on January 13, 2017, a proposed rule in the
The term “product category” is used as a generic term in the designation process to mean a grouping of specific products that perform a similar function. As originally finalized, the Guidelines included provisions for the designation of product categories that were composed of finished, consumer products such as mobile equipment hydraulic fluids, penetrating lubricants, or hand cleaners and sanitizers.
The 2008 and 2014 Farm Bills directed USDA to expand the scope of the Guidelines to include the designation of product categories composed of intermediate ingredients and feedstock materials. Specifically, the 2008 Farm Bill stated that USDA shall “designate those intermediate ingredients and feedstocks that are or can be used to produce items that will be subject” to the Federal preferred procurement program. The term “intermediate ingredient and feedstock” is defined in the Farm Bill as “a material or compound made in whole or in significant part from biological products, including renewable agricultural materials (including plant, animal, and marine materials) or forestry materials, that are subsequently used to make a more complex compound or product.” The term “intermediates” is used in the titles of the product categories being designated today to distinguish these categories from the finished, consumer products previously designated by USDA. Although the Federal government does not typically purchase large quantities of intermediate ingredients and feedstock materials, designating such materials represents a means to identify and include finished products made from such designated materials in the Federal preferred procurement program. In the proposed rule, USDA proposed designating the following 12 product categories for the preferred procurement program: Intermediates—Plastic Resins; Intermediates—Chemicals; Intermediates—Paint and Coating Components; Intermediates—Textile Processing Materials; Intermediates—Foams; Intermediates—Fibers and Fabrics; Intermediates—Lubricant Components; Intermediates—Binders; Intermediates—Cleaner Components; Intermediates—Personal Care Product Components; Intermediates—Oils, Fats, and Waxes; and Intermediates—Rubber Materials.
This final rule designates the proposed product categories within which biobased products will be afforded Federal procurement preference. USDA has determined that each of the product categories being designated under this rulemaking meets the necessary statutory requirements; that they are being produced with biobased products; and that their procurement will carry out the following objectives of section 9002: to improve demand for biobased products; to spur development of the industrial base through value-added agricultural processing and manufacturing in rural communities; and to enhance the Nation's energy security by substituting
When USDA designates by rulemaking a product category for preferred procurement under the BioPreferred Program, manufacturers of all products under the umbrella of that product category that meet the requirements to qualify for preferred procurement can claim that status for their products. To qualify for preferred procurement, a product must be within a designated product category and must contain at least the minimum biobased content established for the designated product category. With the designation of these specific product categories, USDA invites the manufacturers and vendors of qualifying products to provide information on the product, contacts, and performance testing for posting on its BioPreferred website,
USDA solicited comments on the proposed rule for 90 days ending on April 13, 2017. USDA received eight comments by that date. Four of the comments were from manufacturers of biobased products, and four were from trade associations. The comments are presented below, along with USDA's responses, and are shown under the product categories to which they apply.
USDA also had to consider the potentially conflicting goals of keeping the proposed number of intermediate
Another significant factor that affected USDA's decision-making when creating the intermediate ingredient product categories was the availability of product data. USDA created more specific product categories where data were available to support creating those categories. For example, USDA had data supporting the designation of categories specifically for biobased ingredients that are used in the manufacturing of finished products in the textiles, lubricants, cleaners, and personal care industries. Thus, the decision was made to go with a broad definition in hopes that most, if not all, biobased chemicals that are used as intermediate ingredients would be covered.
Finally, USDA points out that the BioPreferred Program has traditionally created product categories that are defined by their function and intends to continue to do so when creating product categories for the finished products that are made from the intermediate ingredients being designated in this rulemaking. USDA has taken the approach that for the designation of intermediate ingredients, however, the designation of broadly defined categories is more reasonable and more inclusive than attempting to create a very large number of function-specific categories.
Further, the commenter notes that the development of biobased products and renewable chemicals is occurring at a rapid pace. Thus, the commenter encourages USDA to explore opportunities to streamline the process of designating new product categories.
The commenter also supports the use of subcategories at the finished product level and not at the intermediate ingredient or feedstock material level. Further, the commenter believes USDA should consider the need to create subcategories to allow for variations in the minimum biobased content of different end use products. When setting the minimum biobased content for finished products, the commenter encourages USDA to verify that there are products within a given category or subcategory that are commercially available.
The commenter believes that the designation of intermediate categories will have a positive impact on many small businesses that are now using or would like to use biobased materials in their finished products.
The commenter also believes that the designation of intermediate ingredients and feedstocks will allow small businesses easy access to useable information on the types and categories of biobased materials that are available for use in finished products. The commenter states that the use of biobased materials is one way for small businesses to distinguish themselves in both the government and private sector marketplaces.
The commenter also supports and encourages USDA to continue and expand outreach efforts as stated in the
USDA appreciates the support for the approach of defining product categories at the finished product level as opposed to the intermediate ingredient level. As discussed earlier, USDA believes that broad definitions of the intermediate ingredient product categories and, subsequently, more specific functional definitions at the finished product category level is a reasonable approach.
USDA also appreciates the commenter's statements regarding the positive impact of the BioPreferred
USDA disagrees with the commenter's suggestion to revise the proposed definition so that it includes finished product adhesives and glues. These types of products will be included in the upcoming rulemaking that designates finished products made from designated intermediate ingredients.
Another commenter believes that it is important to have a product category designation for FSC code 4253 Hazardous Material Spill Containment and Clean-up Equipment.
After consideration of the public comments received in response to the proposed rule, USDA made several changes in the final rule. These changes are summarized below.
In the final rule, USDA has revised the definition of the categories intermediates—plastic resins, intermediates—chemicals, intermediates—paint and coating components, and intermediates—binders as explained in the following paragraph. These changes were made to clarify or add examples of intermediates that can be included in each of these categories.
The definition for the intermediate—plastic resins category has been revised to include the term “polymers.” The definition for the intermediates—chemicals category has been revised to list additional materials such as viscosity reducers, rheology modifiers, adhesion agents, polyols, and polymers. Additional examples of paint and coating components, such as humectants, open time additives, and polymers, have been added to the definition of the intermediates—paint and coating components category. The intermediates—binders category definition has been revised to expand on the types of chemicals that typically make up binders. Additionally, the definition has been expanded to include examples of materials that binders can be used to formulate. The definition for this category has been revised to include the phrase “binders are generally polymers or polymer precursors (such as epoxies) and include the polymeric materials used to formulate coatings, adhesives, sealants and elastomers.”
Executive Order 12866, as supplemented by Executive Order 13563, requires agencies to determine whether a regulatory action is “significant.” The Order defines a “significant regulatory action” as one that is likely to result in a rule that may: “(1) Have an annual effect on the economy of $100 million or more or adversely affect, in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order.”
This final rule has been determined by the Office of Management and Budget to be not significant for purposes of Executive Order 12866. We are not able to quantify the annual economic effect associated with this final rule. As discussed in the preamble to the proposed rulemaking, USDA made extensive efforts to obtain information on the Federal agencies' usage within the 12 designated product categories. These efforts were largely unsuccessful. Therefore, attempts to determine the economic impacts of this final rule would require estimation of the anticipated market penetration of biobased products based upon many assumptions. In addition, because agencies have the option of not purchasing biobased products within designated product categories if price is “unreasonable,” the product is not readily available, or the product does not demonstrate necessary performance characteristics, certain assumptions may not be valid. While facing these quantitative challenges, USDA relied upon a qualitative assessment to determine the impacts of this final rule. Consideration was also given to the fact that agencies may choose not to procure designated items due to unreasonable price.
This final rule is expected to have both positive and negative impacts to individual businesses, including small businesses. USDA anticipates that the biobased preferred procurement program will provide additional opportunities for businesses and manufacturers to begin supplying products under the designated biobased product categories to Federal agencies and their contractors. However, other businesses and manufacturers that supply only non-qualifying products and do not offer biobased alternatives may experience a decrease in demand from Federal agencies and their contractors. USDA is unable to determine the number of businesses, including small businesses that may be adversely affected by this final rule. The final rule, however, will not affect existing purchase orders, nor will it preclude businesses from modifying their product lines to meet new requirements for designated biobased products. Because the extent to which procuring agencies will find the performance, availability and/or price of biobased products acceptable is unknown, it is impossible to quantify the actual economic effect of the rule.
The designation of these 12 product categories provides the benefits outlined in the objectives of section 9002: to increase domestic demand for many agricultural commodities that can serve as feedstocks for production of biobased products, and to spur development of the industrial base through value-added agricultural processing and manufacturing in rural communities. On a national and regional level, this final rule can result in expanding and strengthening markets for biobased materials used in these product categories.
Like the benefits, the costs of this final rule have not been quantified. Two types of costs are involved: Costs to producers of products that will compete with the preferred products and costs to Federal agencies to provide procurement preference for the preferred products. Producers of competing products may face a decrease in demand for their products to the extent Federal agencies refrain from purchasing their products. However, it is not known to what extent this may occur. Pre-award procurement costs for Federal agencies may rise minimally as the contracting officials conduct market research to evaluate the performance, availability and price reasonableness of preferred products before making a purchase.
The RFA, 5 U.S.C. 601-602, 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.
USDA evaluated the potential impacts of its designation of these product categories to determine whether its actions would have a significant impact on a substantial number of small entities. Because the preferred procurement program established under section 9002 applies only to Federal agencies and their contractors, small governmental (city, county, etc.) agencies are not affected. Thus, the final rule will not have a significant economic impact on small governmental jurisdictions.
USDA anticipates that this program will affect entities, both large and small, that manufacture or sell biobased products. For example, the designation of product categories for preferred procurement will provide additional opportunities for businesses to manufacture and sell biobased products to Federal agencies and their contractors. Similar opportunities will be provided for entities that supply biobased materials to manufacturers.
The intent of section 9002 is largely to stimulate the production of new
The Federal preferred procurement program may decrease opportunities for businesses that manufacture or sell non-biobased products or provide components for the manufacturing of such products. Most manufacturers of non-biobased products within the product categories being designated for Federal preferred procurement in this rule are expected to be included under the following NAICS codes: 324191 (petroleum lubricating oil and grease manufacturing), 325320 (pesticide and other agricultural chemicals manufacturing), 325411 (medicinal and botanical manufacturing), 325412 (pharmaceutical preparation manufacturing), 325510 (paint and coating manufacturing), 325612 (polish and other sanitation goods manufacturing), and 325620 (toilet preparation manufacturing). USDA obtained information on these seven NAICS categories from the U.S. Census Bureau's Economic Census database. USDA found that the Economic Census reports about 4,756 companies within these 7 NAICS categories and that these companies own a total of about 5,374 establishments. Thus, the average number of establishments per company is about 1.13. The Census data also reported that of the 5,374 individual establishments, about 5,228 (97.3 percent) have fewer than 500 employees. USDA also found that the overall average number of employees per company among these industries is about 92 and that the pharmaceutical preparation manufacturing segment (with an average of about 250) is the only segment reporting an average of more than 100 employees per company. Thus, nearly all of the businesses meet the Small Business Administration's definition of a small business (less than 500 employees, in most NAICS categories).
USDA does not have data on the potential adverse impacts on manufacturers of non-biobased products within the product categories being designated, but believes that the impact will not be significant. Most of the product categories being designated in this rulemaking are not typical consumer products widely used by the general public and by industrial/commercial establishments that are not subject to this rulemaking. Thus, USDA believes that the number of small businesses manufacturing non-biobased products within the product categories being designated and selling significant quantities of those products to government agencies affected by this rulemaking will be relatively low. Also, this final rule will not affect existing purchase orders and it will not preclude procuring agencies from continuing to purchase non-biobased products when biobased products do not meet the availability, performance, or reasonable price criteria. This final rule will also not preclude businesses from modifying their product lines to meet new specifications or solicitation requirements for these products containing biobased materials.
After considering the economic impacts of this final rule on small entities, USDA certifies that this action will not have a significant economic impact on a substantial number of small entities.
While not a factor relevant to determining whether the final rule will have a significant impact for RFA purposes, USDA has concluded that the effect of the rule will be to provide positive opportunities to businesses engaged in the manufacture of these biobased products. Purchase and use of these biobased products by procuring agencies increase demand for these products and result in private sector development of new technologies, creating business and employment opportunities that enhance local, regional, and national economies.
This final rule has been reviewed in accordance with Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights, and does not contain policies that would have implications for these rights.
This final rule has been reviewed in accordance with Executive Order 12988, Civil Justice Reform. This rule does not preempt State or local laws, is not intended to have retroactive effect, and does not involve administrative appeals.
This final rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. Provisions of this final rule will not have a substantial direct effect on States or their political subdivisions or on the distribution of power and responsibilities among the various government levels.
This final rule contains no Federal mandates under the regulatory provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538, for State, local, and tribal governments, or the private sector. Therefore, a statement under section 202 of UMRA is not required.
For the reasons set forth in the Final Rule Related Notice for 7 CFR part 3015, subpart V (48 FR 29115, June 24, 1983), this program is excluded from the scope of Executive Order 12372, which requires intergovernmental consultation with State and local officials. This program does not directly affect State and local governments.
This final rule does not significantly or uniquely affect “one or more Indian tribes . . . the relationship between the Federal Government and Indian tribes, or . . . the distribution of power and responsibilities between the Federal Government and Indian tribes.” Thus, no further action is required under Executive Order 13175.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 through 3520), the information collection under this final rule is currently approved under OMB control number 0503-0011.
USDA is committed to compliance with the E-Government Act, which requires Government agencies, in
The Congressional Review Act, 5 U.S.C. 801
Biobased products, Procurement.
For the reasons stated in the preamble, the Department of Agriculture is amending 7 CFR chapter XXXII as follows:
7 U.S.C. 8102.
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Federal Aviation Administration (FAA), DOT.
Final rule; request for comments.
We are adopting a new airworthiness directive (AD) for certain Piper Aircraft, Inc. (Piper) Models PA-46-600TP (M600) airplanes. This AD requires inserting temporary airspeed limitations into the pilot's operating handbook, installing a temporary placard, inspecting rivets on the cockpit canopy above the left and right cockpit side windows, and installing a repair kit based on the findings of the rivet inspection. This AD was prompted by a report of undersized fasteners installed during manufacturing. We are issuing this AD to address the unsafe condition on these products.
This AD is effective July 25, 2018.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of July 25, 2018.
We must receive comments on this AD by August 24, 2018.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this final rule, contact Piper Aircraft, Inc., 2926 Piper Drive, Vero Beach, Florida 32960; telephone: (772) 567-4361; internet:
You may examine the AD docket on the internet at
Dan McCully, Aerospace Engineer, FAA, Atlanta ACO Branch, 1701 Columbia Avenue, College Park, Georgia 30337; telephone: (404) 474-5548; fax: (404) 474-5606; email:
We received a report from Piper that some rivets installed through the fuselage skin at the cockpit area during manufacture are below the minimum required strength on certain Model PA-46-600TP (M600) airplanes. This condition, if not corrected, could result in failure of the skin joint resulting in loss of pressurization or fuselage structural failure. We are issuing this AD to correct the unsafe condition on these products.
We reviewed Piper Aircraft, Inc. Service Bulletin No. 1318B, dated June 7, 2018. The service bulletin describes procedures for incorporating temporary airspeed limitations into the pilot's operating handbook (POH) and fabricating and installing an airspeed limitations placard on the airplane until an inspection is completed and a minimum of 16 specific rivets are replaced. The service bulletin also describes procedures for the inspection of the rivets on the cockpit canopy above the left and right cockpit side window and the replacement of the rivets. This service information is reasonably available because the
We are issuing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
This AD requires inserting temporary airspeed limitations into the POH, installing a temporary placard with the airspeed limitations in the cockpit, inspecting the rivets on the cockpit canopy above the left and right cockpit side windows, and installing a repair kit based on the findings of the inspection.
An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because undersized and understrength rivets through the fuselage skin at the cockpit area could result in failure of the skin joint, which could result in loss of pressurization or fuselage structural failure. Therefore, we find good cause that notice and opportunity for prior public comment are impracticable. In addition, for the reason stated above, we find that good cause exists for making this amendment effective in less than 30 days.
This AD is a final rule that involves requirements affecting flight safety and was not preceded by notice and an opportunity for public comment. However, we invite you to send any written data, views, or arguments about this final rule. Send your comments to an address listed under the
We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this final rule. We will consider all comments received by the closing date and may amend this final rule because of those comments.
We will post all comments we receive, without change, to
We estimate that this AD affects 31 airplanes, of U.S. registry.
We estimate the following costs to comply with this AD:
We estimate the following costs to do any necessary replacements that would be required based on the results of the inspection. Each airplane would require one of the kits on each side based on the inspection. We have presented what the cost on U.S. operators would be for each kit on both sides even though each airplane would have one of the two kits on each side and could have different kits on each side. This would make the total cost on U.S. operators significantly less, but we have no way of determining how many would require each kit.
According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has
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 25, 2018.
None.
This AD applies to Piper Aircraft, Inc. (Piper) Model PA-46-600TP (M600) airplanes, serial numbers 4698004 through 4698041, certificated in any category.
Joint Aircraft System Component (JASC)/Air Transport Association (ATA) of America Code 5330, Fuselage Skin.
This AD was prompted by a report from Piper of rivets installed through the fuselage skin at the cockpit area during manufacture that are below the minimum required strength. We are issuing this AD to prevent failure of the skin joint, which could result in loss of pressurization or fuselage structural failure.
Comply with this AD within the compliance times specified, unless already done.
(1) Before further flight after July 25, 2018 (the effective date of this AD), insert the temporary airspeed limitations page into the pilot's operating handbook (POH), following the instructions in Part 1 of Piper Aircraft, Inc. Service Bulletin (SB) No. 1318B, dated June 7, 2018.
(2) The insertion of the temporary operating limitations page into the POH may be performed by the owner/operator (pilot) holding at least a private pilot certificate and must be entered into the airplane records showing compliance with paragraph (g) of this AD in accordance with 14 CFR 43.9(a)(1) through (4) and 14 CFR 91.417(a)(2)(v). The record must be maintained as required by 14 CFR 91.417, 121.380, or 135.439.
(1) Before further flight after July 25, 2018 (the effective date of this AD), install onto the cockpit instrument panel Placard—Flight Limitations, Piper P/N 46G110013-701, following the instructions in Part 1, paragraph 2.a. of Piper Aircraft, Inc. Service Bulletin (SB) No. 1318B, dated June 7, 2018; or fabricate a placard from locally sourced materials following the instructions in Part 1, paragraph 2.a.1 and 2.a.2 of Piper Aircraft, Inc. Service Bulletin (SB) No. 1318B, dated June 7, 2018.
(2) This action may be performed by the owner/operator (pilot) holding at least a private pilot certificate and must be entered into the aircraft records showing compliance with this AD in accordance with 14 CFR 43.9(a)(1) through (4) and 14 CFR 91.417(a)(2)(v). The record must be maintained as required by 14 CFR 91.417, 121.380, or 135.439.
(1) At the next inspection after July 25, 2018 (the effective date of this AD), but no later than the next 100 hours time-in-service (TIS) after July 25, 2018 (the effective date of this AD), inspect the rivets at the canopy area above both cockpit side windows, determine their size, and replace with either Rivet Replacement Kit Piper part number (P/N) 88623-701, Revision A or Rivet Replacement Kit Piper P/N 88624-701, Revision A, as applicable, following Part II of the instructions in Piper Aircraft, Inc. Service Bulletin (SB) No. 1318B, dated June 7, 2018.
(2) After the rivets have been replaced following the requirement in paragraph (i)(1) of this AD, the temporary airspeed limitations required in paragraph (g) and (h) of this AD are no longer in effect, and you should remove the temporary airspeed limitations page inserted into the POH that was required for compliance with paragraph (g) of this AD, and the temporary placard required for compliance with paragraph (h) of this AD, and update aircraft records showing compliance with this AD in accordance with 14 CFR 43.9(a)(1) through (4) and 14 CFR 91.417(a)(2)(v). The record must be maintained as required by 14 CFR 91.417, 121.380, or 135.439.
This AD allows credit for doing the actions required in paragraphs (g) and (i) of this AD using Piper Aircraft, Inc. SB No. 1318, dated December 20, 2017; or Piper Aircraft, Inc. SB No. 1318A, dated March 6, 2018, if done before the effective date of this AD.
A special flight permit is allowed per 14 CFR 39.23 with the following limitations: No special flight permit is required for the POH insertion. A one-time special flight with fuel stops is permitted to the Piper service facility for the inspection and replacement. Maximum operating speed (V
(1) The Manager, Atlanta 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 (m) 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.
(3) AMOCs approved for AD 2018-02-05 are not approved as AMOCs for the corresponding provisions of this AD.
(4) For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (l)(4)(i) and (ii) of this AD apply.
(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with this AD. An AMOC is required for any deviations to RC steps, including substeps and identified figures.
(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.
For more information about this AD, contact Dan McCully, Aerospace Engineer, FAA, Atlanta ACO Branch, 1701 Columbia Avenue, College Park, Georgia 30337; telephone: (404) 474-5548; fax: (404) 474-5606; 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) Piper Aircraft, Inc. Service Bulletin (SB) No. 1318B, dated June 7, 2018.
(ii) Reserved.
(3) For Piper Aircraft, Inc. service information identified in this AD, contact Piper Aircraft, Inc., 2926 Piper Drive, Vero Beach, FL 32960; telephone: (772) 567-4361; internet:
(4) You may view this service information at FAA, Policy and Innovation Division, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148.
(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:
Federal Aviation Administration (FAA), DOT.
Final rule.
This amends Class D airspace, Class E airspace designated as an extension to a Class D surface area, and Class E airspace area extending upward from 700 feet or more above the surface at Phillips Army Air Field (AAF), Aberdeen, MD. This action accommodates airspace reconfiguration due to the decommissioning of Aberdeen non-directional radio beacon (NDB), and cancellation of the NDB approaches. Controlled airspace is necessary for the safety and management of instrument flight rules (IFR) operations at this airport. This action also updates the geographic coordinates of the airport, and replaces the outdated term Airport/Facility Directory with the term Chart Supplement in the legal descriptions of associated Class D and E airspace.
Effective 0901 UTC, September 13, 2018. The Director of the Federal Register approves this incorporation by reference action under title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.11 and publication of conforming amendments.
FAA Order 7400.11B, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
John Fornito, Operations Support Group, Eastern Service Center, Federal Aviation Administration, 1701 Columbia Ave., College Park, GA 30337; telephone (404) 305-6364.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends Class D and Class E airspace at Phillips AAF, Aberdeen, MD, to support IFR operations at the airport.
The FAA published a notice of proposed rulemaking in the
Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.
Subsequent to publication, the FAA found the geographic coordinates for Phillips AAF were incorrect. This action corrects that error.
Class D and E airspace designations are published in paragraph 5000, 6004, and 6005, respectively, of FAA Order 7400.11B dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR part 71.1. The Class D and E airspace designations listed in this document will be published subsequently in the Order.
This document amends FAA Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2017. FAA Order 7400.11B is publicly available as listed in the
This amendment to Title 14, Code of Federal Regulations (14 CFR) amends part 71 by:
Amending Class D airspace at Phillips AAF, Aberdeen, MD, by updating the geographic coordinates of the airfield; and
Amending Class E airspace designated as an extension to a Class D surface area to within a 4.4-mile radius of Phillips AAF, and within 2 miles each side of the 028° bearing from Phillips AAF, extending from the 4.4-mile radius to 9 miles northeast of the airport. The northeast extension from the Aberdeen NDB is removed due to the
The geographic coordinates of Phillips AAF are adjusted in the associated airspace areas to be in concert with the FAA's aeronautical database. These changes enhance the safety and management of IFR operations at the airport.
An editorial change is made removing the city from the airport name to comply with a change to FAA Order 7400.2L, Procedures for Handling Airspace Matters, in the Class E airspace areas.
Also, an editorial change is made replacing the outdated term Airport/Facility Directory with the term Chart Supplement in the associated Class D and E airspace legal descriptions.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from the surface to and including 2,600 feet MSL within a 4.4-mile radius of Phillips AAF; excluding that airspace in Restricted Area R-4001A when it is in effect. This Class D airspace area is effective during the specific dates and times established in advance by a Notice to Airmen. The specific date and time will thereafter be continuously published in the Chart Supplement.
That airspace extending upward from the surface within 2 miles each side of the 028° bearing from Phillips AAF, extending from the 4.4-mile radius of the airport to 9 miles northeast of the airport; excluding that airspace in Restricted Area R-4001A when it is in effect. This Class E airspace area is effective during the specific dates and times established in advance by a Notice to Airmen. The specific date and time will thereafter be continuously published in the Chart Supplement.
That airspace extending upward from 700 feet above the surface within a 6.7-mile radius of Phillips AAF and within an 8.3-mile radius of Phillips AAF extending clockwise from the 260° bearing to the 030° bearing from the airport, excluding the airspace in Restricted Areas R-4001A and R-4001B when they are in effect.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action establishes Class E airspace extending upward from 700 feet above the surface at Ellijay, GA, to accommodate new area navigation (RNAV) global positioning system (GPS) standard instrument approach procedures serving Gilmer County Airport. Controlled airspace is necessary for the safety and management of instrument flight rules (IFR) operations at this airport.
Effective 0901 UTC, September 13, 2018. The Director of the Federal Register approves this incorporation by reference action under title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.11 and publication of conforming amendments.
FAA Order 7400.11B, Airspace Designations and Reporting Points, and subsequent amendments can be viewed on line at
FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
John Fornito, Operations Support Group,
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This proposed rulemaking is promulgated under the authority described in Subtitle VII, Part, A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes Class E airspace at Gilmer County Airport, Ellijay, GA, to support IFR operations in standard instrument approach procedures at this airport.
The FAA published a notice of proposed rulemaking in the
Class E airspace designations are published in paragraph 6005 of FAA Order 7400.11B dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR part 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.
This document amends FAA Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2017. FAA Order 7400.11B is publicly available as listed in the
This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 establishes Class E airspace extending upward from 700 feet above the surface within a 7.3-mile radius of Gilmer County Airport, Ellijay, GA providing the controlled airspace required to support the new RNAV (GPS) standard instrument approach procedures for the airport. These changes are necessary for continued safety and management of IFR operations at the airport.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 7.3-mile radius of Gilmer County Airport.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action establishes Canadian area navigation (RNAV) route T-705 in the Northeastern United States (U.S.) by extending the route into U.S. airspace. The FAA is taking this action to expand the availability of RNAV routing and fill a gap in routing in northeastern New York that resulted from the decommissioning of the Plattsburgh, NY, VHF Omnidirectional Range Tactical Air Navigation (VORTAC).
Effective date 0901 UTC, September 13, 2018. The Director of the Federal Register approves this incorporation by reference action under Title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.11 and publication of conforming amendments.
FAA Order 7400.11B, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
Paul Gallant, Airspace Policy Group, Office of Airspace Services, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591; telephone: (202) 267-8783.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it modifies the National Airspace System route structure as necessary to preserve the safe and efficient flow of air traffic.
The FAA published a notice of proposed rulemaking in the
Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal. Two comments were received; both supported the proposal.
This document amends FAA Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2017. FAA Order 7400.11B is publicly available as listed in the
The FAA is amending Title 14, Code of Federal Regulations (14 CFR), part 71 by establishing Canadian RNAV route T-705 in the northeastern U.S. by extending the route into U.S. airspace. T-705 currently extends between the IKNAR, Canada, WP, located approximately 90 nautical miles (NM) north of Montreal, Canada, and the DUNUP, Canada, WP, located approximately 25 NM southeast of Montreal. This action extends T-705 from the DUNUP, Canada, WP through the EBDOT, Canada WP, then into U.S. airspace via the LATTS, NY, and PBERG, NY, WPs. From the PBERG WP, the route proceeds to the RIGID, NY, fix, and from that point, it overlies VOR Federal airway V-196 to the Utica, NY, VORTAC. The amended T-705 provides continuous RNAV routing between Utica, NY, and Montreal, Canada, and points north of Montreal to the IKNAR, Canada, WP.
Canadian area navigation routes that extend into United States airspace are published in paragraph 6013 of FAA Order 7400.11B, dated August 3, 2017 and effective September 15, 2017, which is incorporated by reference in 14 CFR 71.1. The area navigation route listed in this document will be subsequently published in the Order.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action of establishing Canadian RNAV route T-705 in the U.S. qualifies for categorical exclusion under the National Environmental Policy Act and its implementing regulations at 40 CFR part 1500, and in accordance with FAA Order 1050.1F, Environmental Impacts: Policies and Procedures, Paragraph 5-6.5a, which categorically excludes from further environmental impact review rulemaking actions that designate or modify classes of airspace areas, airways, routes, and reporting points (see 14 CFR part 71, Designation of Class A, B, C, D, and E Airspace Areas; Air Traffic Service Routes; and Reporting Points). As such, this action is not expected to cause any potentially significant environmental impacts. In accordance with FAA Order 1050.1F, paragraph 5-2 regarding Extraordinary Circumstances, the FAA has reviewed this action for factors and circumstances in which a normally categorically excluded action may have a significant environmental impact requiring further analysis. The FAA determined that no extraordinary circumstances exist that warrant preparation of an environmental assessment or environmental impact study.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
Excluding the airspace within Canada.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action amends Class D airspace, Class E airspace designated as an extension to a Class D surface area, and Class E airspace extending upward from 700 feet above the surface by updating the airport name to McGuire Field (Joint Base McGuire-Dix-Lakehurst). This action also amends Class E airspace extending upward from 700 feet above the surface in Wrightstown, NJ, by updating the name and geographic coordinates of Ocean County Airport (formerly Robert J. Miller Airpark, Toms River, NJ). Also, an editorial change is made where necessary, removing the city from the airport name in the airspace designation. Controlled airspace is necessary for the safety and management of instrument flight rules (IFR) operations in the area. This action also updates the geographic coordinates of the Lakehurst (Navy) TACAN and Colts Neck VOR/DME.
Effective 0901 UTC, September 13, 2018. The Director of the Federal Register approves this incorporation by reference action under title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.11 and publication of conforming amendments.
FAA Order 7400.11B, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
John Fornito, Operations Support Group, Eastern Service Center, Federal Aviation Administration, 1701 Columbia Ave, College Park, GA 30337; telephone (404) 305-6364.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends Class D and Class E airspace in Wrightstown, NJ to support IFR operations in the area.
The FAA published a notice of proposed rulemaking in the
Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.
Class D and E airspace designations are published in paragraph 5000, 6004, and 6005, respectively, of FAA Order 7400.11B dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR part 71.1. The Class D and E airspace designations listed in this document will be published subsequently in the Order.
This document amends FAA Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2016. FAA Order 7400.11B is publicly available as
This amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 amends Class D airspace, Class E airspace designated as an extension to a Class D surface area, and Class E airspace extending upward from 700 feet or more above the surface by updating the names of McGuire Field (Joint Base McGuire-Dix-Lakehurst), (formerly McGuire AFB), Wrightstown, NJ, and Ocean County Airport, (formerly Robert J. Miller Airpark, Toms River, NJ).
The geographic coordinates of the Ocean County Airport, Lakehurst (Navy) TACAN, and Colts Neck VOR/DME also are adjusted in the associated airspace listed above to coincide with the FAA's aeronautical database. These changes enhance the safety and management of IFR operations in the area.
An editorial change is also made to the Class E airspace extending upward from 700 feet above the surface by removing the city from the airport names listed to comply with a change to FAA Order 7400.2L, Procedures for Handling Airspace Matters, and removing the exclusionary language from the airspace description.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from the surface to and including 2,600 feet MSL within a 4.5-mile radius of McGuire Field (Joint Base McGuire-Dix-Lakehurst).
That airspace extending upward from the surface within 1.8 miles each side of the McGuire VORTAC 350° radial extending from the 4.5-mile radius of McGuire Field (Joint Base McGuire-Dix-Lakehurst), to 6.1 miles north of the VORTAC and within 1.8 miles each side of the McGuire VORTAC 051° radial extending from the 4.5-mile radius of the airport to 6.1 miles northeast of the VORTAC and within 1.8 miles each side of the McGuire VORTAC 180° radial extending from the 4.5-mile radius of the airport to 5.2 miles south of the VORTAC, and within 1.8 miles each side of the McGuire Field (Joint Base McGuire-Dix-Lakehurst), ILS localizer southwest course extending from the 4.5-mile radius of the airport to 7 miles southwest of the localizer.
That airspace extending upward from 700 feet above the surface within a 6.4-mile radius of Lakewood Airport, and within a 10.5-mile radius of McGuire Field (Joint Base McGuire-Dix-Lakehurst), and within an 11.3-mile radius of the Lakehurst (Navy) TACAN extending clockwise from the TACAN 310° radial to the 148° radial and within 4.4 miles each side of the Coyle VORTAC 031° radial extending from the VORTAC to 11.3 miles northeast, and within 2.6 miles southwest and 4.4 miles northeast of the Lakehurst (Navy) TACAN 148° radial extending from the TACAN to 12.2 miles southeast, and within a 6.4-mile radius of Trenton-Robbinsville Airport and within 5.7 miles north and 4 miles south of the Robbinsville VORTAC 278° and 098° radials extending from 4.8 miles west to 10 miles east of the VORTAC, and within a 6.7-mile radius of Monmouth Executive Airport and within 1.8 miles each side of the Colts Neck VOR/DME 167° radial extending from the Monmouth Executive Airport 6.7-mile radius to the VOR/DME and within 4 miles each side of the 312° bearing from Monmouth Executive airport extending from the 6.7-mile radius of the airport to 9 miles northwest of the airport and within a 6.5-mile radius of Ocean County Airport and within 1.3 miles each side of the Coyle VORTAC 044° radial extending from the 6.5-mile radius to the VORTAC.
Securities and Exchange Commission.
Final rule.
The Securities and Exchange Commission (“Commission”) is adopting amendments to its forms designed to improve the reporting and disclosure of liquidity information by registered open-end investment companies. The Commission is adopting a new requirement that funds disclose information about the operation and effectiveness of their liquidity risk management program in their reports to shareholders. The Commission in turn is rescinding the requirement in Form N-PORT under the Investment Company Act of 1940 that funds publicly disclose aggregate liquidity classification information about their portfolios. In addition, the Commission is adopting amendments to Form N-PORT that will allow funds classifying the liquidity of their investments pursuant to their liquidity risk management programs to report multiple liquidity classification categories for a single position under specified circumstances. The Commission also is adding a new requirement to Form N-PORT that funds and other registrants report their holdings of cash and cash equivalents.
Zeena Abdul-Rahman, Senior Counsel, or Thoreau Bartmann, Senior Special Counsel, at (202) 551-6792, Division of Investment Management, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-8549.
The Commission is adopting amendments to Form N-PORT [referenced in 17 CFR 274.150] under the Investment Company Act of 1940 [15 U.S.C. 80a-1
On October 13, 2016, the Commission adopted new rules and forms as well as amendments to its rules and forms to modernize the reporting and disclosure of information by registered investment companies (“funds”),
In connection with the liquidity classification requirement of rule 22e-4, a fund is required to report confidentially to the Commission the liquidity classification assigned to each of the fund's portfolio investments on Form N-PORT.
Rule 22e-4 and the related rules and forms were designed to promote effective liquidity risk management throughout the fund industry and to enhance disclosure regarding fund liquidity and redemption practices.
In light of these concerns,
We received 24 comment letters on the proposal. A significant majority of commenters generally supported replacing public disclosure of aggregate liquidity classification information on Form N-PORT with a new narrative discussion of a fund's liquidity risk management program in its report to shareholders.
Today, after considering comments we received, we are adopting amendments to Forms N-PORT and N-1A largely as proposed.
The Commission also is adopting amendments to Form N-PORT that will provide funds the flexibility to split a fund's portfolio holdings into more than one classification category in three specified circumstances when split reporting equally or more accurately reflects the liquidity of the investment or eases cost burdens. Finally, we are adopting as proposed a Form N-PORT requirement that funds, and other registrants, disclose their holdings of cash and cash equivalents not reported in Parts C and D of the Form.
Today we are replacing the requirement in Form N-PORT that a fund publicly disclose on an aggregate basis the percentage of its investments that it has allocated to each liquidity classification category with new narrative discussion in the fund's shareholder report regarding its liquidity risk management program.
The new narrative discussion will include disclosure about the operation and effectiveness of the fund's implementation of its required liquidity risk management program. Additionally, we are clarifying how funds should discuss liquidity events that materially affected performance in the management's discussion of fund performance (“MDFP”) section of the annual shareholder report.
As noted in the Proposing Release, since the Commission adopted rule 22e-4 and the related reforms, Commission staff has engaged extensively with interested parties and we have received letters from industry participants discussing the complexities of the classification process. These letters raised three general types of concerns that informed our revised approach to public fund liquidity-related disclosure. First, the commenters described how variations in methodologies and assumptions used to conduct liquidity classification can significantly affect the classification information reported on Form N-PORT in ways that investors may not understand (“subjectivity”).
As we discussed in the Proposing Release, these concerns led us to propose a new approach to liquidity-related disclosure. Most commenters on the proposal agreed with our approach, and supported replacing quarterly public disclosure of aggregate liquidity classification information on Form N-PORT with a new requirement that funds discuss the operation and effectiveness of their liquidity risk management program in their shareholder reports.
However, a few commenters objected to the proposed amendments, arguing that investors would benefit from being able to access the aggregated liquidity bucketing information of the funds in which they invest.
We continue to believe that it is important for investors to understand the liquidity risks of the funds they hold and how those risks are managed. We appreciate commenters' concerns regarding the elimination of public disclosure of aggregate liquidity classification reporting. We also recognize that subjectivity is inherent in many financial decisions and is in fact desirable to some extent in the classification information that is reported to us.
First, the quantitative presentation of the aggregate liquidity information may imply precision and uniformity in a way that obscures its subjectivity. When disclosure is clearly subjective, we believe investors are likely better able to understand and appreciate its nature. In this case, however, we believe the presentation of quantitative data may pose a significant risk of confusing and misleading investors.
Additionally, we do not believe it is appropriate to adapt Form N-PORT to add the level of detail and narrative context that we believe would be necessary for investors to appreciate better the fund's liquidity risk profile and the subjective nature of classification. The commenters who addressed potentially adapting Form N-PORT generally agreed that it may take significant detailed disclosure and nuanced explanation to effectively inform investors about the subjectivity and limitations of aggregate liquidity classification information so as to allow them to properly make use of the information.
For these reasons, and in light of the concerns above, it is our judgment that effective disclosure of liquidity risks and their management would be better achieved through prospectus and shareholder report disclosure rather than Form N-PORT. Most commenters agreed, suggesting that shareholder report disclosure would have the benefit of allowing funds to produce tailored disclosure suited to the particular liquidity risks and management practices of the specific fund.
We also are adopting, largely as proposed, a new requirement for funds to discuss briefly the operation and effectiveness of a fund's liquidity risk management program in the fund's report to shareholders. In response to commenters, we are moving this discussion of the operation and effectiveness of a fund's liquidity risk management program from the MDFP section of the annual report to a new section of the shareholder report (annual or semi-annual) following the discussion of board approval of advisory contracts.
The majority of commenters generally agreed with our proposed requirement that funds provide a narrative discussion of the operation and effectiveness of a fund's liquidity risk management program, noting that such disclosure is a better way to provide investors with useful and accessible liquidity information and reduces the risk of investor confusion.
We believe the approach to shareholder report liquidity disclosure that we are adopting addresses commenters' concerns. Funds are required to discuss in their MDFP factors that materially affected performance of the fund during the most recently completed fiscal year.
At the same time, we agree with those commenters who argued for moving the more operational disclosure outside of the MDFP because this information does not directly relate to performance results. Moving disclosure about the operation and effectiveness of the liquidity risk management program to a new subsection would be more effective and would avoid concerns about unduly focusing investors on liquidity risk and diluting the MDFP. Moving this disclosure to Item 27(d)(7) of Form N-1A may have several other benefits. The MDFP is included only in annual reports, not semi-annual reports. By moving this disclosure to a new subsection that may be included in either a fund's annual or semi-annual report,
Several commenters suggested that we exempt funds that primarily hold assets that are highly liquid investments (“highly liquid funds”) and In-Kind ETFs from including this new narrative disclosure about liquidity risk management programs in their shareholder reports.
To satisfy this new disclosure requirement, a fund generally may provide information that was provided to the board about the operation and effectiveness of the program, and insight into how the program functioned over the past year.
As part of this new disclosure, a fund might opt to discuss the particular liquidity risks that it faced over the past year, such as significant redemptions, changes in the overall market liquidity of the investments the fund holds, or other liquidity risks, and explain how those risks were managed and addressed. If the fund faced any significant liquidity challenges in the past year, it would discuss how those challenges affected the fund and how they were addressed (recognizing that this discussion may occur in the new sub-section or the MDFP, as appropriate). In the new sub-section, funds also may wish to provide context and other supplemental information about how liquidity risk is managed in relation to other investment risks of the fund. Additionally, one commenter suggested that funds can provide investors with useful empirical data metrics that would be informative of the fund's liquidity profile.
We continue to believe, and commenters generally agreed, that this new disclosure will better inform investors about the fund's liquidity risk management practices than aggregate liquidity classification data on Form N-PORT.
We also are adopting certain changes to Form N-PORT related to liquidity data. As discussed in the Proposing Release, we believe these changes may enhance the liquidity data reported to us.
We are adopting as proposed amendments to Form N-PORT to allow funds the option of splitting a fund's holding into more than one classification category in certain specified circumstances.
Other commenters suggested that we not allow funds to classify portions of a portfolio holding separately because it would “reduce the utility of the entire bucketing exercise.”
In the first circumstance, even though a holding may nominally be a single security, different liquidity-affecting features may justify treating the holding as two or more separate investments for liquidity classification purposes. For example, a fund might hold an asset that includes a put option on a percentage (but not all) of the fund's holding of the asset.
As discussed above, commenters generally agreed that such an amendment would allow funds to more accurately reflect their liquidity profile and report their holdings in a manner more consistent with internal liquidity risk management programs.
Second, it is our understanding that when sub-advisers manage different portions or “sleeves” of a fund's portfolio, sub-advisers may have different views of the liquidity classification of a single holding that is held in multiple sleeves.
Commenters generally agreed that this flexibility would allow for these benefits.
Third, it is our understanding that for internal risk management purposes some funds may currently classify their holdings proportionally across buckets, based on an assumed sale of the entire position.
In the proposal, we also requested comment on other circumstances where classification splitting might be appropriate. Commenters suggested that we also allow certain methods of classification splitting when a fund's reasonably anticipated trade size falls across multiple liquidity buckets.
We believe that allowing funds to split the reasonably anticipated trade size and use such a split in classifying the rest of a fund's position could further exacerbate these imperfections, leading to more distorted liquidity profiles for funds. The staff will continue to evaluate potential other approaches to liquidity risk management, including other approaches to classifying fund liquidity. Interested parties may provide feedback on the use of reasonably anticipated trade size as part of classification, and whether we should consider any further modifications.
Two commenters asked us to clarify that funds may use these classification-splitting approaches not just for Form N-PORT reporting, but for all classification purposes under rule 22e-
While we believe that we should permit funds to report liquidity classifications in the three ways discussed above, we also continue to believe it is necessary to limit split reporting to these circumstances in order to maintain the effectiveness of our monitoring efforts. As we stated in the Proposing Release, we believe that allowing funds to engage in such split reporting under these circumstances will allow for a more precise view of the liquidity of these securities.
We also are adopting as proposed amendments to Form N-PORT to require additional disclosure relating to a registrant's holdings of cash and cash equivalents not reported in Parts C and D of the Form.
Cash held by a fund is a highly liquid investment under rule 22e-4 and would have been included in the aggregate liquidity profile that we are eliminating. Without the aggregate liquidity profile, we may not be able to effectively monitor whether a fund is compliant with its HLIM unless we know the amount of cash held by the fund. The additional disclosure of cash and certain cash equivalents by funds also will provide more complete information to be used in analyzing a fund's HLIM, as well as trends regarding the amount of cash being held, which also correlates to other activities the fund is experiencing, including net inflows and outflows.
Most commenters who discussed this addition supported it. They agreed that providing this information is necessary for the Commission's monitoring of a fund's HLIM, and that this information would help provide a more complete picture of a fund's holdings.
While we appreciate the concerns for investor confusion, we believe that the title of the item makes clear that it covers only cash and cash equivalents not reported in other parts of the form, and therefore investors would be on notice that this item does not necessarily include all cash or cash equivalents held by the fund. We also note that funds may provide further public explanations about their cash holdings as part of the explanatory notes associated with the item.
We are therefore adopting as proposed amendments to Item B.2 of Form N-PORT (certain assets and liabilities) to include a new Item B.2.f, which will require registrants to report “cash and cash equivalents not reported in Parts C and D.” Current U.S. Generally Accepted Accounting Principles (“GAAP”) define cash equivalents as “short-term, highly liquid investments that . . . are . . . [r]eadily convertible to known amounts of cash . . . [and that are] [s]o near their maturity that they present insignificant risk of changes in value because of changes in interest rates.”
In its 2017 Asset Management and Insurance Report, the Department of Treasury highlighted the importance of robust liquidity risk management programs, but recommended that the Commission embrace a “principles-based approach to liquidity risk management rulemaking and any associated bucketing requirements.”
We received many comments that suggested alternative approaches to liquidity risk management regulation.
One commenter acknowledged that moving to a principles based approach would come at a cost, for example, because it would limit the Commission's ability to compare fund reporting in an “apples-to-apples” manner.
Today, we are modifying certain aspects of our liquidity framework, largely as proposed. However, we recognize that a broad range of commenters continue to believe that alternative approaches to classification would better achieve the Commission's goals. Accordingly, during and following the implementation of the rule and reporting requirements, the staff will continue its efforts to monitor and solicit feedback on implementation. As part of this monitoring, the staff will analyze the extent to which the liquidity classification process and data are achieving the Commission's goals and any other feedback provided from interested parties to the Commission.
We expect that this evaluation will include, at a minimum: (i) The costs and benefits of rule 22e-4 and its associated classification requirements; (ii) whether there should be public dissemination of fund-specific liquidity classification information; (iii) whether the Commission should propose amendments to rule 22e-4 to move to a more principles-based approach in light of this evaluation; (iv) and whether the Commission should propose to require certain empirical data metrics be disclosed.
To properly engage in such an evaluation and to ground it on an empirical basis, we believe it is important for funds and the Commission to gain experience with the classification process, to allow analysis of its benefits and costs based on actual practice.
We welcome public feedback as part of this evaluation, and have set up an email inbox where funds, investors, or other interested parties may submit
• To what extent will funds continue to maintain separate liquidity risk management processes and practices alongside those required by the classification provisions of rule 22e-4? What costs are associated with maintaining such dual systems? Are there synergies or other benefits that would result? Do funds expect to eventually combine existing systems and rule 22e-4 classification programs over time, or do they expect to keep them separate?
• Were the implementation and ongoing cost estimates and assumptions made in adopting rule 22e-4 and rule and form amendments accurate? In particular, were the assumptions made about vendor usage and associated costs correct considering the widespread use of vendors (as opposed to in-house systems) that we understand has taken place?
• What benefits have investors, funds, and the markets gained from liquidity classification, including matters associated with classification such as the HLIM and the illiquid investment limit? Is there a way to retain these benefits while moving to a more principles-based system? Do certain aspects of the classification process, such as the classification of illiquid investments and/or the classification of highly liquid investments, generate greater benefits than others?
• To what extent would investors and others benefit from public liquidity classification information? Are there other types of information that may allow investors to better understand the liquidity of their funds? For example, instead of classification information, would investors (or the Commission) be better able to evaluate fund liquidity through public disclosure of empirical data such as bid-ask spreads of portfolio securities, portfolio turnover, or shareholder concentration measures?
• If we were to propose amendments to rule 22e-4 to move to a more principles-based approach, would the benefits of such a new approach outweigh the costs of implementation? On what principles should we base such an approach?
Finally, as we discussed in the proposal, our staff anticipates publishing a periodic report containing aggregated and anonymized information about the fund industry's liquidity may be beneficial. One commenter objected, arguing that even aggregated and anonymized classification data would still be derived from the same disparate and subjective inputs, and accordingly may be of limited value to the Commission or the public.
As proposed, we are providing a tiered set of compliance dates based on asset size.
A number of commenters argued that the first time a fund includes the new narrative disclosure on the operation of a fund's liquidity risk management program, it should have at least a year's experience operating a liquidity risk management program under the rule.
However, we are not changing the compliance date for the Form N-PORT amendments from the proposal. Most commenters did not object to the proposed Form N-PORT compliance dates, although a few asked that funds be provided at least one year from adoption to implement the changes to Form N-PORT.
Below is a chart that describes the compliance dates for the Form N-PORT and Form N-1A amendments that we are adopting today.
The Commission is sensitive to the potential economic effects of the amendments to Form N-PORT and Form N-1A that we are adopting. These effects include the benefits and costs to funds, their investors and investment advisers, issuers of the portfolio securities in which funds invest, and other market participants potentially affected by fund and investor behavior as well as any effects on efficiency, competition, and capital formation.
The costs and benefits of the amendments as well as any impact on efficiency, competition, and capital formation are considered relative to an economic baseline. For the purposes of this economic analysis, the baseline is the regulatory framework and liquidity risk management practices currently in effect, and any expected changes to liquidity risk management practices, including any systems and processes that funds have already implemented in order to comply with the liquidity rule and related requirements as anticipated in the Liquidity Adopting Release and the Liquidity Extension Release.
The economic baseline's regulatory framework consists of the rule requirements adopted by the Commission on October 13, 2016 in the Liquidity Adopting Release. Under the baseline, larger entities must comply with some of the liquidity rule's requirements, such as the establishment of a liquidity risk management program, by December 1, 2018 and must comply with other requirements, such as the classification of portfolio holdings, by June 1, 2019.
The primary SEC-regulated entities affected by these amendments are mutual funds and ETFs. As of the end of 2017, there were 9,154 mutual funds managing assets of approximately $19 trillion,
We are mindful of the costs and benefits of the amendments to Form N-PORT and Form N-1A we are adopting. The Commission, where possible, has sought to quantify the benefits and costs, and effects on efficiency, competition and capital formation expected to result from these amendments. However, as discussed below, the Commission is unable to quantify certain of the economic effects because it lacks information necessary to provide reasonable estimates. The economic effects of the amendments fall into two categories: (1) Effects stemming from changes to public disclosure on Form N-PORT and Form N-1A; (2) effects stemming from changes to non-public disclosure on Form N-PORT.
The amendments to Form N-PORT and Form N-1A we are adopting alter the public disclosure of information about fund liquidity in three ways. First, the amendments rescind the requirement that funds publicly disclose their aggregate liquidity profile on a quarterly basis with a 60-day delay in structured format on Form N-PORT.
Funds and other registrants will experience benefits and costs associated with the amendments to public disclosure requirements on Form N-PORT. Funds will no longer incur the one-time and ongoing costs associated with preparing the portion of Form N-PORT associated with the aggregate liquidity profile. These costs likely would have constituted a small portion of the aggregate one-time costs of $158 million and the ongoing costs of $3.9 million for Form N-PORT that we estimated in the Liquidity Adopting Release.
In aggregate, we expect any additional costs associated with the requirement that funds and other registrants disclose their holdings of cash and cash equivalents to be offset by the savings associated with funds no longer having to report an aggregate liquidity profile. Therefore, we expect that funds and other registrants will not experience a significant net economic effect associated with the direct costs of filing Form N-PORT.
Relative to the baseline, funds will incur costs associated with preparing an annual narrative discussion of their liquidity risk management programs in the fund's shareholder report. We estimate that funds will incur aggregate one-time costs of approximately $18 million and aggregate ongoing costs of approximately $9 million in preparing this narrative discussion.
As discussed above, and in response to comments, the Commission is not adopting the requirement that the narrative disclosure be part of the MDFP and instead is requiring that the narrative disclosure of the operation and effectiveness of a fund's liquidity management programs be part of the fund's shareholder report (annual or semi-annual) in the section following the discussion of board approval of advisory contracts.
Investors will also experience costs and benefits as a result of the changes to public disclosure requirements on Form N-PORT and Form N-1A that we are adopting.
As discussed above, the compliance date for rule 22e-4 and related reporting on Form N-PORT has not yet occurred and the Commission has not yet received portfolio classification data from funds, nor is aggregated liquidity classification information currently being made public. As a result, the Commission's assessment of the costs and benefits of these changes is, necessarily, informed by qualitative concerns, together with what we know about the subjectivity of inputs, assumptions, and methods that funds are likely to utilize in classifying portfolio assets and the nature of the information to be reported. The liquidity classifications that funds would have used to construct an aggregate liquidity profile are based on several factors that are subjective and fund specific. Such factors include a fund's determination of the reasonably anticipated trade size for a given holding and its determination of what constitutes significant market impact.
The overall impact of the amendments on an investor's use of data for informing investment choices will likely depend on how the investor accesses and processes information about fund liquidity. If certain investors prefer to base their investment decisions on information that is accessible to them in an unstructured document, those investors will be more likely to use the narrative discussion of a fund's liquidity risk management program in shareholder reports than they would have been to use the aggregate liquidity profile within the structured format of Form N-PORT to inform their investment decisions. However, certain other investors may prefer to access, reuse, and compare the information about a fund's liquidity risk if included within a structured format on Form N-PORT. These investors will have a reduced ability to make as timely and accurate an analysis within an entity's filings, perform text analysis of an entity's narrative disclosures, and potentially combine narrative and numeric information when the narrative disclosures related to their liquidity risk management programs are provided to them in the unstructured format of an annual report. Further, there may be an increased burden on these third-party providers to search, parse, and assess the quality of the unstructured information in funds' annual reports. To the extent that certain investors rely on third parties to provide them with information for analysis, this increased burden may be partially or fully passed on to these investors in the form of higher costs.
One commenter recommended that narrative disclosures, as well as all financial data, be reported in a consistent, structured format to promote comparison across filings and filers.
Finally, the amendment to Form N-PORT that requires funds and other registrants to publicly disclose their holdings of cash and cash equivalents that are not reported in Parts C and D of the Form on a quarterly basis with a 60-day delay will give investors some potentially useful information about the most liquid assets that a fund previously had available to, for example, meet its redemption obligations.
In addition to the amendments to public disclosures of liquidity information discussed above, the amendments to Form N-PORT give funds the option to split a given holding into portions that may have different liquidity classifications on their non-public reports on Form N-PORT. Funds may benefit from the amendment because it gives them the option to either include an entire holding within a classification bucket or to allocate portions of the holding across classification buckets. This could benefit a fund and the fund's investors if a more granular approach to classification that assigns portions of a portfolio holding to separate classification buckets is more consistent with the fund's preferred approach to liquidity risk management. This approach also reduces the need for funds to develop systems and processes to allocate each holding to exactly one classification bucket for the purposes of regulatory compliance.
Several commenters supported the amendments to Form N-PORT that will give funds the option to split a given holding into portions that may have different liquidity classifications on their non-public reports on Form N-PORT, noting that this option will allow funds increased flexibility and higher precision when classifying the liquidity of an investment.
Other commenters suggested that we should not allow funds to classify portions of a portfolio holding separately because it would reduce the value of the information and would “reduce the utility of the entire bucketing exercise.”
The amendments we are adopting have several potential effects on efficiency, competition, and capital formation. First, if publicly disclosed aggregate liquidity profiles may have created an incentive for a fund to classify its holdings in a manner that led to a relatively more liquid aggregate liquidity profile in order to attract investors, the amendments remove any such incentive and potentially reduce the likelihood that funds compete based on their aggregate liquidity profiles. To the extent that a fund or other registrant's cash and cash equivalent holdings are interpreted by investors as being associated with lower liquidity risk, funds and other registrants may still have some incentive to compete based on their holdings of cash and cash equivalents as a result of the amendments.
Second, to the extent that those publicly disclosed aggregate liquidity profiles would have helped investors more accurately evaluate fund liquidity risk and make more informed investment decisions, the amendments could reduce allocative efficiency. The annual discussion of a fund's liquidity risk management program in shareholder reports and the requirement that funds and other registrants publicly disclose their holdings of cash and cash equivalents on Form N-PORT could mitigate this reduction in allocative efficiency if these requirements provide information that helps investors evaluate fund liquidity risk. Furthermore, to the extent that aggregate liquidity profiles on Form N-PORT would have increased the likelihood of investors making investment choices based on any confusion about a fund's liquidity risk profile, which would have harmed the efficient allocation of capital, the amendments could increase allocative efficiency.
Lastly, to the extent that the information provided by aggregate liquidity profiles would have promoted increased investment in certain funds, and the assets those funds invest in, rescinding the aggregate liquidity profile requirement could reduce capital formation. At the same time, we note that the new public disclosure requirements we are adopting could offset any reduction in capital formation.
In summary, we note that all of the effects described above are conditioned upon the usefulness to investors of information that we will no longer require relative to the usefulness of additional disclosure requirements we are adopting. We cannot estimate the aggregate effect on efficiency, competition, or capital formation that will result from the new amendments because we do not know the extent to which aggregate liquidity risk profiles, narrative discussion of a fund's liquidity risk management program, or the amount of cash and cash equivalents held by a fund and other registrants are useful to investors in making more informed investment choices.
The Commission considered several alternatives to the amendments to funds public and non-public disclosure requirements that we are adopting.
First, in order to address any potential issues with the interpretation of a fund's aggregate liquidity profile by investors, we could have maintained the public disclosure of this profile on Form N-PORT and added a requirement that funds publicly disclose on Form N-PORT additional information providing context and clarification regarding how their aggregate liquidity profiles were generated and should be interpreted. This alternative would have provided investors with some of the benefits of the additional context provided by the narrative discussion on Form N-1A that we are adopting, and, to the extent that it increased investors' understanding of a fund's aggregate liquidity profile, could have allowed them to make more informed investment choices relative to the baseline. However, some investors may believe that they can more easily obtain information in a fund's annual report compared to information in the fund's Form N-PORT filings if they are not as interested in being able to access, reuse, and compare the information if included in a structured format on Form N-PORT. This alternative would have required these investors to seek out this additional information on EDGAR.
Second, instead of requiring a fund to briefly discuss the operation and effectiveness of its liquidity risk management program in a shareholder report, we could have required a more specific discussion of the fund's exposure to liquidity risk over the preceding year, how the fund managed that risk, and how the fund's returns were affected over the preceding year. This alternative could have helped investors understand both a fund's liquidity risk and the fund's approach to managing that risk, which might lead to more informed investment decisions than a discussion of the fund's liquidity risk management program. However, this alternative could have been more costly for some funds to implement than the proposed narrative discussion in the shareholder report, and funds still have the flexibility to provide this information in the course of complying with the final rule if they think it will benefit their investors.
Third, we could have required funds to disclose an aggregate liquidity profile in their annual report along with additional information providing context and clarification regarding how its aggregate liquidity profile was generated and should be interpreted. If such disclosure increased investors'
Fourth, we could have amended both Form N-PORT and rule 22e-4 to prescribe an objective approach to classification in which the Commission would specify more precise criteria and guidance regarding how funds should classify different categories of investments. Such an approach could permit consistent comparisons of different funds' aggregate liquidity profiles, allowing investors to make more informed investment decisions without requiring funds to provide additional contextual discussion of their liquidity risk management programs. However, as discussed in the Liquidity Adopting Release, the Commission may not be able to respond as quickly as market participants to dynamic market conditions that might necessitate changes to such criteria and guidance.
Fifth, we could have required that if funds chose to split the classification of any of their portfolio holdings across liquidity buckets when reporting them on the non-public portion of Form N-PORT, they do so for all of their portfolio holdings. This would have ensured that all of the portfolio holdings within a given fund could be interpreted more consistently for any monitoring purposes by the Commission. However, to the extent that being able to choose the classification approach appropriate to each portfolio holding more accurately reflects a manager's judgment of that portfolio holding's liquidity, any reduction in the consistency of portfolio classifications under the amendments we are adopting could be offset by a more accurate description of the manager's assessment of fund liquidity risk.
The amendments to Form N-PORT and Form N-1A contain “collections of information” within the meaning of the Paperwork Reduction Act of 1995 (“PRA”).
The title for the existing collections of information are: “Rule 30b1-9 and Form N-PORT” (OMB Control No. 3235-0730); and “Form N-1A under the Securities Act of 1933 and under the Investment Company Act of 1940, Registration Statement of Open-End Management Investment Companies” (OMB Control No. 3235-0307). The Commission is submitting these collections of information to the Office of Management and Budget (“OMB”) for review in accordance with 44 U.S.C. 3507(d) and 5 CFR 1320.11. 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 control number. The Commission is amending Form N-PORT and Form N-1A. The amendments are designed to improve the reporting and disclosure of liquidity information by funds. We discuss below the collection of information burdens associated with these amendments. In the Proposing Release, the Commission solicited comment on the collection of information requirements and the accuracy of the Commission's statements in the Proposing Release.
As discussed above, on October 13, 2016, the Commission adopted new Form N-PORT, which requires mutual funds and ETFs
In the Liquidity Adopting Release, we estimate that, for the 35% of funds that would file reports on Form N-PORT in house, the per fund average aggregate annual hour burden will be 144 hours per fund, and the average cost to license a third-party software solution will be $4,805 per fund per year.
We are adopting, substantially as proposed, amendments to Form N-PORT to rescind the requirement that a fund report the aggregate percentage of the fund's portfolio representing each of the four liquidity categories. As discussed above, we are rescinding this requirement because we believe, and commenters generally agree,
Based on Commission staff experience, we believe that rescinding the requirement that funds publicly report the aggregate classification information on Form N-PORT will reduce the estimated burden hours and costs associated with Form N-PORT by approximately one hour. We believe, however, that this reduction in cost will be offset by the increase in cost associated with the other amendments to Form N-PORT, which we also estimate to be one hour. Therefore, we believe that there will be no substantive modification to the existing collection of information for Form N-PORT. Commenters did not provide comment on our estimated reduction in burden hours and costs associated with Form N-PORT. As a result, the Commission believes that the current PRA burden estimates for the existing collection of information requirements remain appropriate.
Form N-1A is the registration form used by open-end investment companies. The respondents to the amendments to Form N-1A adopted today are open-end management investment companies registered or registering with the Commission. Compliance with the disclosure requirements of Form N-1A is mandatory, and the responses to the disclosure requirements are not confidential. In our most recent Paperwork Reduction Act submission for Form N-1A, we estimated for Form N-1A a total hour burden of 1,602,751 hours, and the total annual external cost burden is $131,139,208.
We are adopting, largely as proposed, amendments to Form N-1A to require funds disclose information about the operation and effectiveness of their liquidity risk management program in their reports to shareholders. Specifically, in response to commenters, we are moving the discussion of the operation and effectiveness of a fund's liquidity risk management program to the section of the shareholder report (annual or semi-annual) following the discussion of board approval of advisory contracts.
Form N-1A generally imposes two types of reporting burdens on investment companies: (i) The burden of preparing and filing the initial registration statement; and (ii) the burden of preparing and filing post-effective amendments to a previously effective registration statement (including post-effective amendments filed pursuant to 17 CFR 230.485(a) or (b) (“rule 230.485(a) or (b)”) under the Securities Act, as applicable). As in the proposal, we estimate that each fund will incur a one-time burden of an additional five hours
Based on Commission staff expertise and experience, we estimate that each fund will incur an ongoing burden of an additional 2.5 hours each year to review and update the required disclosure.
The Commission has prepared the following Final Regulatory Flexibility Analysis in accordance with section 3(a) of the Regulatory Flexibility Act (“RFA”).
The Commission adopted rule 22e-4 and related rule and form amendments to enhance the regulatory framework for liquidity risk management of funds.
In the Proposing Release, we requested comment on the IRFA, requesting in particular comment on the number of small entities that would be subject to the proposed amendments to Form N-1A and Form N-PORT and whether these proposed amendments would have any effects that have not been discussed. We requested that commenters describe the nature of any effects on small entities subject to the proposed amendments to Form N-1A and Form N-PORT and provide empirical data to support the nature and extent of such effects. We also requested comment on the estimated compliance burdens of the proposed amendments to Form N-1A and Form N-PORT and how they would affect small entities. We did not receive comments regarding the impact of our proposal on small entities.
An investment company is a small entity if, together with other investment companies in the same group of related investment companies, it has net assets of $50 million or less as of the end of its most recent fiscal year.
We are adopting amendments to Form N-1A and Form N-PORT to enhance fund disclosure regarding a fund's liquidity risk management practices. Specifically, the amendments to Form N-PORT
All funds will be subject to the new disclosure and reporting requirements, including funds that are small entities. We estimate that 54 funds are small entities that will be required to comply with the disclosure and reporting requirements. As discussed above, we do not believe that our amendments will change Form N-PORT's estimated burden hours and costs.
Amortizing these one-time and ongoing hour and cost burdens over three years results in an average annual increased burden of approximately 4.2 hours,
The RFA directs the Commission to consider significant alternatives that would accomplish our stated objectives, while minimizing any significant economic impact on small entities. Alternatives in this category include: (i) Exempting funds that are small entities from the disclosure requirements on Form N-1A, or establishing different disclosure or reporting requirements, or different disclosure frequency, to account for resources available to small entities; (ii) clarifying, consolidating, or simplifying the compliance requirements under the amendments for small entities; (iii) using performance rather than design standards; and (iv) exempting funds that are small entities from other amendments to Form N-PORT.
The Commission does not believe that exempting any subset of funds, including funds that are small entities, from the amendments would permit us to achieve our stated objectives. Nor do we believe that clarifying, consolidating, or simplifying the amendments for small entities would satisfy those objectives. In particular, we do not believe that the interest of investors would be served by these alternatives. We believe that all fund investors, including investors in funds that are small entities, would benefit from accessible and useful disclosure about liquidity risk, with appropriate context, so that investors may understand its nature and relevance to their investments.
The Commission is adopting amendments to Form N-1A and Form N-PORT under the authority set forth in the Securities Act, particularly section 19 thereof [15 U.S.C. 77a
Investment companies, Reporting and recordkeeping requirements, Securities.
For the reasons set out in the preamble, title 17, chapter II of the Code of Federal Regulations is amended as follows:
15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78
The addition reads as follows:
The text of Form N-1A does not, and this amendment will not, appear in the Code of Federal Regulations.
(a) * * *
(d) Annual and Semi-Annual Reports.
7.
(a)
(b)
If the board reviews the liquidity risk management program more frequently than annually, a fund may choose to include the discussion of the program's operation and effectiveness over the past year in one of either the fund's annual or semi-annual reports, but does not need to include it in both reports.
The revisions read as follows:
The text of Form N-PORT does not, and this amendment will not, appear in the Code of Federal Regulations.
The SEC does not intend to make public the information reported on Form N-PORT for the first and second months of each Fund's fiscal quarter that is identifiable to any particular fund or adviser, or any information
Item B.2.f. Cash and cash equivalents not reported in Parts C and D.
Item B.8 Derivatives Transactions. For portfolio investments of open-end management investment companies, provide the percentage of the Fund's Highly Liquid Investments that it has segregated to cover or pledged to satisfy margin requirements in connection with derivatives transactions that are classified among the following categories as specified in rule 22e-4 [17 CFR 270.22e-4]:
1. Moderately Liquid Investments
2. Less Liquid Investments
3. Illiquid Investments
Item C.7.a Liquidity classification information.
For portfolio investments of open-end management investment companies, provide the liquidity classification(s) for each portfolio investment among the following categories as specified in rule 22e-4 [17 CFR 270.22e-4]. For portfolio investments with multiple liquidity classifications, indicate the percentage amount attributable to each classification.
i. Highly Liquid Investments
ii. Moderately Liquid Investments
iii. Less Liquid Investments
iv. Illiquid Investments
Item C.7.b. If attributing multiple classification categories to the holding, indicate which of the three circumstances listed in the Instructions to Item C.7 is applicable.
For reports filed for the end of the first and third quarters of the Fund's fiscal year, attach no later than 60 days after the end of the reporting period the Fund's complete portfolio holdings as of the close of the period covered by the report. These portfolio holdings must be presented in accordance with the schedules set forth in §§ 210.12-12—210.12-14 of Regulation S-X [17 CFR 210.12-12—210.12-14].
By the Commission.
Drug Enforcement Administration, Department of Justice.
Temporary amendment; temporary scheduling order.
The Acting Administrator of the Drug Enforcement Administration is issuing this temporary scheduling order to schedule the synthetic cannabinoids, Naphthalen-1-yl 1-(5-fluoropentyl)-1
This temporary scheduling order is effective July 10, 2018, until July 10, 2020. If this order is extended or made permanent, the DEA will publish a document in the
Michael J. Lewis, Diversion Control Division, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone: (202) 598-6812.
Section 201 of the Controlled Substances Act (CSA), 21 U.S.C. 811, provides the Attorney General with the authority to temporarily place a substance in schedule I of the CSA for two years without regard to the requirements of 21 U.S.C. 811(b) if he finds that such action is necessary to avoid an imminent hazard to the public safety. 21 U.S.C. 811(h)(1). In addition, if proceedings to control a substance are initiated under 21 U.S.C. 811(a)(1), the Attorney General may extend the temporary scheduling
Where the necessary findings are made, a substance may be temporarily scheduled if it is not listed in any other schedule under section 202 of the CSA,
Section 201(h)(4) of the CSA 21 U.S.C. 811(h)(4), requires the Administrator to notify the Secretary of the Department of Health and Human Services (HHS) of his intention to temporarily place a substance in schedule I of the CSA.
To find that placing a substance temporarily in schedule I of the CSA is necessary to avoid an imminent hazard to the public safety, the Administrator is required to consider three of the eight factors set forth in section 201(c) of the CSA, 21 U.S.C. 811(c): The substance's history and current pattern of abuse; the scope, duration and significance of abuse; and what, if any, risk there is to the public health. 21 U.S.C. 811(h)(3). Consideration of these factors includes actual abuse, diversion from legitimate channels, and clandestine importation, manufacture, or distribution. 21 U.S.C. 811(h)(3).
A substance meeting the statutory requirements for temporary scheduling may only be placed in schedule I. 21 U.S.C. 811(h)(1). Substances in schedule I are those that have a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. 21 U.S.C. 812(b)(1).
Available data and information for NM2201, 5F-AB-PINACA, 4-CN-CUMYL-BUTINACA, MMB-CHMICA and 5F-CUMYL-P7AICA, summarized below, indicate that these synthetic cannabinoids (SCs) have a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. The DEA's three-factor analysis and the Assistant Secretary's March 27, 2018 letter are available in their entirety under the tab “Supporting Documents” of the public docket of this action at
The illicit use of the synthetic cannabinoids (SCs) has continued throughout the United States, resulting in severe adverse effects, overdoses and deaths. While new SCs continue to emerge on the illicit market, some substances identified at their peak in previous years have continued to be abused by the user population.
SCs are substances synthesized in laboratories that mimic the biological effects of delta-9-tetrahydrocannabinol (THC), the main psychoactive ingredient in marijuana. SCs were introduced on the designer drug market in several European countries as “herbal incense” before the initial encounter in the United States by U.S. Customs and Border Protection (CBP) in November 2008. From 2009 to the present, misuse of SCs has increased in the United States with law enforcement encounters describing SCs applied onto plant material and in other designer drug products intended for human consumption. Hospital reports, scientific publications and/or law enforcement reports demonstrate that NM2201, 5F-AB-PINACA, 4-CN-CUMYL-BUTINACA, MMB-CHMICA and 5F-CUMYL-P7AICA and their associated designer drug products are abused for their psychoactive properties. As with many generations of SCs encountered since 2009, the abuse of NM2201, 5F-AB-PINACA, 4-CN-CUMYL-BUTINACA, MMB-CHMICA and 5F-CUMYL-P7AICA is impacting or will negatively impact communities.
As observed by the DEA and CBP, SCs originate from foreign sources, such as China. Bulk powder substances are smuggled via common carrier into the United States and find their way to clandestine designer drug product manufacturing operations located in residential neighborhoods, garages, warehouses, and other similar destinations throughout the country. According to online discussion boards and law enforcement encounters, spraying or mixing the SCs with plant material provides a vehicle for the most common route of administration—smoking (using a pipe, a water pipe, or rolling the drug-laced plant material in cigarette papers).
NM2201, 5F-AB-PINACA, 4-CN-CUMYL-BUTINACA, MMB-CHMICA and 5F-CUMYL-P7AICA have no accepted medical use in the United States. Use of NM2201, 5F-AB-PINACA and 4-CN-CUMYL-BUTINACA has been reported to result in adverse effects in humans in the United States. In addition, within the United States, there have been numerous law enforcement seizures of NM2201, 5F-AB-PINACA, 4-CN-CUMYL-BUTINACA, and MMB-CHMICA during 2013 to 2018, as well as one law enforcement seizure of 5F-CUMYL-P7AICA in 2018. There have been multiple international seizures of 5F-CUMYL-P7AICA, and its use has been reported to result in serious adverse events, including death, in other countries. Use of other SCs has resulted in signs of addiction and withdrawal. Based on the pharmacological similarities between NM2201, 5F-AB-PINACA, 4-CN-CUMYL-BUTINACA, MMB-CHMICA and 5F-CUMYL-P7AICA and other SCs, they are likely to produce signs of addiction and withdrawal similar to those produced by other SCs.
NM2201, 5F-AB-PINACA, 4-CN-CUMYL-BUTINACA, MMB-CHMICA and 5F-CUMYL-P7AICA are SCs that have pharmacological effects similar to the schedule I hallucinogen THC and other temporarily and permanently controlled schedule I SCs. In addition, the misuse of NM2201, 5F-AB-PINACA and 4-CN-CUMYL-BUTINACA has been associated with multiple overdoses requiring emergency medical intervention in the United States. With no approved medical use and limited safety or toxicological information, NM2201, 5F-AB-PINACA, 4-CN-CUMYL-BUTINACA, MMB-CHMICA and 5F-CUMYL-P7AICA have emerged on the designer drug market, and the abuse or trafficking of these substances for their psychoactive properties is concerning.
Synthetic cannabinoids have been developed by researchers over the last 30 years as tools for investigating the endocannabinoid system (
Numerous SCs have been identified as product adulterants, and law enforcement has seized bulk amounts of these substances. As successive generations of SCs have been identified and included within schedule I, illicit distributors have developed new SC substances that vary only by slight modifications to their chemical structure while retaining pharmacological effects related to their abuse potential. These substances and products laced with these substances are marketed under the guise of “herbal incense” and promoted as a “legal high” with a disclaimer that they are “not for human consumption.” Thus, after section 1152 of the Food and Drug Administration Safety and Innovation Act (FDASIA), Public Law 112-144, placed cannabimimetic agents and 26 specific substances in schedule I, law enforcement documented the emergence of new SCs, including UR-144, XLR11, AKB48, PB-22, 5F-PB-22, AB-FUBINACA, and ADB-PINACA. After these substances were temporarily scheduled (78 FR 28735, 79 FR 7577), another generation of SCs appeared, including AB-CHMINACA, AB-PINACA, and THJ-2201. These substances were also temporarily, and then permanently, scheduled in schedule I (80 FR 5042, 82 FR 8593).
NM2201 was first identified in November 2012 in seized drug evidence, followed by 5F-AB-PINACA (August, 2013), MMB-CHMICA (December, 2015), 4-CN-CUMYL BUTINACA (January, 2016) and most recently 5F-CUMYL-P7AICA (February, 2018). Following their manufacture in China, SCs are often encountered in countries including New Zealand, Australia and Russia before appearing throughout Europe and eventually the US. European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) reported that 50 kg's of 4-CN-CUMYL-BUTINACA were seized in Europe in 2016. While the National Forensic Laboratory Information System (NFLIS) (see factor 5) reported the first US encounter of 4-CN-CUMYL-BUTINACA in January 2016, the recent increase in encounters did not occur until later in 2017. Similarly, prior to the first US encounter of 5F-CUMYL-P7AICA in February 2018, the use of this substance has resulted in adverse events that have been documented in Europe (See factor 6). These data further support that based upon trends, SCs originate in China before being abused in countries including those in Europe often before being trafficked in the US. Based upon the similarity between the trafficking patterns, distribution and use of 5F-CUMYL-P7AICA versus other illicit SCs, 5F-CUMYL-P7AICA poses significant risk for continued emergence in illicit drug markets in the United States. Recent law enforcement seizures are demonstrating that some SCs whose popularity peaked in 2014 and 2015 have remained popular within the illicit market (
The powder form of SCs is typically dissolved in solvents (
NM2201, 5F-AB-PINACA, 4-CN-CUMYL-BUTINACA, MMB-CHMICA and 5F-CUMYL-P7AICA, similar to other SCs, have been found in powder form or mixed with dried leaves or herbal blends that were marketed for human use. Presentations at emergency departments directly linked to the abuse of NM2201, 5F-AB-PINACA or 4-CN-CUMYL-BUTINACA have resulted in adverse symptoms, including diaphoresis, tachycardia, hypertension, seizures, agitation, violence, nausea and memory impairment.
SCs continue to be encountered on the illicit market despite scheduling actions that attempt to safeguard the public from the adverse effects and safety issues associated with these substances (see factor 5 in supporting documentation). Novel substances continue to be encountered, differing only by small chemical structural modifications intended to avoid prosecution while maintaining the pharmacological effects. Law enforcement and health care professionals continue to report the abuse of these substances and their associated products.
As described by the National Institute on Drug Abuse (NIDA), many substances being encountered in the illicit market, specifically SCs, have been available for years but have reentered the marketplace due to a renewed popularity. This is especially true for substances like NM2201 and 5F-
Full reports of information obtained through STARLiMS,
NM2201: 2,830 NFLIS reports from 30 states since 2012,
5F-AB-PINACA: 1,180 NFLIS reports from 36 states since 2013, 188 STRIDE/STARLiMS reports from 17 states plus DC and Guam since 2013.
4-CN-CUMYL-BUTINACA: 493 NFLIS reports from 3 states since 2016.
MMB-CHMICA: 254 NFLIS reports from 17 states since 2015, 96 STARLiMS reports from 8 states plus DC since 2015.
5F-CUMYL-P7AICA: 1 NFLIS report from 1 state since 2018. As described previously, based on the similarity between trafficking patterns, distribution and the use of 5F-CUMYL-P7AICA versus other illicit SCs, 5F-CUMYL-P7AICA poses significant risk for continued emergence in illicit drug markets in the United States.
Since first being identified in the U.S. in 2008, the ingestion of SCs continues to result in serious adverse effects and encounters. Details of these events in the U.S. and/or abroad involving NM2201, 5F-AB-PINACA, 4-CN-CUMYL-BUTINACA and 5F-CUMYL-P7AICA are summarized below and detailed in the DEA 3-Factor Analysis. While no adverse event information is currently available for MMB-CHMICA, increasing law enforcement seizures, scientific publications regarding its abuse and the pharmacological similarity of MMB-CHMICA to other currently controlled schedule I SCs with known risks to public health (
1. A previously well 25-year-old man in the United Kingdom presented with agitation, double incontinence and left-sided incoordination. His symptoms started after smoking a synthetic cannabinoid (black mamba) 5 days earlier. Over 48 hours, he developed aphasia, generalized hypertonia, hyper-reflexia and dense left hemiparesis. This progressed to profuse diaphoresis, fever, tachycardia, hypertension and a possible seizure necessitating admission to the intensive care unit. An electroencephalogram showed widespread brain wave slowing, indicating diffuse cerebral dysfunction. Toxicology analysis of the substance confirmed a potent synthetic cannabinoid NM2201.
2. In December 2015, 25-30 people in Ocala, FL who used a synthetic cannabinoid product were taken to local hospitals following episodes of violence, fighting and experiencing seizures. Local laboratory analysis confirmed drug evidence seized from the overdose cluster as NM2201.
3. In June 2014, a 37 year old male in Japan drove a car from a busy downtown street onto a wide sidewalk for 30 meters and hit many pedestrians one after another until it was stopped by collision with a telephone booth. A woman was killed and seven persons were injured. The driver lost consciousness and was drooling. He had no memory of what occurred after smoking. 5F-AMB and AB-CHMINACA were detected in the herbal mixture. In addition, 5F-AB-PINACA was detected in the urine sample.
4. Between December 2017 and January 2018, at least 37 confirmed or suspected cases of intoxication occurred in Utah following ingestion of products labeled either “CBD Oil” or “YOLO.” The products were liquids intended to be used in a vaping device or directly ingested sublingually. Further testing of these products determined that they contained the synthetic cannabinoid 4-CN-CUMYL-BUTINACA. As per the Utah Department of Health, adverse reactions included altered mental status, hallucinations, seizures, confusion, loss of consciousness, tachycardia or slurred speech.
5. In January 2018, 13 correctional facility workers were treated for overdose symptoms including diaphoresis, hypertension and tachycardia following ingestion of an airborne substance while conducting cell searches for contraband. In response to the overdose events, evidence retrieved from the searches tested positive for the synthetic cannabinoids 5F-ADB, 5F-EDMB-PINACA and 4-CN-CUMYL-BUTINACA.
6. Eight countries within Europe have reported just over 50 detections of 5F-CUMYL-P7AICA to the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA). 5F-CUMYL-P7AICA was typically detected in plant material or as a powder. The biggest detections included a 5 kg seizure (December 2014) and 7 kg seizure (January 2015) of white powder believed to originate from China.
7. Two deaths with confirmed exposure to 5F-CUMYL-P7AICA (detected along with other substances) have been reported to the EMCDDA. These occurred in November 2016 and December 2016. In one of the cases, 5F-CUMYL-P7AICA was reported as the cause of death.
8. In February 2018, 5F-CUMYL-P7AICA was confirmed in a seizure of powder-material in Bay County, Florida.
Because they share pharmacological similarities with schedule I substances (Δ
NM2201, 5F-AB-PINACA, 4-CN-CUMYL-BUTINACA, MMB-CHMICA and 5F-CUMYL-P7AICA are being encountered on the illicit drug market in the US and/or Europe and have no accepted medical use in the United States. Regardless, these products continue to be easily available and abused by diverse populations.
In accordance with 21 U.S.C. 811(h)(3), based on the available data
In accordance with the provisions of section 201(h) of the CSA, 21 U.S.C. 811(h), the Acting Administrator considered available data and information, and herein sets forth the grounds for his determination that it is necessary to temporarily schedule Naphthalen-1-yl 1-(5-fluoropentyl)-1
Because the Acting Administrator hereby finds it necessary to temporarily place NM2201, 5F-AB-PINACA, 4-CN-CUMYL-BUTINACA, MMB-CHMICA and 5F-CUMYL-P7AICA in schedule I to avoid an imminent hazard to the public safety, this temporary order scheduling these substances is effective on the date of publication in the
The CSA sets forth specific criteria for scheduling a drug or other substance. Permanent scheduling actions in accordance with 21 U.S.C. 811(a) are subject to formal rulemaking procedures done “on the record after opportunity for a hearing” conducted pursuant to the provisions of 5 U.S.C. 556 and 557. 21 U.S.C. 811. The permanent scheduling process of formal rulemaking affords interested parties with appropriate process and the government with any additional relevant information needed to make a determination. Final decisions that conclude the permanent scheduling process of formal rulemaking are subject to judicial review. 21 U.S.C. 877. Temporary scheduling orders are not subject to judicial review. 21 U.S.C. 811(h)(6).
Upon the effective date of this temporary order, NM2201, 5F-AB-PINACA, 4-CN-CUMYL-BUTINACA, MMB-CHMICA and 5F-CUMYL-P7AICA will be subject to the regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, reverse distribution, importation, exportation, engagement in research, and conduct of instructional activities or chemical analysis with, and possession of schedule I controlled substances including the following:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Section 201(h) of the CSA, 21 U.S.C. 811(h), provides for a temporary scheduling action where such action is necessary to avoid an imminent hazard to the public safety. As provided in this subsection, the Attorney General may, by order, schedule a substance in schedule I on a temporary basis. Such an order may not be issued before the expiration of 30 days from (1) the publication of a notice in the
Inasmuch as section 201(h) of the CSA directs that temporary scheduling actions be issued by order and sets forth the procedures by which such orders are to be issued, the DEA believes that the notice and comment requirements of the Administrative Procedure Act (APA) at 5 U.S.C. 553, do not apply to this temporary scheduling action. In the alternative, even assuming that this action might be subject to 5 U.S.C. 553, the Administrator finds that there is good cause to forgo the notice and comment requirements of section 553, as any further delays in the process for issuance of temporary scheduling orders would be impracticable and contrary to the public interest in view of the manifest urgency to avoid an imminent hazard to the public safety.
Further, the DEA believes that this temporary scheduling action is not a “rule” as defined by 5 U.S.C. 601(2), and, accordingly, is not subject to the requirements of the Regulatory Flexibility Act. The requirements for the preparation of an initial regulatory flexibility analysis in 5 U.S.C. 603(a) are not applicable where, as here, the DEA is not required by the APA or any other law to publish a general notice of proposed rulemaking.
Additionally, this action is not a significant regulatory action as defined by Executive Order 12866 (Regulatory Planning and Review), section 3(f), and, accordingly, this action has not been reviewed by the Office of Management and Budget.
This action 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. Therefore, in accordance with Executive Order 13132 (Federalism) it is determined that this action does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.
As noted above, this action is an order, not a rule. Accordingly, the Congressional Review Act (CRA) is inapplicable, as it applies only to rules. However, if this were a rule, pursuant to the CRA, “any rule for which an agency for good cause finds that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest, shall take effect at such time as the federal agency promulgating the rule determines.” 5 U.S.C. 808(2). It is in the public interest to schedule these substances immediately to avoid an imminent hazard to the public safety. This temporary scheduling action is taken pursuant to 21 U.S.C. 811(h), which is specifically designed to enable the DEA to act in an expeditious manner to avoid an imminent hazard to the public safety. 21 U.S.C. 811(h) exempts the temporary scheduling order from standard notice and comment rulemaking procedures to ensure that the process moves swiftly. For the same reasons that underlie 21 U.S.C. 811(h), that is, the DEA's need to move quickly to place these substances in schedule I because they pose an imminent hazard to the public safety, it would be contrary to the public interest to delay implementation of the temporary scheduling order. Therefore, this order shall take effect immediately upon its publication. The DEA has submitted a copy of this temporary order to both Houses of Congress and to the Comptroller General, although such filing is not required under the Small Business Regulatory Enforcement Fairness Act of 1996 (Congressional Review Act), 5 U.S.C. 801-808 because, as noted above, this action is an order, not a rule.
Administrative practice and procedure, Drug traffic control, Reporting and recordkeeping requirements.
For the reasons set out above, the DEA amends 21 CFR part 1308 as follows:
21 U.S.C. 811, 812, 871(b), 956(b), unless otherwise noted.
(h) * * *
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing special local regulations for certain waters of the Choptank River. This action is necessary to provide for the safety of life on the navigable waters located in Cambridge, MD, during a power boat racing event on July 28, 2018, and July 29, 2018. This regulation prohibits persons and vessels from entering the regulated area unless authorized by the Captain of the Port Maryland-National Capital Region or the Coast Guard Patrol Commander.
This rule is effective from 8:30 a.m. on July 28, 2018 through 6:30 p.m. on July 29, 2018.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Mr. Ronald Houck, U.S. Coast Guard Sector Maryland-National Capital Region; telephone 410-576-2674, email
On February 18, 2018, The Kent Narrows Racing Association of Chester, MD, notified the Coast Guard that from 10 a.m. until 6 p.m. on July 28, 2018, and July 29, 2018, it will be conducting power boat races in the Choptank River in a cove located between Hambrooks Bar and the shoreline at Cambridge, MD. Details of the proposed event were provided to the Coast Guard at a meeting on April 10, 2018, where the sponsor changed the start time to 9 a.m. to allow for additional races. In response, on May 21, 2018, the Coast Guard published a notice of proposed rulemaking (NPRM) entitled “Special Local Regulation; Choptank River, Cambridge, MD” (83 FR 23395). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this high-speed power boat racing event. During the comment period that ended June 20, 2018, we received no comments.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 33 U.S.C. 1233. The Captain of the Port (COTP) Maryland-National Capital Region has determined that potential hazards associated with the power boat racing event will be a safety concern for anyone intending to participate in this event or for vessels that operate within specified waters of the Choptank River at Cambridge, MD. The purpose of this rule is to protect marine event participants, spectators and transiting vessels on specified waters of the Choptank River before, during, and after the scheduled event.
As noted above, we received no comments on our NPRM published May 21, 2018. There are no substantive changes in the regulatory text of this rule from the proposed rule in the NPRM.
This rule establishes a special local regulation to be enforced from 8:30 a.m. until 6:30 p.m. on July 28, 2018 and July 29, 2018. The regulated area covers all navigable waters of the Choptank River and Hambrooks Bay bounded by a line connecting the following coordinates: Commencing at the shoreline at Long Wharf Park, Cambridge, MD, at position latitude 38°34′30″ N, longitude 076°04′16″ W; thence east to latitude 38°34′20″ N, longitude 076°03′46″ W; thence north across the Choptank River along the Senator Frederick C. Malkus, Jr. (US-50) Memorial Bridge, at mile 15.5, to latitude 38°35′30″ N, longitude 076°02′52″ W; thence west along the shoreline to latitude 38°35′38″ N, longitude 076°03′09″ W; thence north and west along the shoreline to latitude 38°36′42″ N, longitude 076°04′15″ W; thence southwest across the Choptank River to latitude 38°35′31″ N, longitude 076°04′57″ W terminating at the Hambrooks Bay breakwall. This rule provides additional information about designated areas within the regulated area, including a “Race Area,” “Spectator Area” and “Buffer Zone,” and the restrictions that apply to mariners. The duration and enforcement of the regulated area is intended to insure the safety of vessels and these navigable waters before, during, and after the scheduled 9 a.m. through 6 p.m. high-speed power boat racing event. Persons and vessels desiring to transit, moor, or anchor within the regulated area must obtain authorization from COTP Maryland-National Capital Region or Coast Guard Patrol
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule 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 and duration of the regulated area. Vessel traffic will be able to safely transit through the regulated area, which will impact a small designated area of the Choptank River for 20 hours. The Coast Guard will issue a Broadcast Notice to Mariners via marine band radio VHF-FM channel 16 about the status of the regulated area. Moreover, the rule allows vessel operators to request permission to enter, remain within, or transit through the regulated area for the purpose of either safely entering the “Spectator Area” or transiting the regulated area at the minimum speed necessary to maintain a safe course that minimizes wake near the race course, and if deemed safe to do so by the PATCOM.
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 received no comments from the Small Business Administration on this rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section 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 rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
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 Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a special local regulation lasting for 20 hours. This category of marine event water activities includes but is not limited to sail boat regattas, boat parades, power boat racing, swimming events, crew racing, canoe and sail board racing. It is categorically excluded from further review under paragraph L61 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Memorandum for Record for Categorically Excluded Actions 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
Marine safety, Navigation (water), Reporting and recordkeeping requirements, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows:
33 U.S.C. 1233; 33 CFR 1.05-1.
(a)
(2)
(3)
(4)
(5)
(b)
(1)
(2)
(3)
(4)
(c)
(2) The operator of any vessel in the regulated area shall:
(i) Stop the vessel immediately when directed to do so by any Official Patrol and then proceed only as directed.
(ii) All persons and vessels shall comply with the instructions of the Official Patrol.
(iii) When authorized to transit the regulated area, all vessels shall proceed at the minimum speed necessary to maintain a safe course that minimizes wake near the race course.
(3) The Coast Guard Patrol Commander may terminate the event, or the operation of any participant, at any time it is deemed necessary for the protection of life or property.
(4) The Race Area is an area within the regulated area defined in paragraph (b)(2) of this section. The actual placement of the race course will be determined by the marine event sponsor but must be located within the designated boundaries of the Race Area. Only participants and official patrol vessels are allowed to enter the Race Area.
(5) The Buffer Zone is an area that surrounds the perimeter of the Race Area within the regulated area defined in paragraph (b)(3) of this section. The purpose of a Buffer Zone is to minimize potential collision conflicts with participants and spectators or nearby transiting vessels. This area provides separation between the Race Area and Spectator Area or other vessels that are operating in the vicinity of the regulated area defined in paragraph (b)(1) of this section. Only participants and official patrol vessels are allowed to enter the Buffer Zone.
(6) The Spectator Area is an area described by a line bounded by coordinates provided in latitude and longitude that outlines the boundary of a spectator area within the regulated area defined in paragraph (b)(4) of this section. All vessels within the Spectator Area shall be anchored or operate at a no-wake speed while transiting within the Spectator Area.
(7) The Coast Guard Patrol Commander and official patrol vessels enforcing this regulated area can be contacted on marine band radio VHF-FM channel 16 (156.8 MHz) and channel 22A (157.1 MHz). Persons and vessels desiring to transit, moor, or anchor within the regulated area must obtain authorization from Captain of the Port Maryland-National Capital Region or Coast Guard Patrol Commander. The Captain of the Port Maryland-National Capital Region can be contacted at telephone number 410-576-2693 or on Marine Band Radio, VHF-FM channel 16 (156.8 MHz). The Coast Guard Patrol Commander can be contacted on Marine Band Radio, VHF-FM channel 16 (156.8 MHz).
(8) The Coast Guard will publish a notice in the Fifth Coast Guard District Local Notice to Mariners and issue a marine information broadcast on VHF-FM marine band radio.
(d)
(e)
Coast Guard, DHS.
Notice of deviation from drawbridge regulation.
The Coast Guard has issued a temporary deviation from the operating schedule that governs the US40-322 (Albany Avenue) Bridge across the New Jersey Intracoastal Waterway (NJICW) (Inside Thorofare), mile 70.0, at Atlantic City, NJ. The deviation is necessary to accommodate the free movement of pedestrians and vehicles during the 8th Annual Atlantic City Triathlon. This deviation allows the bridge to remain in the closed-to-navigation position.
The deviation is effective from 6 a.m. to 1 p.m. on August 11, 2018.
The docket for this deviation, [USCG-2018-0610] is available at
If you have questions on this temporary deviation, call or email Mr. Martin Bridges, Bridge Administration Branch Fifth District, Coast Guard, telephone 757-398-6422, email
The event director, DelMoSports, LLC, with approval from the New Jersey Department of Transportation, who owns and operates the US40-322 (Albany Avenue) Bridge across the NJICW (Inside Thorofare), mile 70.0, at Atlantic City, NJ, has requested a temporary deviation from the current operating regulations. This temporary deviation is necessary to accommodate the free movement of pedestrians and vehicles during the 8th Annual Atlantic City Triathlon. The bridge is a double bascule bridge and has a vertical clearance in the closed position of 10 feet above mean high water.
The current operating schedule is set out in 33 CFR 117.733 (f). Under this temporary deviation, the bridge will be maintained in the closed-to-navigation position from 6 a.m. to 1 p.m. on August 11, 2018. The NJICW (Inside Thorofare) is used by recreational vessels. The Coast Guard has carefully coordinated the restrictions with waterway users in publishing this temporary deviation.
Vessels able to pass through the bridge in the closed position may do so at anytime. The bridge will be able to open for emergencies and there is no immediate alternate route for vessels unable to pass through the bridge in the closed position. The Coast Guard will also inform the users of the waterway through our Local and Broadcast Notice to Mariners of the change in operating schedule for the bridge so that vessels can arrange their transits to minimize any impacts caused by the temporary deviation.
In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce the safety zone for the Pittsburgh Steelers Fireworks to provide for the safety of persons, vessels, and the marine environment on the navigable waters of the Allegheny, Ohio, and Monongahela Rivers during this event. Our regulation for marine events within the Eighth Coast Guard District identifies the regulated area for this event in Pittsburgh, PA. During the enforcement periods, entry into this zone is prohibited unless authorized by the Captain of the Port Marine Safety Unit Pittsburgh or a designated representative.
The regulations in 33 CFR 165.801, Table 1, Line 57, will be enforced from 7 p.m. through 11 p.m. on August 19, 2018, September 30, 2018, and November 8, 2018.
If you have questions about this notice of enforcement, call or email Petty Officer Jennifer Haggins, Marine Safety Unit Pittsburgh, U.S. Coast Guard; telephone 412-221-0807, email
The Coast Guard will enforce a safety zone for the Steelers fireworks in 33 CFR 165.801, Table 1, Line 57, from 7 p.m. through 11 p.m. on each of three evenings on August 19, 2018, September 30, 2018, and November 8, 2018. This action is being taken to provide for the safety of persons, vessels, and the marine environment on the navigable waters of the Allegheny, Ohio, and Monongahela Rivers during this event. Our regulation for marine events within the Eighth Coast Guard District, § 165.801, specifies the location of the safety zone for the Steelers fireworks, which covers a less than one-mile stretch of the Ohio, Allegheny, and Monongahela Rivers. Entry into the safety zone is prohibited unless authorized by the Captain of the Port Marine Safety Unit Pittsburgh (COTP) or a designated representative. Persons or vessels desiring to enter into or pass through the area must request permission from the COTP or a designated representative. They can be reached on VHF FM channel 16. If permission is granted, all persons and vessel shall comply with the instructions of the COTP or designated representative.
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 Chicago Air and Water Show on a portion of Lake Michigan, from August 16, 2018 through August 19, 2018. This action is intended to ensure the safety of life on the navigable waterway immediately before, during, and after this event. During the enforcement period listed below, no vessel may transit this safety zone without approval from the Captain of the Port Lake Michigan or a designated representative.
The regulations in 33 CFR 165.929 will be enforced for the location listed in item (f)(9) in Table 165.929 to 33 CFR 165.929 from 11 a.m. until 4 p.m. on August 16, 2018; and from 8 a.m. to 4 p.m. from August 17, 2018 through August 19, 2018.
If you have questions about this notice of enforcement, call or email LT John Ramos, Waterways Management Division, Marine Safety Unit Chicago, at 630-986-2155, email address
The Coast Guard will enforce the Safety Zone; Chicago Air and Water Show listed as item (f)(9) in Table 165.929 of 33 CFR 165.929. Section 165.929 lists many annual events requiring safety zones in the Captain of the Port Lake Michigan zone. This safety zone encompasses all waters and adjacent shoreline of Lake Michigan and Chicago Harbor bounded by a line drawn from 41°55.900′ N at the shoreline, then east to 41°55.900′ N, 087°37.200′ W, then southeast to 41°54.000′ N, 087°36.000′ W, then southwestward to the northeast corner of the Jardine Water Filtration Plant, then due west to the shore. This safety zone will be enforced from August 16, 2018 through August 19, 2018, from 11 a.m. until 4 p.m. on August 16, 2018; and from 8 a.m. to 4 p.m. from August 17, 2018 through August 19, 2018.
All vessels must obtain permission from the Captain of the Port Lake Michigan, or his or her designated on-scene representative to enter, move within, or exit this safety zone during the enforcement times listed in this notice of enforcement. Requests must be made in advance and approved by the Captain of the Port before transits will be authorized. Approvals will be granted on a case-by-case basis. Vessels and persons granted permission to enter the safety zone shall obey all lawful orders or directions of the Captain of the Port Lake Michigan, or his or her on-scene representative.
This notice of enforcement is issued under authority of 33 CFR 165.929, Safety Zones; Annual events requiring safety zones in the Captain of the Port Lake Michigan zone, and 5 U.S.C. 552(a). In addition to this publication in the
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce the safety zone on Lake Michigan in Chicago Harbor, near the Ohio Street Beach in Chicago, IL on July 21, 2018. This action is necessary and intended to ensure the safety of life and property on navigable waters prior to, during, and immediately after this annual swim 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 regulation in 33 CFR 165.932 will be enforced from 6 a.m. through 11 a.m. on July 21, 2018.
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; Ohio Street Beach Swim Course, Chicago Harbor, Chicago, IL listed in 33 CFR 165.932 from 6 a.m. through 11 a.m. on July 21, 2018 for an annual swim event. This safety zone encompasses all waters bound by a line drawn from 41°53.7767′ N, 087°36.48′ W then North to 41°53.9517′ N, 087°36.505′ W then Northwest to 41°54.1533′ N, 087°36.6933′ W then Southwest to 41°54.065′ N, 087°37.1517′ W then Southeast to 41°53.6033′ N, 087°36.8333′ W then East to 41°53.6317′ N, 087°36.7017′ W and then along the shoreline back to the point of origin (NAD83). 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 in the
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone on Lake Michigan near North Avenue Beach in Chicago, IL. This temporary safety zone is necessary to protect spectators, participants, and vessels from potential hazards associated with a jetpack demonstration. 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.
This rule is effective from 5 p.m. on July 19, 2018 through 12:50 p.m. on July 20, 2018.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions about this rule, call or email LT John Ramos, Marine Safety Unit Chicago, U.S. Coast Guard; telephone (630) 986-2155, or email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because doing so would be impracticable. The Coast Guard did not receive the final details of this jetpack demonstration in time to publish an NPRM. As such, it is impracticable to publish an NPRM because we lack sufficient time to provide a reasonable comment period and then consider those comments before issuing the rule.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. A jetpack demonstration will be conducted at North Avenue Beach in Chicago, IL on July 19 from 5 p.m. through 6:15 p.m. on July 19, 2018; with a rain date of July 20, 2018 from 11:45 a.m. to 12:50 p.m. The COTP has determined that the potential hazards associated with the jetpack demonstration pose a significant risk to public safety and property. Specifically, hazards include potential for collision with spectators, fires and/or explosions from mechanical malfunctions. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while the jetpack demonstration takes place.
This rule establishes a safety zone from 5 p.m. through 6:15 p.m. on July 19, 2018; with a rain date of July 20, 2018 from 11:45 a.m. through 12:50 p.m. The safety zone will encompass all navigable waters of Lake Michigan near North Avenue Beach, bounded by a line drawn from the shore at 41°55.008 N, 087°37.564 W, then northeast to 41°55.068 N, 087°37.480 W, then southeast to 41°54.899 N, 087°37.151 W, then southwest back to the shore at 41°54.826 N, 087°37.214 W. The duration of the zone is intended to protect personnel and vessels in these navigable waters during the jet pack demonstration. 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. The Captain of the Port or a designated on-scene representative may be contacted via VHF Channel 16 or at (414) 747-7182.
We developed this rule after considering numerous statutes and Executive Orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive Orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule 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.
We conclude that this rule is not a significant regulatory action because we anticipate that it will have minimal impact on the economy, will not interfere with other agencies, will not adversely alter the budget of any grant or loan recipients, and will not raise any novel legal or policy issues. The safety zone created by this rule will be relatively small and enforced on one day from 5 p.m. through 6:15 p.m. on July 19, 2018; with a rain date of July 20, 2018 from 11:45 a.m. through 12:50 p.m. Under certain conditions, moreover, vessels may still transit through the safety zone when permitted by the Captain of the Port Lake Michigan.
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.
This safety zone will not have a significant economic impact on a substantial number of small entities for the reasons cited in the
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
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
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 Directive 023-01, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves establishment of a safety zone on Lake Michigan near North Avenue Beach in Chicago, IL that will last between one and two hours and will prohibit entry into a designated area. 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 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
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping 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)
(2) This safety zone is closed to all vessel traffic, except as may be permitted by the Captain of the Port Lake Michigan or a designated on-scene representative.
(3) The “on-scene representative” of the Captain of the Port Lake Michigan is any Coast Guard commissioned, warrant or petty officer who has been designated by the Captain of the Port Lake Michigan to act on his or her behalf.
(4) Vessel operators desiring to enter or operate within the safety zone shall contact the Captain of the Port Lake Michigan or an on-scene representative to obtain permission to do so. The Captain of the Port Lake Michigan or an on-scene representative may be contacted via VHF Channel 16 or at (414) 747-7182. Vessel operators given permission to enter or operate in the safety zone must comply with all directions given to them by the Captain of the Port Lake Michigan, or an on-scene representative.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for navigable waters of the San Joaquin River due to an unstable, partially submerged barge with hull number PFE-LB444. The temporary safety zone is needed to protect personnel, vessels, and the marine environment from potential hazards created by the barge and associated recovery efforts. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port San Francisco.
This rule is effective without actual notice from July 10, 2018 until July 31, 2018. For the purposes of enforcement, actual notice will be used from the July 3, 2018 until July 10, 2018.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Lieutenant Junior Grade Emily K. Rowan, U.S. Coast Guard Sector San Francisco; telephone 415-399-7443, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because of the emergent nature of the situation. Notice and comment procedures would be impracticable because immediate action is needed protect personnel, vessels, and the marine environment from potential hazards associated with the barge and associated recovery efforts.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Department of Homeland Security Delegation No. 0170.1, which collectively authorize the Coast Guard to establish safety zones. The Captain of the Port San Francisco (COTP) has determined that potential hazards associated with the barge and associated recovery efforts will be a safety concern for anyone within a 90-yard radius of the barge. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone.
This rule establishes a temporary safety zone from July 3, 2018 through July 31, 2018. The safety zone will cover all navigable waters within 90 yards of the unstable barge and associated recovery efforts centered in approximate position 37° 59′41.88″ N, 121° 25′8.88″ W (NAD 83). The effect of the temporary safety zone is intended to protect personnel, vessels, and the marine environment in these navigable waters from potential hazards associated with the barge and associated recovery efforts. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule 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 limited duration and narrowly tailored geographic area of the safety zone. Although this rule restricts access to the waters encompassed by the safety zone, the effect of this rule will not be significant because the local waterway users will be notified via public Broadcast Notice to Mariners to ensure the safety zone will result in minimum impact. The entities most likely to be affected are waterfront facilities, commercial vessels, and pleasure craft engaged in recreational activities.
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.
This rule may affect the following entities, some of which may be small entities: owners and operators of waterfront facilities, commercial vessels, and pleasure craft engaged in recreational activities and sightseeing, if these facilities or vessels are in the vicinity of the safety zone at times when this zone is being enforced. This rule will not have a significant economic impact on a substantial number of small entities for the following reasons: (i) This rule will encompass only a small portion of the waterway for a limited period of time, and (ii) the maritime public will be advised in advance of these safety zones via Broadcast Notice to Mariners.
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
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
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 Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves safety zone of limited size and duration. It is categorically excluded from further review under Categorical Exclusion L60(d) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A 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
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping 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) The safety zone is closed to all vessel traffic, except as may be permitted by the COTP or a designated representative.
(3) Vessel operators desiring to enter or operate within the safety zone must contact the COTP or a designated representative to obtain permission to do so. Vessel operators given permission to enter or operate in the safety zone must comply with all directions given to them by the COTP or a designated representative. Persons and vessels may request permission to enter the safety zones on VHF-23A or through the 24-hour Command Center at telephone (415) 399-3547.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for navigable waters within a 280-foot radius of the launch site located at Hamburg Beach, Hamburg, NY. This safety zone is intended to restrict vessels from portions of Lake Erie
This rule is effective from 9:45 p.m. until 10:45 p.m. on July 28, 2018.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email LCDR Michael Collet, Chief Waterways Management Division, U.S. Coast Guard; telephone 716-843-9322, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the event sponsor did not submit notice to the Coast Guard with sufficient time remaining before the event to publish an NPRM. Delaying the effective date of this rule to wait for a comment period to run would be impracticable and contrary to the public interest by inhibiting the Coast Guard's ability to protect spectators and vessels form the hazards associated with a fireworks display.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Buffalo (COTP) has determined that a fireworks display presents significant risks to the public safety and property. Such hazards include premature and accidental detonations, dangerous projectiles, and falling or burning debris. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while the fireworks display takes place.
This rule establishes a safety zone on July 28, 2018, from 9:45 p.m. until 10:45 p.m. The safety zone will encompass all waters of Lake Erie; Hamburg, NY contained within 280-foot radius of: 42°45′59.21″ N, 078°52′41.51″ W.
Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Buffalo or his designated on-scene representative. The Captain of the Port or his designated on-scene representative may be contacted via VHF Channel 16.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule 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 conclusion that this rule is not a significant regulatory action. We anticipate that it will have minimal impact on the economy, will not interfere with other agencies, will not adversely alter the budget of any grant or loan recipients, and will not raise any novel legal or policy issues. The safety zone created by this rule will be relatively small and enforced for a relatively short time. Also, the safety zone has been designed to allow vessels to transit around it. Thus, restrictions on vessel movement within that particular area are expected to be minimal. Under certain conditions, moreover, vessels may still transit through the safety zone when permitted by the Captain of the Port.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section 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-
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
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 Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule establishes a temporary safety zone. 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 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
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping 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.
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(2) This safety zone is closed to all vessel traffic, except as may be permitted by the Captain of the Port Buffalo or his designated on-scene representative.
(3) The “on-scene representative” of the Captain of the Port Buffalo is any Coast Guard commissioned, warrant or petty officer who has been designated by the Captain of the Port Buffalo to act on his behalf.
(4) Vessel operators desiring to enter or operate within the safety zone must contact the Captain of the Port Buffalo or his on-scene representative to obtain permission to do so. The Captain of the Port Buffalo or his on-scene representative may be contacted via VHF Channel 16. Vessel operators given permission to enter or operate in the safety zone must comply with all directions given to them by the Captain of the Port Buffalo, or his on-scene representative.
Environmental Protection Agency (EPA).
Final rule.
This regulation amends existing tolerances for residues of pyroxsulam in or on teff forage, teff grain, teff hay, and teff straw. Interregional Research Project Number 4 (IR-4) requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA).
This regulation is effective July 10, 2018. Objections and requests for hearings must be received on or before September 10, 2018, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2017-0227, is available at
Michael Goodis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at
Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2017-0227 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before September 10, 2018. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2017-0227, by one of the following methods:
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Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
In the
In between the submission of the petition and the publication of this document, tolerances were established in the
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”
Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure consistent with FFDCA section 408(b)(2).
In the
The U.S. registration of teff on pyroxsulam does not change the Agency's previous conclusions about drinking water exposure or residential exposure; therefore, the previous aggregate risk assessment supports the amendment of the teff tolerances. Based on this assessment of potential exposure
For a detailed discussion of the aggregate risk assessments and determination of safety for the proposed tolerances, please refer to the July 5, 2017
An adequate enforcement methodology, Method GRM 04.17, a liquid chromatography with tandem mass spectrometry (LC/MS/MS) method, is available to enforce the tolerance expression.
The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address:
In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.
The Codex has not established a MRL for pyroxsulam.
Therefore, the tolerances for teff commodities in 40 CFR 180.638 are amended by removing the footnote stating “There are no U.S. registrations on teff as of May 8, 2017”.
This action modifies tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), nor is it considered a regulatory action under Executive Order 13771, entitled “Reducing Regulations and Controlling Regulatory Costs” (82 FR 9339, February 3, 2017). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerances in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, 40 CFR chapter I is amended as follows:
21 U.S.C. 321(q), 346a and 371.
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Office of Financial Research, Treasury.
Proposed rule.
The U.S. Department of the Treasury's Office of Financial Research (the “Office”) is requesting comment on a proposed rule establishing a data collection covering centrally cleared transactions in the U.S. repurchase agreement market. This proposed collection will require daily reporting to the Office by covered central counterparties. The Office expects that the Board of Governors of the Federal Reserve System will act as the Office's collection agent, with required data to be submitted directly to the Federal Reserve Bank of New York. The collected data will be used to support the Financial Stability Oversight Council and as inputs to reference rates.
Comments must be received by September 10, 2018.
You may submit comments, identified by [RIN 1505-AC58], by any of the following methods:
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For access to the docket to read background documents or comments received, go to
Patrick Bittner, Senior Counsel, (202) 927-0035,
The Office of Financial Research (“Office”) is requesting comment on a proposed rule establishing a data collection covering centrally cleared transactions in the U.S. repurchase agreement market (“proposed collection”). This proposed collection will require reporting by certain U.S. central counterparties (“CCPs”) for repurchase agreement (“repo”) transactions. This proposed collection will serve two primary purposes: (1) Enhance the ability of the Financial Stability Oversight Council (“Council”) and the Office to identify and monitor risks to financial stability; and (2) support the calculation of certain reference rates. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), the Office is authorized to issue rules and regulations in order to collect and standardize data to support the Council in fulfilling its duties and purposes, such as identifying risks to U.S. financial stability. The Council recommended a permanent collection of repo data in its 2016 annual report to Congress and, as required by law, the Office consulted with the Council on the schedule of collection in September 2016.
The expanded monitoring of the repo market made possible by this proposed collection appropriately helps fulfill the Council's duties and purposes because of this market's crucial role in providing short-term funding and performing other functions for U.S. markets, making it important for financial stability monitoring. The data will also support the calculation of the Secured Overnight Funding Rate (“SOFR”), which was selected by the Alternative Reference Rates Committee (“ARRC”) as its preferred alternative rate to U.S. dollar London Interbank Offered Rate (“LIBOR”), as well as the Broad General Collateral Rate (“BGCR”), helping fulfill
A repo transaction is the sale of assets, combined with an agreement to repurchase the assets on a specified future date at a prearranged price. Repos are commonly used as a form of secured borrowing. The assets underlying the repo are used as collateral to protect the cash provider against the risk that the securities provider fails to repurchase the assets underlying the repurchase agreement. Market participants use repos for many reasons, such as using cash as collateral to borrow securities and to finance securities holdings. Central banks also use repos as an important monetary policy tool.
To protect the cash provider against a decline in the value of the securities subject to repurchase, cash providers typically require over-collateralization from borrowers. In an uncleared bilateral repo, the value of the securities pledged as collateral is discounted, which is referred to as a haircut. In a centrally cleared repo, overcollateralization is accomplished via initial margin. If the market value of the collateral falls during the life of the repo, the cash provider or, if cleared, the clearing firm, has the right to call on its counterparty to deliver additional collateral, known as variation margin, so that the loan remains over-collateralized against future adverse price movements.
Repo transaction documentation specifies the terms, including the types of securities that are acceptable to the cash provider as collateral, and the associated haircuts or initial margin requirements. Repos can be entered into with a range of fixed maturities, though repos are often overnight transactions. For term repos, repo rates can be negotiated on either a fixed or on a floating basis. There are also open tenor repos that do not have a fixed maturity and are instead renewed by mutual agreement.
A stable and well-functioning repo market is critical to U.S. financial markets and the U.S. economy, and thus U.S. financial stability. The repo market is the largest short-term wholesale funding market in the United States. In 2008-09, runs on repos contributed to the financial crisis and helped lead to official sector intervention.
One of the functions repos offer is an alternative to insured deposits that provides similar, though less, liquidity and security. Financial market participants desire low-risk, money-like claims in order to meet demand for access to cash. Money and money-like claims can take a number of forms, including deposits and money market mutual fund investments. Because deposit insurance is capped in the United States, institutions seek repos backed by high-quality assets to place excess cash over the deposit insurance limit. The securities provided in the trade protect the cash provider against counterparty credit risk, while use of overcollateralization provides protection against market risk.
Repo markets can become less effective in providing deposit substitutes in times of market stress.
Just as repos offer cash providers a deposit substitute, they allow cash borrowers to obtain funding in a cost-efficient manner. The monetization of assets achieved via repos offers a source of liquidity to firms that hold securities in inventory. For this reason, repos play an important role in the government securities market, as dealers often use repos to fund their purchases of Treasury securities at auction.
The ability to monetize assets enables firms to engage in maturity transformation, in which a firm funds long-term assets using short-term liabilities. For example, a firm can borrow cash in the repo market with overnight maturity, using the cash
As a result of the maturity mismatch that can arise from the monetization of liquid assets, this function, while a benefit of repos, is also a potential source of fragility. When the repo market is impaired, the ability of securities providers to borrow against their portfolios can be reduced.
Another function of repos is to exchange securities currently held for other securities. This type of transaction allows firms to exchange one asset for another asset, effecting a form of collateral transformation. For example, a firm may want to temporarily exchange lower-quality equity collateral for higher-quality Treasury securities that can be posted as margin. This goal can be accomplished through a pair of repo transactions in which the firm lends the equities in one repo transaction and uses the cash proceeds to borrow Treasury securities in a second repo transaction, effectively transforming the quality of its assets.
Because high-quality collateral can become scarce in times of stress, risks can increase for leveraged firms that rely on repos to obtain margin-eligible securities. Potential difficulties in obtaining high-quality collateral during large market movements that trigger margin increases illustrate how collateral transformation transactions can compound risks. For leveraged firms that engage in strategies in both cash and derivatives markets, the inability to obtain collateral to post margin could undermine their ability to maintain a hedged position, and could force a disorderly unwind. This use of repos can therefore create linkages that can enable the propagation of shocks through securities financing, derivatives, and securities markets.
Repos can be used as a lower-cost way to hedge specific risks than individually buying and selling assets. For example, by allowing underwriters to borrow and short an issuer's outstanding securities, repo markets let underwriters hedge the risk associated with holding newly issued securities that they have underwritten but not yet placed. This decreases the risk to underwriters and may reduce the cost to issuers. The reduced capacity of the repo market to facilitate hedging during periods of market stress can therefore make it more difficult for firms to manage exposures and engage in financial intermediation.
This final function of repos refers to their potential benefits for financial markets as a whole. Repo markets support secondary market efficiency and liquidity in securities markets both by funding dealer inventories and by helping dealers to source securities. Both allow dealers to quote prices on a broader range of securities more readily, thereby increasing asset market liquidity. Additionally, the ability of market participants to use repos to obtain securities for short sales improves pricing efficiency.
Repos allow dealers to quote prices more readily, improving market liquidity in two ways. First, because the repo market helps dealers to more effectively monetize assets on their balance sheet,
The secondary market efficiency and liquidity provided by repos depend on a funding market with relatively stable collateral values. Repos create a tight coupling between funding liquidity and market liquidity. This can create a situation where a negative shock to the value of assets in dealers' portfolios reduces their ability to fund those portfolios. That reduces market liquidity, which can further reduce dealers' ability to fund their portfolios. Market liquidity provided by repos reinforces and is reinforced by the funding liquidity available to traders. Shocks to either market liquidity or funding liquidity can negatively affect both, potentially leading to liquidity spirals.
In the United States, repos are often described as occurring in either the tri-party or bilateral market. However, a more precise way of describing the segments of the U.S. repo market is to distinguish between transactions that are settled on the books of tri-party custodian banks, and repos that are settled on a delivery-versus-payment (“DVP”) basis. There are two market segments that rely on tri-party custodian banks for settlement. First, there is a non-centrally cleared segment, traditionally referred to as “tri-party repo.” Second, there is a centrally cleared segment, consisting of the
In tri-party repo, settlement occurs through a bank that provides collateral valuation, margining, and management services. The settlement bank provides back-office support to both parties in the trade by settling the repo on its books and confirming the terms of the repo, such as eligible collateral and haircuts, are met.
In GCF Repo, qualified members of the Fixed Income Clearing Corporation (“FICC”) Government Securities Division can trade repos on a general collateral basis without revealing their identities to counterparties. FICC, a subsidiary of the Depository Trust & Clearing Corporation (“DTCC”), provides the GCF Repo service. GCF Repo-eligible collateral consists of government and agency securities eligible for settlement via Fedwire, the Federal Reserve's payment and settlement system.
Outside the tri-party custodian banks, FICC operates the DVP Service as an additional repo platform for qualified members of its Government Securities Division.
Finally, there are uncleared bilateral repos, in which counterparties negotiate repo transactions directly with one another. A firm engaging in uncleared bilateral repos must manage the collateral flow, processing, settlement, valuation, and margining itself.
Analysis of data on primary dealer positions suggests that dealers act as cash providers in $3.0 trillion of bilateral repos, including those conducted through the DVP Service.
While some members of the Council have access to certain data about the repo market, the data are insufficient to draw a complete picture of U.S. repo market activity and the associated vulnerabilities. As the financial crisis demonstrated, high-quality information is one of the best tools for identifying the build-up of risk. While improvements have been made, a full picture of all segments of the U.S. repo market is still largely unavailable. This proposed collection will cover certain centrally cleared repo transactions, allowing the Office to gather data on a mandatory basis on what it estimates to be approximately one-quarter of the U.S. repo market.
The Board of Governors of the Federal Reserve System (“Federal Reserve Board”), through the Federal Reserve Bank of New York (“FRBNY”), supervises the two tri-party custodian banks and, on a mandatory basis pursuant to its supervisory authority, collects daily data on transactions in these markets.
A centrally cleared general collateral repo is a transaction that is cleared by
A centrally cleared specific-security repo is a transaction that is cleared by a CCP where the settlement obligation is for a mutually agreed upon specific security, such as a security identified by a particular CUSIP or ISIN.
Unlike the other three repo market segments, the wholly bilateral nature of uncleared repo means there is no central source for comprehensive data. To better understand the bilateral repo market, determine the value of a potential data collection, and gain insights into the design of such a collection, the Office and the Federal Reserve, with input from the Securities and Exchange Commission (“SEC”), conducted a pilot program collecting information on both centrally cleared and uncleared bilateral repo transactions. The pilot collection took place in 2015 and gathered data from a subset of U.S.-based broker dealers. The results and lessons learned were published in January 2016.
LIBOR is a set of widely-used reference rates for different currencies and maturities that is intended to represent the cost of unsecured borrowing in the interbank market. The sustainability of U.S. dollar LIBOR is uncertain. In the wake of scandals arising from misconduct related to LIBOR submissions, banks have become increasingly reluctant to participate in the U.S. dollar LIBOR panel, and market participants generally have trended away from unsecured funding and toward secured funding transactions.
For several years, the Council has recommended the identification of alternative reference rates.
Following a report by the Financial Stability Board, the U.S. effort to identify alternative interest rate benchmarks to U.S. dollar LIBOR was coordinated by the Federal Reserve and supported by the Council.
In December 2017, the Federal Reserve Board announced that the FRBNY, in cooperation with the Office, would begin producing three new reference rates based on repo transaction data during the second quarter of 2018.
The collection of data on the centrally cleared segments of the repo market marks an important step in carrying out the Council's recommendation to expand and make permanent the collection of data on the U.S. repo market. The Council recommended a permanent collection of repo data in its 2016 annual report to improve transparency and risk monitoring which was reiterated in the 2017 annual report.
The collection of transactional data on centrally cleared repos is key to the Council's effective identification and monitoring of emerging threats to the stability of the U.S. financial system. The repo market plays a number of critical functions which have associated vulnerabilities that could give rise to conditions that impair the ability of repo markets to perform. These functions also create linkages between different financial markets and institutions, and therefore potential channels for the propagation of shocks. These vulnerabilities have developed in the past into threats to U.S. financial stability, most notably during the 2007-09 financial crisis.
Despite the vulnerabilities, only one of the four segments of the U.S. repo market, the tri-party repo segment, is currently subject to a mandatory regulatory data collection. Data gaps and the absence of mandatory collections are a significant impediment to the Council's and its member agencies' ongoing ability to monitor developments in the repo market and potential emerging threats to financial stability. The lack of comprehensive data on repos creates material blind spots with regard to the most active short-term funding market in the U.S. financial system. This proposed collection is an important step in eliminating these blind spots.
From a financial stability perspective, it is important to monitor transactions in centrally cleared repo for three reasons. First, repos that are transacted through a CCP on a blind-brokered basis can act as a critical market for repo borrowers that are under stress. Even uncleared repos backed by high-quality collateral can become sensitive to counterparty risk, potentially resulting in a run on the institution's funding.
Second, while counterparty risk is mitigated by the use of CCPs, adverse changes in the value of collateral can propagate shocks arising elsewhere in the financial system to CCP members by impacting their ability to borrow in centrally cleared repo.
Third, while CCPs offer benefits in terms of settlement and risk management, they may also propagate shocks to their members. If a repo CCP were to fail, the repo intermediation capacity of the financial system would be limited during a period of market stress. Even if this risk were judged to be remote, in a circumstance where, as here, there may be only one CCP, disruption of such a critical service could have severe implications. For these reasons, and as noted by the Council in its 2017 annual report, further analysis of risks related to CCPs is appropriate.
This proposed collection is expected to support the calculation of the SOFR, the ARRC's preferred alternative reference rate. The SOFR relies on Treasury repo data from three of the four segments of the U.S. repo market. The Federal Reserve collects data for the tri-party portion through its supervisory authority over the clearing banks. While data on some GCF Repo and DVP Service transactions are available to the FRBNY through a voluntary agreement with DTCC Solutions, a permanent collection of these data will increase confidence that the alternative reference rate's inputs will continue to be available. This viability is important because the long-term success of any alternative reference rate relies on the confidence market participants place in it.
Another benefit of this proposed collection is the ability to require specific data fields from centrally cleared general collateral repo and centrally cleared specific-security repo services for use in reference rate calculation.
Finally, this proposed collection would help ensure the long-term viability of the SOFR and BGCR by including within its scope reporting from certain central counterparties that meet the $50 billion activity-based materiality threshold. This assures rate production will be able to include new comparable transactions in the calculation of the rate as U.S. repo markets evolve in the future. This is of particular importance given that trading in products tied to the new rate might eventually subsume most volume that is currently tied to U.S. dollar LIBOR. This proposed collection will help ensure a continued source of standardized data on centrally cleared repos regardless of potential changes in market structure.
This proposed collection will be used by the Office to improve the Council's and member agencies' monitoring of the U.S. repo market and identifying and assessing potential financial stability risks. The additional daily transaction data this proposed collection will provide will facilitate identification of potential repo market vulnerabilities and will also help identify shifting repo market trends that could be destabilizing or indicate stresses elsewhere in the financial system. Such trends might be reflected in indicators of the volume and price of funding in the repo market at different tenors, differentiated by the type and credit quality of participants and the quality of underlying collateral. Further, analyzing the collateral data from this collection together with other data available to the Office, the Council, and member agencies will enable a clearer understanding of collateral flows in securities markets and potential financial stability risks.
The Office expects, consistent with the Dodd-Frank Act, to share data and information with the Council and member agencies, and such data and information must be maintained with at least the same level of security as used by the Office and may not be shared with any individual or entity without the permission of the Council.
Aggregate or summary data from this proposed collection might be provided to the public to increase market transparency and facilitate research on the financial system, to the extent that intellectual property rights are not violated, business confidential information is properly protected, and the sharing of such information poses no significant threats to the U.S. financial system. The potential sharing of aggregate or summary data collected under this proposed collection would help fulfill a recommendation of the Council to make appropriately aggregated securities financing data available to the public.
The Office may also use the data to sponsor and conduct additional research.
The ability of the Office to collect centrally cleared repo data in this proposed collection derives in part from the authority to promulgate regulations regarding the type and scope of financial transaction and position data from financial companies on a schedule determined by the Director in consultation with the Council.
The Office also has authority to promulgate regulations pursuant to the Office's general rulemaking authority under Dodd-Frank Act section 153, which authorizes the Office to issue rules, regulations, and orders to the extent necessary to carry out certain purposes and duties of the Office.
This proposed collection will support the Council and member agencies by addressing the Council's recommendation to expand and make permanent the collection of data on the U.S. repo market; helping the Council and member agencies identify, monitor, and respond to risks to financial stability; identifying gaps in regulation that could pose risks to U.S. financial stability; and assisting in the production of alternative reference rates.
The Office's statutory authority allows for the collection of transaction or position data from financial companies.
Dodd-Frank Act section 201(b) required the Federal Deposit Insurance Corporation (“FDIC”) to issue a rule establishing the criteria for determining whether a company is predominantly engaged in activities that are financial in nature or incidental thereto for purposes of Title II. The final rule adopted by the FDIC indicates that the determination of whether an activity is financial in nature is based upon Section 4(k) of the Bank Holding Company Act of 1956,
This proposed collection will be the first recurring and mandatory data collection from the Office. The proposed regulatory text includes two sub-parts: the first sets out general requirements for data collection necessary for this proposal and any future Office proposed collections, and the second lists the requirements specifically relevant to this proposed collection. The first regulatory text sub-part cites the statutory authority of the Office to require the submission of information. The second regulatory text sub-part is designed to describe individual collections by the Office. This proposed collection will be the first section under this sub-part. The section includes three tables that describe the data elements that covered reporters will be required to submit. The Office expects to publish filing instructions regarding matters such as data submission mechanics and formatting in connection with any final rule on the Office's website.
This proposed collection will require the submission of transaction information by any CCP whose average daily total open commitments in repo contracts across all services over all business days during the prior calendar quarter is at least $50 billion. “Open commitments” refers to the CCP's gross cash positions, prior to netting. For example, a CCP might clear two trades beginning on the same day with an overnight maturity; in the first trade, Firm A lends $100 million to Firm B in exchange for $100 million of securities, and in the second trade, Firm C lends Firm A $100 million in exchange for $100 million of securities. The total open commitments for the CCP for these two trades is $200 million. A CCP is defined in this proposed collection as “a clearing agency that interposes itself between the counterparties to transactions, acting functionally as the buyer to every seller and the seller to every buyer.”
As noted above, this proposed collection establishes a $50 billion volume threshold for determining whether a CCP is a covered reporter and is therefore required to report. The Office believes the proposed $50 billion activity-based threshold indicates sufficient volume for the CCP to be considered a material CCP in the repo market. One of the benefits of a CCP is the netting it provides to clearing members, which increases with the size of the CCP's services. As a result, CCPs in a given market tend to be few in number and large.
While the Office understands that there is only one reporter currently covered by this proposed collection's scope, any other CCP would be required to start submitting data under this rule beginning on the first business day of the third calendar quarter after the calendar quarter in which the CCP meets the $50 billion activity-based materiality threshold. For example, if a CCP were to surpass the threshold beginning with the quarter ending on March 31 of a given year, that CCP would become subject to the reporting requirements of the rule on the first business day of the calendar quarter that begins after two intervening calendar quarters—in this case, October 1.
A covered reporter whose volume falls below the $50 billion threshold for at least four consecutive calendar quarters will have its reporting obligations cease. For example, if a covered reporter ceases to meet the $50 billion threshold beginning with the quarter ending June 30 of a given year, and remains below the $50 billion threshold in each of the following three quarters (in this example, through the quarter ending March 31 of the following year), its reporting obligations would cease as of April 1.
This proposed collection will require CCPs that meet the aforementioned repo volume thresholds to report all repos they clear. Given the existing differences between how general collateral and specific-security trades are reported to repo clearing services, this proposed collection separates the reporting information required into distinct schedules for each type of centrally cleared repo service.
This proposed collection has three schedules: the first covers details on general collateral trades, the second covers details on the securities used to collateralize net positions in general collateral repo, and the third covers specific-security trades. Each schedule is tailored to capture specific information regarding covered transactions in a manner that the Office believes reflects the data exchanged with CCPs in the ordinary course of business. The required data elements in these schedules are listed in Tables 1, 2, and 3 of Section § 1610(c) of the proposed regulatory text. Each table lists each required element and a brief description of that element. Below is a description of the general categories of information covered by the collection and further detail on certain key data fields.
The Office's published brief on the interagency bilateral repo pilot collection noted difficulties in working with the data due to the absence of standardized counterparty information.
The Office proposes to require reporting of an LEI. The LEI reported must be properly maintained, meaning it must be kept current and up to date according to the standards implemented by the GLEIF. The Office believes that while requiring the LEI may result in some additional compliance costs, doing so is reasonable and appropriate due to the added clarity and substantial benefit for the monitoring it provides and rate production. Based on a review of the public membership lists of counterparties to the one expected covered reporter, the Office estimates that under the proposed collection, approximately 800 counterparties will need to acquire an LEI at a cost of approximately $100 per instance initially and approximately $50 on an annual basis thereafter, for a total aggregate cost of $80,000 to market participants the first year and $40,000 annually thereafter. Each legal entity transacting with a covered reporter will be required to obtain only one LEI regardless of the number of reported transactions. The Office recognizes that the LEI acquisition cost may be only a portion of the total compliance cost for repo counterparties, and that firms may incur additional costs stemming from the inclusion of the LEI in their trade reporting systems. In this regard, there are two viable options for including an LEI in the data fields. The first option is to amend the messaging system to include the LEI. The second option is to add LEIs of reporting entities and counterparties after the transactions take place but prior to submission of data to the Office. While this second option would require fewer parties to update their systems, it is possible that market participants may desire access to the LEIs of their counterparties for risk management purposes, thus making the first option preferable to member firms. Either option would be acceptable to the Office.
Identification of the entities involved in a covered repo transaction is important to enhance the ability of the Council and the Office to identify risks to U.S. financial stability by allowing it to understand repo market participants' exposures, concentrations, and network structures. This proposed collection requires the submission of the LEI of each covered reporter, direct clearing member, counterparty, and broker involved in a covered transaction.
Mandatory adoption of the LEI will also benefit firms and regulators by improving the ability to combine repo information with other information necessary to monitor system or firm risk. This is particularly so given that more than 1 million firms have obtained an LEI and are therefore becoming capable of obtaining these benefits. The aggregate cost savings for the financial service industry upon broader adoption of the LEI have been estimated in the hundreds of millions of dollars.
This proposed collection includes reporting fields for the LEIs of the direct clearing members that are parties to a covered transaction. This proposed collection also includes reporting fields for the LEIs of any cash or securities provider that is a counterparty to the transaction. For these fields, respondents should indicate the LEI of the indirect clearing member if one exists, and otherwise the LEI of the direct clearing member, that has provided cash or securities. When a registered broker is a counterparty to a transaction, it should be listed both as the broker and as a cash provider or securities provider.
Transaction-level data coupled with counterparty information permit an understanding of detailed exposures among firms and across asset markets. Transaction-level data are also necessary inputs to calculate the SOFR and BGCR. Transaction-level data will require a unique identifier for each transaction. This identifier must be assigned by the covered reporter and never re-used for another transaction over the life of this proposed collection. The transaction identifier must be persistent throughout the life cycle of the transaction, regardless of any subsequent amendments to the transaction, such as substitutions of collateral. Because CCPs currently must track the life cycle of each trade for settlement purposes, some type of unique identification scheme already exists. Any CCP required to report under this rule would be required to submit its own unique, persistent transaction identifier. As an alternative to a reporter-generated transaction identifier, the Office encourages, but is not requiring, respondents to coordinate with their counterparties to adopt and report using the Unique Transaction Identifier.
In all cases where securities identifiers are used, the type of identifier must be reported, such as ISIN or CUSIP. General collateral trade submissions must contain information on the security asset class in order to identify the correct transactions for rate production. This field must consist of an identifier that corresponds to a set of agreed-upon securities. Collateral delivered against net exposures between firms and CCPs must also be identified using a specific security identifier. This provides information on how CCP exposures are collateralized, as well as the quantity of securities that have been delivered against net exposures. The general collateral trades also must indicate whether the securities were delivered to the CCP against a net security delivery obligation or received from the CCP as collateral against a net cash loan.
Reporting on specific-security repos will require a security identifier as well as information on the quantity of securities delivered against a position, and whether substitution of collateral is permitted. Knowing the quantity of securities delivered will help determine levels of over-collateralization in the market and the flow of securities as firms engage in security transformation and acquire specific securities for delivery or sale. Indicating whether substitution of collateral is allowed may indicate the motivation for a trade. In the case of transactions allowing collateral substitution, covered reporters are required to supply an identifier indicating the securities that are acceptable to the cash provider as substitutes under the repo for the initially pledged collateral.
This proposed collection will require information on the start and end dates of transactions; the date that each transaction was agreed to; whether a trade has optionality; and, for repos that are open or have optionality, the first possible maturity of the transaction. Existing CCPs do not presently allow for optionality in repos or for open transactions, but if offered in the future, these features would be important to capture.
There are a number of proposed fields regarding date and tenor information. The agreement timestamp is the date and time on which a covered transaction was agreed to. This field is critical for differentiating same-day-start trades from forward-settling trades. The information is essential to understanding how a transaction is priced and determining whether the transaction should be included in an alternative reference rate. The start date is the date on which a settlement obligation related to the exchange of cash and securities for a covered transaction first exists. The match timestamp refers to the time and date on which the covered transaction is matched by the covered reporter. The end date refers to the date on which the cash providers and securities providers to the covered transaction are obliged to return the cash and securities.
For an open trade, no end date is to be specified, and the optionality field must indicate that the transaction has an open maturity. The minimum maturity field in this case must be used to indicate the next date that the interest rate is to be reset.
For repos with optionality, the end date for a transaction must continue to be specified as the date that the transaction would terminate if no option were exercised. The optionality field indicates how the maturity of a transaction can be changed after initial agreement. Minimum maturity in this case refers to the earliest possible date on which the parties could be obliged to return the cash and securities, taking optionality into account.
Observation days consist of all days on which a covered reporter accepts and processes covered transactions. For every observation day, covered reporters are required to submit a file of all outstanding transactions to the Office's collection agent by 6:00 a.m. Eastern time the following business day.
The principal amount in the centrally cleared general collateral trades schedule is the amount of cash borrowed or lent. This schedule also requires information on the agreed-upon rate for the trade, which is the interest rate at which the cash provider agrees to lend to the securities provider. This rate must be expressed as the annualized rate based on an actual/360-day count.
The securities quantity field in the general collateral net exposure schedule for the general collateral repo collection and the specific-security trades schedule is defined as the principal amount or par value of the securities pledged in a repo transaction.
The specific-security trades schedule includes four fields on the exchange of cash in these repo transactions. Information is required on the amount of cash exchanged by the cash and securities providers at the initiation and close of the trade. This schedule also requires information on the rates reported by the cash and securities providers.
The securities value field in the general collateral net exposure schedule requires the reporting of the market value of the securities pledged, inclusive of accrued interest. The market value of securities is, in combination with the identifier, important for understanding how CCP exposures are collateralized.
The Office intends to require submission through a collection agent. The Office believes this approach will decrease the costs of compliance for covered reporters and allow data reporting to commence sooner than would otherwise be possible. The Office expects that the Federal Reserve Board will act as the Office's collection agent, with required data to be submitted directly by covered reporters to the FRBNY. The FRBNY will transmit collected data to the Office.
Additionally, the Office expects the FRBNY will have access to the reported data for purposes of the daily SOFR and BGCR rate production. To produce this alternative reference rate calculation, data on covered transactions must be submitted by respondents to the FRBNY no later than 6:00 a.m. Eastern time on the business day following the transaction. The submission process will allow for the secure, automated transmission of files. The Office expects that the final rule will go into effect 60 days after its publication in the
The collection of information contained in this proposed collection has been submitted to the Office of Management and Budget (“OMB”) in accordance with the Paperwork Reduction Act of 1995 (“PRA”).
The proposed collection establishes the permanent collection of certain information on repo transactions and is a “collection of information” pursuant to the PRA. Any collection of information addressed to all or a substantial majority of an industry is presumed to involve 10 or more covered reporters.
The Office anticipates that this proposed collection will require submission by one covered reporter, which will be required to make a general collateral and specific-security submission daily in accordance with the tables in the proposed regulatory text. The Office anticipates an annual burden of 1,512 hours per covered reporter. This figure is arrived at by estimating the daily reporting time to be approximately 3 hours for each general collateral and specific-security submission, multiplied by 2 to reflect both types of submissions by the covered reporter, and multiplying that figure by an average of 252 business days in a year, the typical number of days per year that do not fall either on weekends or on holidays widely observed by the market.
To estimate hourly wages, the Office used data from the May 2016 Bureau of Labor Statistics Occupational Employment Statistics for credit intermediation and related activities (NAICS 522000). For hourly compensation, a figure of $75 per hour was used, which is an average of the 90th percentile wages in seven different categories of employment (compliance officers, accountants and auditors, lawyers, management occupations, financial analysts, software developers, and statisticians), plus an additional 32 percent to cover subsequent wage gains and non-wage benefits, which yields an estimate of $99 per hour.
Daily submission containing both general collateral transactions (12 CFR 1610.10(c)(3), (4)) and specific security trades (12 CFR 1610.10(c)(5)).
In addition to recurring reporting costs, the Office anticipates the covered reporter will experience one-time initial start-up costs to account for data management systems and software, operations, and alignment of reporting schedules for ease of data transmission. The estimate of these initial costs is 2,500 hours for the two general collateral schedules, and 2,500 hours for the specific-security schedule, per covered reporter. Because the Office anticipates one covered reporter submitting both the general collateral schedules and the specific-security schedule, the estimated initial start-up cost of required reporting for both submissions is $495,000.
The Office invites comments on the following: (a) Whether the proposed collection of information is necessary for the proper performance of the Office, including whether the information would have practical utility; (b) the accuracy of the estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information required to be maintained; (d) ways to minimize the burden of the required collection of information, including through the use of automated collection techniques or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to report the information.
Congress enacted the Regulatory Flexibility Act (the “RFA”) to address concerns related to the effects of agency rules on small entities.
As discussed above, this proposed collection will only apply to CCPs for repos whose average daily total open commitments in repo contracts across all services over the prior calendar quarter is at least $50 billion. Currently, under this scope, this proposed collection would apply only to one entity, whose corporate parent's total consolidated assets were $39 billion as of March 31, 2018.
Under regulations issued by the Small Business Administration, a “small entity” includes those firms within the “Finance and Insurance” sector with asset sizes that vary from $7.5 million in assets to $550 million or less in assets.
Pursuant to the Regulatory Flexibility Act, 5 U.S.C. 605(b), it is hereby certified that this proposed collection will not have a significant economic impact on a substantial number of small entities.
The Office has sought to present this proposed collection in a simple and straightforward manner. The Office invites comments on how to make this proposal, the regulatory text, or the reporting schedules easier to understand. The Office specifically invites comments on the following questions:
Confidential business information, Economic statistics, Reference rates, Repurchase agreements, Clearing, Central counterparty, Data collection.
12 U.S.C. 5343 and 5344
The collections under this part are made pursuant to the authority contained in 12 U.S.C. 5343(a) and (c)(1) and 5344(b).
(1) Regulatory Oversight Committee means the Regulatory Oversight Committee (of the Global LEI System), whose charter was set forth by the Finance Ministers and Central Bank Governors of the Group of Twenty and the Financial Stability Board, or any successor thereof; and
(2) Global LEI Foundation means the not-for-profit organization organized under Swiss law by the Financial Stability Board in 2014, or any successor thereof.
The Office will treat any financial transaction data or position data submitted to the Data Center under this part in accordance with the relevant provisions of law, including 12 U.S.C. 5343(b) and 5344(b).
(a)
(b)
(2)
(c)
(2) Covered reporters shall only report trade and collateral information with respect to any repurchase agreement transaction for which there is a current or future delivery obligation as of the file observation date, including forward-starting transactions.
(3) Covered reporters shall submit the following data elements for all general collateral transactions:
(4) Covered reporters shall submit the following data elements on the collateral delivered against net general collateral exposures for all general collateral transactions:
(5) Covered reporters shall submit the following data elements for all specific-security trades:
(d)
(e)
(2) Any central counterparty that becomes a covered reporter after the effective date of this Section shall comply with the reporting requirements pursuant to this Section on the first
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for certain Airbus SAS Model A318 and A319 series airplanes; Model A320-211, -212, -214, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. This proposed AD was prompted by reports of false resolution advisories (RAs) from certain traffic collision avoidance systems (TCASs). This proposed AD would require modification or replacement of certain TCAS processors. We are proposing this AD to address the unsafe condition on these products.
We must receive comments on this proposed AD by August 24, 2018.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this NPRM, contact Honeywell Aerospace, Technical Publications and Distribution, M/S 2101-201, P.O. Box 52170, Phoenix, AZ 85072-2170; phone: 602-365-5535; fax: 602-365-5577; internet:
You may examine the AD docket on the internet at
Steven Dzierzynski, Aerospace Engineer, Avionics and Administrative Services Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7367; fax 516-794-5531.
We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the
We will post all comments we receive, without change, to
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0196, dated October 5, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus SAS Model A318 and A319 series airplanes; Model A320-211, -212, -214, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. The MCAI states:
Since 2012, a number of false TCAS resolution advisories (RA) have been reported by various European Air Navigation Service Providers. EASA has published certification guidance material for collision avoidance systems (AMC 20-15) which defines a false TCAS RA as an RA that is issued, but the RA condition does not exist. It is possible that more false (or spurious) RA events have occurred, but were not recorded or reported. The known events were mainly occurring on Airbus single-aisle (A320 family) aeroplanes, although several events have also occurred on Airbus A330 aeroplanes. Investigation determined that the false RAs are caused on aeroplanes with a Honeywell TPA-100B TCAS processor installed, P/N [part number] 940-0351-001. This was caused by a combination of three factors: (1) Hybrid surveillance enabled; (2) processor connected to a hybrid GPS [global positioning system] source, without a direct connection to a GPS source; and (3) an encounter with an intruder aeroplane with noisy (jumping) ADS-B Out position.
EASA previously published Safety Information Bulletin (SIB) 2014-33 to inform owners and operators of affected aeroplanes about this safety concern. At that time, the false RAs were not considered an unsafe condition. Since the SIB was issued, further events have been reported, involving a third aeroplane.
This condition, if not corrected, could lead to a loss of separation with other aeroplanes, possibly resulting in a mid-air collision.
Prompted by these latest findings, and after review of the available information, EASA reassessed the severity and rate of occurrence of false RAs and has decided that mandatory action must be taken to reduce the rate of occurrence, and the risk of loss of separation with other aeroplanes. Honeywell International Inc. published Service Bulletin (SB) 940-0351-34-0005 [Publication Number D201611000002] to provide instructions for an upgrade, introducing software version 05/01, changing the processor unit to P/N 940-0351-005.
EASA previously issued AD 2017-0091 (later revised) to address the unsafe condition on aeroplanes that had the P/N 940-0351-001 processor installed by Airbus major change or SB. However, part of the fleet had the same P/N installed by STC [supplemental type certificate]. The relevant STC approval holders (see section Remarks of this [EASA] AD for contact details) have been notified and modification instructions (see section Ref. Publications of this [EASA] AD) can be obtained from those companies.
For the reason described above, this [EASA] AD requires modification or
You may examine the MCAI in the AD docket on the internet at
H4 Aerospace has issued Service Bulletin H4ASB009, Issue 1, dated September 18, 2017, and PMV Engineering has issued Service Bulletin AVI-00690-SB-S99-R01, Revision 01, dated October 5, 2017. This service information, provided by the applicable design change FAA STC approval holders, describes the modification or replacement of the Honeywell TPA-100B TCAS processor. These documents are distinct because they apply to different STCs on the airplanes. 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
Honeywell has issued Service Bulletin 940-0351-34-0005, Revision 2, dated December 1, 2017. This service information describes procedures for updating the software of the Honeywell TPA-100B TCAS processor either on the airplane or at an authorized service center.
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of these same type designs.
The applicability of the MCAI includes Airbus SAS models that are modified by certain STCs. However, of these STCs, only H4 Aerospace STC ST03708NY and PMV Engineering STC ST03835NY are validated by the FAA. Although the Airbus SAS Model A320-216 is included in the applicability of the MCAI, it is not included in the applicability of this proposed AD because it is not modified by these two FAA-validated STCs.
We estimate that this proposed AD affects 1209 airplanes of U.S. registry.
We estimate the following costs to comply with this proposed AD:
According to the manufacturer, some of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 this proposed regulation:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator,
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by August 24, 2018.
None.
This AD applies to the Airbus SAS airplanes identified in paragraphs (c)(1) through (c)(4) of this AD, certificated in any category, if modified by H4 Aerospace supplemental type certificate (STC) ST03708NY (
Air Transport Association (ATA) of America Code 34, Navigation.
This AD was prompted by reports of false resolution advisories (RAs) from certain traffic collision avoidance systems (TCASs). We are issuing this AD to address the occurrence of false RAs from the TCAS, which could lead to a loss of separation from other airplanes, possibly resulting in a mid-air collision.
Comply with this AD within the compliance times specified, unless already done.
For the purposes of this AD, an affected TCAS processor is defined as a Honeywell TPA-100B TCAS processor having part number (P/N) 940-0351-001.
Within 12 months after the effective date of this AD: Update the software of the affected TCAS processor and change the part number to P/N 940-0351-005, or replace the affected TCAS processor with a TPA-100B TCAS processor P/N 940-0351-005, in accordance with the Accomplishment Instructions of H4 Aerospace Service Bulletin H4ASB009, Issue 1, dated September 18, 2017; or PMV Engineering Service Bulletin AVI-00690-SB-S99-R01, Revision 01, dated October 5, 2017, as applicable.
Guidance for accomplishing the actions required by paragraph (h) of this AD can be found in Honeywell Service Bulletin 940-0351-34-0005, Revision 2, dated December 1, 2017.
After modification or replacement of the TCAS processor as required by paragraph (h) of this AD, no person may install on that airplane an affected TCAS processor, as defined in paragraph (g) of this AD.
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2017-0196, dated October 5, 2017, for related information. This MCAI may be found in the AD docket on the internet at
(2) For more information about this AD, contact Steven Dzierzynski, Aerospace Engineer, Avionics and Administrative Services Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7367; fax 516-794-5531.
(3) For service information identified in this AD, contact Honeywell Aerospace, Technical Publications and Distribution, M/S 2101-201, P.O. Box 52170, Phoenix, AZ 85072-2170; phone: 602-365-5535; fax: 602-365-5577; internet:
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard proposes to establish a special local regulation for the Carolina Boat Bash in Little River Inlet, SC. This action is necessary to ensure safety of life on navigable waters during the Carolina Boat Bash. During the enforcement period, no person or vessel may enter, transit through, anchor in, or remain within the designated area unless authorized by Sector Charleston COTP or a designated representative.
Comments and related material must be received by the Coast Guard on or before August 9, 2018.
You may submit comments identified by docket number USCG-2018-0163 using the Federal eRulemaking Portal at
If you have questions about this proposed rulemaking, call or email Lieutenant Justin Heck, Sector Charleston Waterways Management Division, Coast
On February 23, 2018, the Coast Guard was notified by the Freedom Boat Club/DBC about the Carolina Boat Bash, which will be held on August 18, 2018, and will impact waters of the Little River Inlet, Little River, South Carolina. The legal basis for the proposed rule is the Coast Guard's authority to establish special local regulations is 33 U.S.C. 1233. The purpose of the rule is to ensure safety of life on navigable waters of the United States during the Carolina Boat Bash.
The COTP proposes to establish a special local regulation from 11 a.m. to 6 p.m. on August 18, 2018. The event will consist of live music from two 40' by 20' spud barges. This is expected to be a heavily attended event with an estimated 1200-1400 recreational boats possibly transiting the area.
The proposed special local regulation is necessary to ensure the safety of participants, spectators, and vessels from the hazards associated with the event. The duration of the special local regulation is intended to ensure the safety of event participants, the general public, vessels and navigable waters during the event scheduled time frame. Approximately 1400 vessels are anticipated to transit through the event area during that time frame. No vessel or person would be permitted to enter the marked regulated area without obtaining permission from the COTP or a designated representative. 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.
The economic impact of this proposed rule is not significant for the following reasons: (1) Non-participant persons and vessels may enter, transit through, anchor in, or remain within the regulated area during the enforcement periods if authorized by the COTP or a designated representative; (2) vessels not authorized to enter, transit through, anchor in, or remain within the regulated area may operate in the surrounding areas during the enforcement period; and (3) the Coast Guard will provide advance notification of the special local regulation to the local maritime community by Local Notice to Mariners and Broadcast Notice to Mariners.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities 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.
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
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 special local regulation on one day lasting from 11:00 a.m. to 6:00 p.m., prohibiting traffic from approaching the barges. Normally such actions are categorically excluded from further review under paragraph L 63(b) 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 100 as follows:
33 U.S.C. 1233; 33 CFR 1.05-1.
(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)
Environmental Protection Agency (EPA).
Proposed rule.
The EPA is proposing to determine that the Cross-State Air Pollution Rule Update for the 2008 ozone National Ambient Air Quality Standards (NAAQS) (CSAPR Update) fully addresses certain states' obligations under Clean Air Act (CAA) section 110(a)(2)(D)(i)(I) regarding interstate pollution transport for the 2008 ozone NAAQS. The CSAPR Update, published on October 26, 2016, promulgated Federal Implementation Plans (FIPs) for 22 states in the eastern U.S. In the final CSAPR Update, based on information available at that time, the EPA could not conclude that the rule fully addressed CAA section 110(a)(2)(D)(i)(I) obligations for 21 of the 22 CSAPR Update states. This action proposes a determination that, based on additional information and analysis, the CSAPR Update fully addresses this CAA provision for the 2008 ozone NAAQS for all remaining CSAPR Update states. Specifically, EPA proposes to determine
Comments must be received on or before August 31, 2018.
Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2018-0225, at
If you would like to present oral testimony at the public hearing, please register online at
Brian Fisher, Clean Air Markets Division, Office of Atmospheric Programs, U.S. Environmental Protection Agency, MC 6204M, 1200 Pennsylvania Avenue NW, Washington, DC 20460; telephone number: (202) 343-9633; email address:
This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated. To determine whether your facility is affected by this action, you should carefully examine the applicability provisions in 40 CFR 97.804. If you have questions regarding the applicability of the CSAPR Update to a particular entity, consult the person listed in the
Within this document “we,” “us,” or “our” should be interpreted to mean the U.S. EPA.
The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2018-0225 (available at
In the CSAPR Update, 81 FR 74504 (Oct. 26, 2016), the EPA promulgated FIPs intended to address 22 eastern states' obligations under CAA section 110(a)(2)(D)(i)(I), also known as the “good neighbor provision,” with respect to the 2008 ozone NAAQS. The good neighbor provision requires upwind states to control their emissions that impact air quality problems in downwind states. Based on information available when the CSAPR Update was finalized, the EPA was unable to determine at that time that the FIPs fully addressed good neighbor obligations under this NAAQS for 21 of the 22 states. The EPA has subsequently proposed to approve a draft SIP which, if finalized, would fully address the good neighbor obligation for one of these states, Kentucky. In this action, the EPA proposes to determine that, with CSAPR Update implementation, the 20 remaining states' good neighbor obligations for the 2008 ozone NAAQS are fully addressed. In accord with this determination, the EPA would have no further obligation under CAA section 110(c) to establish requirements for power plants or any other emissions sources in these states to further reduce transported ozone pollution under CAA section 110(a)(2)(D)(i)(I) with regard to this NAAQS.
The two states among the 22 CSAPR Update states that are not covered by this action are Tennessee and Kentucky. With respect to Tennessee, the EPA already determined in the final CSAPR Update that implementation of the state's emissions budget would fully eliminate the state's significant contribution to downwind nonattainment and interference with maintenance of the 2008 ozone NAAQS because the downwind air quality problems to which the state was linked were projected to be resolved after implementation of the CSAPR Update. 81 FR 74540. With respect to Kentucky, the EPA has proposed in a separate action to approve the state's draft SIP submittal demonstrating that no additional emissions reductions beyond those required by the CSAPR Update are necessary to address the state's good neighbor obligation with respect to the 2008 ozone NAAQS. 83 FR 17123 (April 18, 2018). See Table I.A-1 for a list of states covered by this proposal.
Ground-level ozone causes a variety of negative effects on human health, vegetation, and ecosystems. In humans, acute and chronic exposure to ozone is associated with premature mortality and a number of morbidity effects, such as asthma exacerbation. In ecosystems, ozone exposure causes visible foliar injury in some plants, decreases growth in some plants, and affects ecosystem community composition.
In this proposed action, consistent with previous rulemakings described in section II.B, the EPA relies on analysis that reflects the regional nature of transported ground-level ozone pollution. Ground-level ozone is not emitted directly into the air, but is a secondary air pollutant created by chemical reactions between nitrogen oxides (NO
Precursor emissions can be transported downwind directly or, after transformation in the atmosphere, as ozone. Studies have established that ozone formation, atmospheric residence, and transport occur on a regional scale (
The EPA concluded in several previous rulemakings (summarized in section II.B) that interstate ozone transport can be an important component of peak ozone concentrations during the summer ozone season and that NO
Studies have found that NO
Mobile sources also account for a large share of the NO
In light of the regional nature of ozone transport discussed herein, and given that NO
The statutory authority for this proposed action is provided by the CAA as amended (42 U.S.C. 7401
Section 110(a)(1) provides that states must make SIP submissions “within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national primary ambient air quality standard (or any revision thereof),” and that these SIP submissions are to provide for the “implementation, maintenance, and enforcement” of such NAAQS.
The EPA has historically referred to SIP submissions made for the purpose of satisfying the applicable requirements of CAA sections 110(a)(1) and 110(a)(2) as “infrastructure SIP” submissions. Section 110(a)(1) addresses the timing and general requirements for infrastructure SIP submissions, and section 110(a)(2) provides more details concerning the required content of these submissions. It includes a list of specific elements that “[e]ach such plan” submission must address.
Section 110(c)(1) requires the Administrator to promulgate a FIP at any time within two years after the Administrator: (1) Finds that a state has failed to make a required SIP submission; (2) finds a SIP submission to be incomplete pursuant to CAA section 110(k)(1)(C); or (3) disapproves
Section 110(a)(2)(D)(i)(I), also known as the “good neighbor provision,” provides the primary basis for this action. It requires that each state SIP shall include provisions sufficient to “prohibit[ ] . . . any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will—(I) contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any [NAAQS].”
The EPA has previously issued four rules interpreting and clarifying the requirements of section 110(a)(2)(D)(i)(I) for states in the eastern United States. These rules, and the associated court decisions addressing these rules, summarized here, provide important guidance regarding the requirements of section 110(a)(2)(D)(i)(I).
The NO
The EPA's next rule addressing the good neighbor provision, Clean Air Interstate Rule (CAIR), was promulgated in 2005 and addressed both the 1997 PM
In 2011, the EPA promulgated the original CSAPR to address the issues raised by the remand of CAIR. CSAPR addressed the two NAAQS at issue in CAIR and additionally addressed the good neighbor provision for the 2006 PM
In 2016, the EPA promulgated the CSAPR Update to address interstate transport of ozone pollution with respect to the 2008 ozone NAAQS. The final rule generally updated the CSAPR ozone season NO
Section 301(a)(1) of the CAA also gives the Administrator the general authority to prescribe such regulations as are necessary to carry out functions under the Act.
On March 12, 2008, the EPA promulgated a revision to the NAAQS, lowering both the primary and secondary standards to 75 ppb.
The EPA subsequently took several actions that triggered the EPA's obligation under CAA section 110(c) to promulgate FIPs addressing the good neighbor provision for several states.
In addition to the previously identified finding actions, the EPA also finalized disapproval or partial disapproval actions for SIPs submitted by Indiana, Kentucky, Louisiana, New York, Ohio, Texas, and Wisconsin.
As discussed in more detail in the next section, in issuing the CSAPR Update, the EPA did not determine that it had entirely addressed the EPA's outstanding CAA obligations to implement the good neighbor provision with respect to the 2008 ozone NAAQS for 21 of 22 states covered by that rule. Accordingly, the CSAPR Update did not fully satisfy the EPA's obligation to address the good neighbor provision requirements for those states by approving SIPs, issuing FIPs, or some combination of those two actions. The EPA found that the CSAPR Update FIP fully addressed the good neighbor provision for the 2008 ozone NAAQS only with respect to Tennessee.
The EPA notes that it has also already separately proposed an action to fully address Kentucky's good neighbor obligation for the 2008 ozone NAAQS. 83 FR 17123 (Apr. 18, 2018). On May 23, 2017, the U.S. District Court for the Northern District of California issued an order requiring the EPA to take a final action fully addressing the good neighbor obligation for the 2008 ozone NAAQS for Kentucky by June 30, 2018.
As noted previously, subsequent to the promulgation of the CSAPR Update, the EPA approved a SIP fully replacing the FIP for Alabama. 82 FR 46674 (October 6, 2017). In that SIP approval, the EPA found that the rule partially satisfies Alabama's good neighbor obligation for the 2008 ozone NAAQS. Thus, the EPA continues to have an obligation, stemming from the July 13, 2015 findings notice, to fully address the good neighbor provision requirements for the 2008 NAAQS with respect to Alabama. As previously
Table II.C-1 summarizes the statutory deadline for the EPA to address its FIP obligation under CAA section 110(c) and the event that activated the EPA's obligation for each of the 20 remaining CSAPR Update states addressed in this proposed action. For more information regarding the actions triggering the EPA's FIP obligation and the EPA's action on SIPs addressing the good neighbor provision for the 2008 ozone NAAQS, see the memorandum,
On October 16, 2016, the EPA finalized the CSAPR Update. The purpose of the CSAPR Update was to protect public health and welfare by reducing interstate pollution transport that significantly contributes to nonattainment, or interferes with maintenance, of the 2008 ozone NAAQS in the eastern U.S. As discussed in section II.C, the EPA finalized a FIP for each of the 22 states subject to the rule,
The EPA aligned its analysis for the CSAPR Update (and implementation of the trading program) with relevant attainment dates for the 2008 ozone NAAQS, consistent with the D.C. Circuit's decision in
To establish the CSAPR Update emissions budgets, the EPA followed a four-step analytic process that has been used in each of the Agency's regional interstate transport rulemakings. The four-step interstate transport framework is described in more detail in section III.A. To summarize, in step 1, the Agency identified downwind receptors that are expected to have problems attaining or maintaining the NAAQS. In step 2, the EPA examined which upwind states contribute to the nonattainment or maintenance receptors identified in step 1. In step 3, the EPA quantified the upwind emissions that significantly contribute to nonattainment or interfere with maintenance. The EPA quantified significantly contributing emissions from upwind states by evaluating levels of uniform NO
The multi-factor test generated a “knee in the curve,”
To implement the CSAPR Update's emissions reductions, the EPA promulgated FIPs requiring power plants in covered states to participate in the CSAPR NO
Based on information available at the time of its promulgation, the EPA was unable to conclude that the CSAPR Update fully addressed most of the covered states' good neighbor obligations for the 2008 ozone NAAQS. 81 FR 74521. Information available at the time indicated that, even with CSAPR Update implementation, several downwind receptors were expected to continue having problems attaining and maintaining this NAAQS and that emissions from upwind states were expected to continue to contribute greater than or equal to 1 percent of the NAAQS to these areas during the 2017 ozone season.
As noted, the EPA premised its conclusion that the CSAPR Update may not fully address states' good neighbor obligations in part on the Agency's assessment that air quality problems would persist at downwind receptors in 2017 even with CSAPR Update implementation. The EPA's assessment of CSAPR Update implementation using the Air Quality Assessment Tool (AQAT) indicated that certain eastern air quality monitors would continue to have problems attaining and maintaining the 2008 ozone NAAQS in 2017. 81 FR 74550-52. Specifically, projected nonattainment receptors remained in Connecticut, Texas, and Wisconsin, while projected maintenance-only receptors remained in Connecticut, Maryland, Michigan, New York, and Texas.
The EPA's analysis also showed that 21 of the 22 CSAPR Update states would continue to contribute equal to or greater than 1 percent of the 2008 ozone NAAQS to at least one remaining nonattainment or maintenance receptor in 2017.
Further, it was not feasible for the EPA to complete an emissions control analysis that would otherwise be necessary to evaluate full elimination of each state's significant contribution to nonattainment or interference with maintenance and also ensure that emissions reductions would be achieved by 2017. 81 FR at 74522. Specifically, the EPA was unable to fully consider both non-EGU ozone season NO
Finally, in promulgating the CSAPR Update, the EPA stated its belief that it was beneficial to implement, without further delay, EGU NO
As a result of the remaining air quality problems and the limitations on the EPA's analysis, for all but one of the 21 states at issue, the EPA did not determine in the CSAPR Update that the CSAPR Update fully addressed those states' downwind air quality impacts under the good neighbor provision for the 2008 ozone NAAQS.
As described in section II.D, in the CSAPR Update the EPA promulgated FIPs intended to address the good neighbor provision for the 2008 ozone NAAQS, but could not at that time determine that those FIPs fully address 2008 ozone NAAQS good neighbor obligations for 21 of the 22 CSAPR Update states, based on information available when the rule was finalized. As a result, the CSAPR Update did not fully satisfy the EPA's obligation to issue FIPs or approve SIPs to address those states' good neighbor obligations for the 2008 ozone NAAQS. In this notice, the EPA proposes to determine that, based on additional information and analysis, the CSAPR Update fully addresses 20 of these states' good neighbor obligations for the 2008 ozone NAAQS. In particular, the EPA proposes to determine that there will be no remaining nonattainment or maintenance receptors in the eastern U.S. in 2023. Therefore, after the CSAPR Update is implemented, these states are not expected to contribute significantly to nonattainment in, or interfere with maintenance by, any other state with regard to the 2008 ozone NAAQS. The obligation as to the remaining state (Kentucky) is currently being addressed in a separate action.
The Agency is evaluating its determination regarding CSAPR Update states' remaining good neighbor obligations for the 2008 ozone NAAQS by applying the same approach used in previous federal actions addressing regional interstate transport of ozone pollution, including the CSAPR Update which addressed the same NAAQS at issue in this rulemaking. Each of these rulemakings followed the same four-step interstate transport framework to quantify and implement emissions reductions necessary to address the interstate transport requirements of the good neighbor provision.
Because this action is evaluating outstanding obligations that remain with respect to the 2008 ozone NAAQS, the EPA believes it is reasonable to apply the same framework used in the CSAPR Update in this proposed action.
Within this four-step interstate transport framework, the EPA only proceeds to step four, in which it requires sources in upwind states to
The good neighbor provision instructs the EPA and states to apply its requirements “consistent with the provisions of” title I of the CAA. The EPA is therefore interpreting the requirements of the good neighbor provision, and the elements of its four-step interstate transport framework, to apply in a manner consistent with the designation and planning requirements in title I that apply in downwind states.
For purposes of this analysis, the EPA notes specific aspects of the title I designations process and attainment planning requirements for the ozone NAAQS that provide particularly relevant context for evaluating the consistency of the EPA's approach to the good neighbor provision in upwind states. The EPA notes that this discussion is not intended to suggest that the specific requirements of designations and attainment planning apply to upwind states pursuant to the good neighbor provision, but rather to explain why the EPA's approach to interpreting the good neighbor approach is reasonable in light of relevant, comparable provisions found elsewhere in title I. In particular, these provisions demonstrate that the EPA's approach is consistent with other relevant provisions of title I with respect to what data is considered in the EPA's analysis and when states are required to implement enforceable measures.
First, areas are initially designated attainment or nonattainment for the ozone NAAQS based on actual measured ozone concentrations. CAA section 107(d) (noting that an area shall be designated attainment where it “meets” the NAAQS and nonattainment where it “does not meet” the NAAQS). Therefore, a designation of nonattainment does not in the first instance depend on what specific factors have influenced the measured ozone concentrations or whether such levels are due to enforceable emissions limits. If an area measures a violation of the relevant ozone NAAQS, then the area is designated nonattainment. In cases where the ozone nonattainment area is classified as Moderate or higher, the responsible state is required to develop an attainment plan, which generally includes the application of various enforceable control measures to sources of emissions located in the nonattainment area, consistent with the requirements in Part D of title I of the Act.
Similarly, in determining the boundaries of an ozone nonattainment area, the CAA requires the EPA to consider whether “nearby” areas “contribute” to ambient air quality in the area that does not meet the NAAQS. 42 U.S.C. 7407(d). For each monitor or group of monitors indicating a violation of the ozone NAAQS, the EPA assesses information related to five factors, including current emissions and emissions-related data from the areas near the monitor(s), for the purpose of establishing the appropriate geographic boundaries for the designated ozone nonattainment areas. A nearby area may be included within the boundary of the ozone nonattainment area only after assessing area-specific information, including an assessment of whether current emissions from that area contribute to the air quality problem identified at the violating monitor.
The EPA's historical approach to addressing the good neighbor provision via the four-step interstate transport framework, and the approach the EPA proposes to continue to apply here, is consistent with these title I requirements. That is, in steps 1 and 2 of the framework, the EPA evaluates whether there is a downwind air quality problem (either nonattainment or maintenance), and whether an upwind state impacts the downwind area such that it contributes to and is therefore “linked” to the downwind area. The EPA's determination at step 1 of the good neighbor analysis that it has not
The EPA acknowledges one distinction between the good neighbor and designation analyses: The good neighbor analysis relies on
The EPA notes that there is a further distinction between the section 107(d) designations provision and the good neighbor provision in that the latter provision uses different terms to describe the threshold for determining whether emissions in an upwind state should be regulated (“contribute significantly”) as compared to the standard for evaluating the impact of nearby areas in the designations process (“contribute”). Thus, at step 3 of the good neighbor analysis the EPA evaluates additional factors, including cost and air-quality considerations, to determine whether emissions from a linked upwind state do or would violate the good neighbor provision. Only if the EPA at step 3 determines that the upwind state's emissions do or would violate the good neighbor provision will it proceed to step 4, at which point emissions in the upwind state must be controlled so as to address the identified violation, analogous to the trigger for the application of Part D requirements to sources located in designated nonattainment areas. The EPA interprets the good neighbor provision to not require it or the upwind state to proceed to step 4 and implement any enforceable measures to “prohibit” emissions unless it identifies a violation of the provision at step 3.
In this action, consistent with historical practice, the EPA focuses its analysis on a future year in light of the forward-looking nature of the good neighbor obligation in section 110(a)(2)(D)(i)(I). Specifically, the statute requires that states prohibit emissions that “will” significantly contribute to nonattainment or interfere with maintenance of the NAAQS in any other state. The EPA reasonably interprets this language as permitting states and the EPA in implementing the good neighbor provision to prospectively evaluate downwind air quality problems and the need for further upwind emissions reductions. In the EPA's prior regional transport rulemakings, the Agency generally evaluated whether upwind states “will” significantly contribute to nonattainment or interfere with maintenance based on projections of air quality in the future year in which any emissions reductions would be expected to go into effect. Thus, when the EPA finalized the NO
First, the EPA considers the downwind attainment dates for the 2008 ozone NAAQS. In
Second, the EPA considers the timeframes that may be required to implement further emissions reductions as expeditiously as practicable. Generally, NO
The EPA's analysis of the feasibility of NO
Further, the feasibility of new emissions controls should be considered with regard to multiple upwind source categories to ensure that the Agency properly evaluates NO
Among stationary sources, EGUs in the eastern U.S. have been the primary subject of regulation to address interstate ozone pollution transport and have made significant financial investments to achieve emissions reductions. While the EPA continues to evaluate control feasibility for EGUs in its analysis, the EPA's recent analyses indicate that non-EGU source categories, which the EPA has not made subject to new regulations to address interstate ozone transport since the NO
First, the EPA presents its feasibility assessment of NO
In the CSAPR Update, the EPA also identified one EGU NO
As mentioned previously, the EPA evaluated shifting generation from EGUs with higher NO
For the same reasons, the EPA does not find it appropriate to evaluate generation shifting, in isolation from viable combustion or post-combustion control assessments, for purposes of selecting a future analytic year. If the EPA were to choose an earlier analytic year based on the ability of upwind sources to implement some level of
For these reasons, for purposes of identifying an appropriate future analytic year, the EPA is focusing its assessment of EGUs in this action on controls that were deemed to be infeasible to install for the 2017 ozone season rather than reassessing controls previously analyzed for cost-effective emissions reductions in the CSAPR Update. In establishing the CSAPR Update emissions budgets, the EPA identified but did not analyze the following two EGU NO
Installing new SCR or SNCR controls for EGUs generally involves the following steps: conducting an engineering review of the facility; advertising and awarding a procurement contract; obtaining a construction permit; installing the control technology; testing the control technology; and obtaining or modifying an operating permit.
For SCR, the total time associated with navigating necessary steps is estimated to be up to 39 months for an individual power plant installing SCR on more than one boiler.
Scheduled curtailment, or planned outage, for pollution control installation would be necessary to complete either SCR or SNCR projects. Given that peak demand and rule compliance would both fall in the ozone season, sources would likely try to schedule installation projects for the “shoulder” seasons (
In addition to the coordination of scheduled curtailment, an appropriate compliance timeframe should accommodate the additional coordination of labor and material supply necessary for any fleet-wide mitigation efforts. The total construction labor for a SCR system associated with a 500-megawatt (MW) EGU is in the range of 300,000 to 500,000 man-hours, with boilermakers accounting for
In addition to labor supply, NO
The time lag observed between the planning phase and in-service date of SCR operations in certain cases also illustrates that site-specific conditions sometimes lead to installation times of four years or longer. For instance, SCR projects for units at the Ottumwa power plant (Iowa), Columbia power plant (Wisconsin), and Oakley power plant (California) were all in the planning phase in 2014. By 2016, these projects were under construction with estimated in-service dates of 2018.
While individual unit-level SCR and SNCR projects can average 39 and 10 months, respectively, from bid to startup, a comprehensive and regional emissions reduction effort also requires more time to accommodate the labor, materials, and outage coordination for these two types of control strategies. Because these post-combustion control strategies share similar resource inputs and are part of regional emissions reduction programs rather than unit-specific technology mandates, the timeframes for one type are inherently linked to the other type. This means that SNCR projects cannot be put on an early schedule in light of their reduced construction timing without impacting the availability of resources for the manufacture and installation of SCRs and thus the potential start dates of those projects.
In short, given the market and regulatory circumstances in which EPA evaluated this effort, our analysis shows that four years would be an expeditious timeframe to coordinate the planning and completion of any mitigation efforts necessary in this instance.
The EPA is also evaluating the feasibility of implementing NO
Although the EPA determined that there were limited achievable emissions reductions available from non-EGUs by the 2017 ozone season, the EPA acknowledged that it may be appropriate to evaluate potential non-EGU emissions reductions achievable on a timeframe after the 2017 ozone season to assess upwind states' full good neighbor obligation for the 2008 ozone NAAQS. 81 FR 74522. In particular, the EPA's preliminary assessment indicated that there may be emissions reductions achievable from non-EGUs at marginal costs lower than the costs of remaining NO
•
•
•
Among the control technologies that were evaluated in the Final Non-EGU TSD, the EPA identified six categories of common control technologies available for different non-EGU emissions source categories.
For those categories for which preliminary estimates were available, as noted in the Final Non-EGU TSD, the single-unit installation time estimates provided do not account for additional important considerations in assessing the full amount of time needed for installation of NO
The preliminary estimates of installation time shown in the Final Non-EGU TSD are for installation at a single source and do not account for the time required for installing controls to achieve sector-wide compliance. When considering installation of control measures on sources regionally and across non-EGU sectors, the time for full sector-wide compliance is uncertain, but it is likely longer than the installation times shown for control measures as mentioned above for individual sources in the Final Non-EGU TSD. As discussed earlier with respect to EGUs, regional, sector-wide compliance could be slowed down by limited vendor capacity, limited available skilled labor for manufacturers such as boilermakers (who produce steel fabrications, including those for pollution control equipment), availability of raw materials and equipment (
As discussed in section III.B, the EPA weighed several factors to identify an appropriate future analytic year for evaluating interstate transport obligations for the 2008 ozone NAAQS. First, the EPA identified the relevant attainment dates to guide the EPA's consideration as 2021 and 2027, respectively the Serious and Severe area attainment dates for the 2008 ozone NAAQS.
Second, the EPA identified and analyzed the feasibility and timing needed for installing additional NO
To determine how this feasibility assessment should influence potential compliance timeframes, the EPA believes it is appropriate to consider the anticipated date of promulgation of a rule that would set any appropriate emissions reduction requirements, since regulated entities cannot be expected or required to take action to comply with a rule prior to its promulgation. The EPA, therefore, considered the timeframe in which a future rulemaking that might require such emissions reductions would likely be finalized.
The EPA is subject to several statutory and court-ordered deadlines to issue FIPs (or, alternatively, to fully approve a SIP) to address the requirements of the good neighbor provision for the 2008 ozone NAAQS for several states. An August 12, 2017 statutory deadline has passed for the EPA to act with respect to 13 states.
Finally, consistent with the court's holding in
Given the current stage of the 2008 ozone implementation cycle, the EPA's feasibility analysis set forth above, the relevant attainment dates, and the courts' holdings in
In this section, the Agency describes the air quality modeling performed consistent with step 1 of the framework described in section III.A, to identify locations where it expects nonattainment or maintenance problems with respect to the 2008 ozone NAAQS in the 2023 analytic year. This section includes information on the air quality modeling platform used in support of the proposed determination with a focus on the base year and future base case emissions inventories. The May 2018
The EPA provided an opportunity to comment on the air quality modeling platform and air quality modeling results that are used in this proposed determination when it published a Notice of Data Availability (82 FR 1733) on January 6, 2017, which provided the preliminary modeling results for the 2023 analytic year. Specifically, in the NODA the EPA requested comment on the data and methodologies related to the 2011 and 2023 emissions and the air quality modeling to project 2023 ozone concentrations and ozone contributions. While the EPA issued this NODA to provide information to states for the 70 ppb 2015 ozone NAAQS, the modeling approaches and future year projection methods were also applicable for the 75 ppb 2008 ozone NAAQS. In fact, commenters explicitly commented on these methods with respect to the 2008 ozone NAAQS. The EPA considered comments received on the NODA in the development of air quality modeling analysis used in this proposed determination.
The modeling results presented here were originally released to the public with an accompanying memorandum on October 27, 2017.
In this action, the EPA is continuing to apply the CSAPR Update approach to identifying nonattainment and maintenance receptors for the 2008 ozone NAAQS in the 2023 analytic year. The EPA here describes the analytical approach pursued in the CSAPR and CSAPR update with regard to the good neighbor requirement for the 2008 ozone NAAQS. For consistency's sake, the analysis and discussion underlying and presented in this proposal adheres to that analytical approach. However, as noted previously, EPA has identified a number of potential flexibilities in identifying downwind air quality problems for states developing good neighbor SIPs for the 2015 ozone NAAQS.
To give independent effect to both the “contribute significantly to nonattainment” and the “interfere with maintenance” prongs of section 110(a)(2)(D)(i)(I) for the 2008 ozone NAAQS, consistent with the D.C. Circuit's opinion in
Specifically, the EPA has identified as
The EPA has identified
For further details regarding the EPA's identification of receptors in the CSAPR Update,
The EPA performed nationwide photochemical modeling for 2023 to identify nonattainment and maintenance receptors relevant for the 2008 ozone NAAQS. For this proposed rule, the EPA performed air quality modeling for two emissions scenarios: (1) a 2011 base year; and (2) the 2023 analytic year (
The 2011 base year has previously been used to support the CSAPR Update proposal and final rule. The EPA chose to continue using 2011 as the base year because when EPA's analyses commenced, 2011 was the most recent emissions modeling platform available that included future year projected inventories, as are needed for transport analyses. Using 2011 as a base year also remains appropriate from the standpoint of good modeling practice. The meteorological conditions during the summer of 2011 were generally conducive for ozone formation across much of the U.S., particularly the eastern U.S. As described in the AQM TSD, the EPA's guidance for ozone attainment demonstration modeling, hereafter referred to as the modeling guidance, recommends modeling a time period with meteorology conducive to ozone formation for purposes of projecting future year design values.
For this proposal, the EPA used the Comprehensive Air Quality Model with Extensions (CAMx) version 6.40
The 2011-based air quality modeling platform includes 2011 base year emissions, 2023 future year projections of these emissions, and 2011 meteorology for air quality modeling with CAMx. In the remainder of this section, the EPA provides an overview of the 2011 and 2023 emissions inventories and the methods for identifying nonattainment and maintenance receptors along with a list of 2023 baseline nonattainment and maintenance receptors in the U.S.
To ensure the reliability of its modeling results, the EPA conducted an operational model performance evaluation of the 2011 modeling platform by comparing the 8-hour daily maximum ozone concentrations predicted during the May through September ozone season to the corresponding measured concentrations in 2011. This evaluation generally followed the approach described in the modeling guidance. Details of the model performance evaluation are described in the AQM TSD. The model performance results indicate that the 8-hour daily maximum ozone concentrations predicted by the 2011 CAMx modeling platform generally reflect the corresponding magnitude of observed 8-hour ozone concentrations on high ozone days in the 12-km U.S. modeling domain. These results provide confidence in the ability of the modeling platform to provide a reasonable projection of expected future year ozone concentrations and contributions.
The EPA developed emissions inventories for this rule, including emissions estimates for EGUs, non-EGU point sources, stationary nonpoint sources, onroad mobile sources, nonroad mobile sources, wildfires, prescribed fires, and biogenic emissions. The EPA's air quality modeling relies on this comprehensive set of emissions inventories because emissions from multiple source categories are needed to model ambient air quality and to facilitate comparison of model outputs with ambient measurements.
To prepare the emissions inventories for air quality modeling, the EPA processed the emissions inventories using the Sparse Matrix Operator Kernel Emissions (SMOKE) Modeling System version 3.7 to produce the gridded, hourly, speciated, model-ready emissions for input to the CAMx air quality model. Additional information on the development of the emissions inventories and on datasets used during the emissions modeling process for this proposed rule is provided in the October 2017 Technical Support Document “Additional Updates to Emissions Inventories for the Version 6.3, 2011 Emissions Modeling Platform for the Year 2023” (Proposed Rule Emissions Modeling TSD).
The emissions inventories, methodologies, and data used for the air quality modeling for this proposed rule incorporate public comments received on the January 2017 NODA. The updates resulting from comments received on this NODA are documented in the Proposed Rule Emissions Modeling TSD. The emissions inventories for this proposed rule were the result of several iterations of comments on the data and methods used in the 2011 emissions modeling platform. The initial modeling platform based on the 2011 National Emissions Inventory (NEI) was released for public comment in November 2013 through a NODA (78 FR 70935). Future year inventories for 2018 were released shortly thereafter through a separate NODA in January 2014 (79 FR 2437). Updated inventories for 2011 and the year 2017 were released for public comment in August 2015 through a notice prior to the proposed CSAPR Update. 80 FR 46271. The comments were incorporated into inventories used for the proposal modeling in this action. During 2016, the comments received on the proposal inventories were incorporated into the final CSAPR Update inventories for years 2011 and 2017. 81 FR 74527. In late 2016, inventories for the year 2023 were developed using methods similar to those of the CSAPR Update, and the resulting inventories were released in the January 2017 NODA described above.
The EPA emissions data representing the year 2011 supports air quality modeling of a base year from which future air quality could be forecasted. The 2011 emissions inventories used in
The modeled annual NO
As summarized in the October memo, and described in detail in the Proposed Rule Emissions Modeling TSD, the EPA projected future 2023 baseline EGU emissions using an approach that is consistent with the EGU projections that the EPA used in the CSAPR Update, specifically using the EGU projection methodology used to develop the “budget-setting base case.” 81 FR 74543.
The 2011 non-EGU point source emissions in the 2011 base case inventory generally match those in the 2011 NEI version 2.
A recent and important methodological update to the emissions inventory implemented after the release of the January 2017 NODA is a revised methodology for estimating point and nonpoint 2023 emissions from the oil and gas sector. The projection factors used in the updated 2023 oil and gas emissions inventory incorporate state-level factors based on historical growth from 2011-2015 and region-specific factors that represent projected growth from 2015 to 2023. The 2011-2015 state-level factors were based on historical state oil and gas production data published by the U.S. Department of Energy's Energy Information Administration (EIA), while the 2015-2023 factors are based on projected oil and gas production in EIA's 2017 Annual Energy Outlook (AEO) Reference Case without the Clean Power Plan for the six EIA supply regions. The 2017 AEO was the latest available at the time the modeling was performed. Details on the revised methodology that the EPA used to project oil and gas emissions to 2023, as well as changes to the base year 2011 and future year 2023 emissions inventories for other sectors, can be found in the Proposed Rule Emissions Modeling TSD.
The EPA developed the onroad mobile source emissions using the EPA's Motor Vehicle Emissions Simulator, version 2014a (MOVES2014a). The agency computed
The commercial marine category 3 vessel (“C3 marine”) emissions in the 2011 base case emissions inventory for this rule are equivalent to those in the 2011NEIv2 with the inclusion of updated emissions for California. These emissions reflect reductions associated with the Emissions Control Area proposal to the International Maritime Organization control strategy (EPA-420-F-10-041, August 2010); reductions of NO
To develop the nonroad mobile source emissions inventories other than C3 marine for the modeling platform, the EPA used monthly, county, and process level emissions output from the National Mobile Inventory Model (NMIM) (
The emissions for stationary nonpoint sources in the 2011 base case emissions inventory are largely consistent with those in the 2011NEIv2. 2023 estimates were projected using a variety of factors, including AEO 2017 projections for 2023 and state projection factors using EIA data from 2011-2015. For more information on the nonpoint sources in the 2011 base case inventory, see the Proposed Rule Emissions Modeling TSD and the 2011NEIv2 TSD. Based on comments from the January 2017 NODA, where states provided the EPA with information about projected control measures or changes in nonpoint source emissions, the EPA incorporated that information into its projections. These changes were limited and are discussed in the Proposed Rule Emissions Modeling TSD.
The following summarizes the procedures for projecting future-year 8-hour ozone average and maximum design values to 2023 to determine nonattainment and maintenance receptors. Consistent with the EPA's modeling guidance, the agency uses the air quality modeling results in a “relative” sense to project future concentrations. That is, the ratios of future year model predictions to base year model predictions are used to adjust ambient ozone design values up or down depending on the relative (percent) change in model predictions for each location. The modeling guidance recommends using measured ozone concentrations for the 5-year period centered on the base year as the air quality data starting point for future year projections. This average design value is used to dampen the effects of inter-annual variability in meteorology on ozone concentrations and to provide a reasonable projection of future air quality at the receptor under “average” conditions. Because the base year for this rule is 2011, the EPA is using the base period 2009-2013 ambient ozone design value data to project 2023 average design values in a manner consistent with the modeling guidance.
The approach for projecting future ozone design values involved the projection of an average of up to three design value periods, which include the years 2009-2013 (design values for 2009-2011, 2010-2012, and 2011-2013). The 2009-2011, 2010-2012, and 2011-2013 design values are accessible at
The EPA considers projected design values that are greater than or equal to 76.0 ppb to be violating the 2008 ozone NAAQS in 2023. As noted previously, nonattainment receptors are those sites that have projected average design values greater than the 2008 ozone NAAQS and are also violating the NAAQS based on the most recent measured air quality data. Therefore, as an additional step, for those sites that are projected to be violating the NAAQS based on the average design values in 2023, the EPA examined the most recent measured design value data to determine if the site was currently violating the NAAQS. For this proposal, the agency examined ambient data for the 2014-2016 period, which are the most recent available, certified measured design values at the time of this rule.
As discussed above, maintenance-only receptors include both: (1) Those sites with projected average and maximum design values above the NAAQS that are currently measuring clean data; and (2) those sites with projected average design values below the level of the NAAQS, but with projected maximum design values of 76.0 ppb or greater.
In projecting these future year design values, the EPA applied its own modeling guidance,
Tables III.C-1 and III.C-2 contain the ambient 2009-2013 base period average and maximum 8-hour ozone design values, the 2023 projected baseline average and maximum design values, and the ambient 2014-2016 design values for the air quality monitors that were identified in the CSAPR Update as having remaining problems attaining or maintaining the 2008 ozone NAAQS in 2017, even with CSAPR Update implementation. Table III.C-1 contains data for the monitors identified as remaining nonattainment receptors in 2017 in the CSAPR Update and Table III.C-2 contains data for the monitors identified as remaining maintenance-only receptors in 2017 in the CSAPR Update.
The EPA solicits public comment on the reliability of the modeling data, including any information which may support or not support these results.
Although the EPA has conducted nationwide contribution modeling for 2023, the EPA does not believe this information is necessary for evaluating remaining good neighbor obligations for the 2008 ozone NAAQS downwind because there are no ozone monitoring sites in the Eastern U.S. that are expected to have problems attaining or maintaining the 2008 ozone NAAQS in 2023. Nonetheless, the results of EPA's state-by-state ozone contribution modeling were released in a memorandum on March 27, 2018 and are also available in the docket for this
The EPA proposes to determine that, with CSAPR Update implementation, 20 eastern states' good neighbor obligations for the 2008 ozone NAAQS are fully addressed.
As a result, the EPA proposes to conclude that, after implementation of the CSAPR Update, none of the states analyzed will significantly contribute to nonattainment or interfere with maintenance of the 2008 ozone NAAQS in downwind states, and therefore that the CSAPR update fully addresses those states' good neighbor obligations with respect to that NAAQS. In accord with this determination, the EPA has no remaining obligation issue FIPs nor are states required to submit SIPs that would establish additional requirements for sources in these states to further reduce transported ozone pollution with regard to the 2008 ozone NAAQS.
As explained in more detail in section III.B, the EPA's selection of 2023 as a reasonable future analytic year is supported by an assessment of attainment dates for the 2008 ozone NAAQS and feasibility for control strategies to reduce NO
As a result of this proposed determination, the EPA proposes to find that the promulgation of the CSAPR Update for these states fully satisfies the requirements of the good neighbor provision for the 2008 ozone NAAQS, and therefore also satisfies the Agency's obligation pursuant to CAA section 110(c) for these states. Accordingly, the EPA would have no remaining obligation to issue FIPs nor are the states required to submit SIPs that would further reduce transported ozone pollution, beyond the existing CSAPR Update requirements, with regard to the 2008 ozone NAAQS.
Consistent with this proposed determination, this action also proposes minor revisions to the existing state-specific sections of the CSAPR Update regulations for states other than Kentucky and Tennessee. The revisions will remove the current statements indicating that the CSAPR Update FIP for each such state only partially addresses the state's good neighbor obligation under CAA section 110(a)(2)(D)(i)(I) for the 2008 ozone NAAQS. Because states can replace the CSAPR Update FIPs with SIPs, these revisions will also mean that a SIP that is approved through notice-and-comment rulemaking to fully replace the CSAPR Update FIP for one of these states would also fully address the state's good neighbor obligation for this NAAQS. In particular, the EPA proposes to find that the Agency's previous approval of Alabama's CSAPR Update SIP fully satisfies the state's good neighbor obligation for the 2008 ozone NAAQS. Thus, Alabama would have no obligation to submit any additional SIP revision addressing this obligation.
The EPA seeks comments on this proposal, including the legal, technical, and policy decisions informing the EPA's proposed determination that the CSAPR Update fully addresses the good neighbor obligation with respect to the 2008 ozone NAAQS for 20 eastern states. Note that the EPA in this proposal is not reconsidering or reopening the determinations made in the CSAPR Update, which was finalized in 2016, regarding the obligations of upwind states pursuant to the good neighbor provision for the 2008 ozone NAAQS. Those determinations have already been subject to notice and comment rulemaking processes, and the FIPs promulgated in that action are already being implemented. The analysis conducted in this action does not reconsider any analysis conducted or determinations made in that action.
Additional information about these statutes and Executive Orders can be found at
This action is a significant regulatory action that was submitted to the Office of Management and Budget (OMB) for review. Any changes made in response to OMB recommendations have been documented in the docket.
This action is not expected to be subject to Executive Order 13771 because this proposed rule is expected to result in no more than
This action does not impose any new information collection burden under the Paperwork Reduction Act. The OMB has previously approved the information collection activities contained in the existing regulations and has assigned OMB control number 2060-0667. The minor revisions to the FIP provisions proposed in this action would have no impact on monitoring, recordkeeping, and reporting requirements for affected EGUs in the CSAPR NO
I certify that this action will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act. In making this determination, the impact of concern is any significant adverse economic impact on small entities. An agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, has no net burden, or otherwise has a positive economic effect on the small entities subject to the rule. This action makes a minor modification to existing CSAPR Update FIPs and does not impose new requirements on any entity. The EPA has therefore concluded that this action will have no net regulatory burden for all directly regulated small entities.
This action does not contain any unfunded mandate as described in the Unfunded Mandates Reform Act, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local, or tribal governments or the private sector. This action simply updates the existing CSAPR Update FIPs to establish that no further federal regulatory requirements are necessary.
This action 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. This action simply updates the existing CSAPR Update FIPs to establish that no further federal regulatory requirements are necessary.
This action does not have tribal implications as specified in Executive Order 13175. It will not have substantial direct effects on tribal governments, on the relationship between the federal government and Indian tribes, or on the distribution of power and responsibilities between the federal government and Indian tribes. This action simply updates the existing CSAPR Update FIPs to establish that no further federal regulatory requirements are necessary. Thus, Executive Order 13175 does not apply to this action. Consistent with the EPA Policy on Consultation and Coordination with Indian Tribes, the EPA consulted with tribal officials while developing the CSAPR Update. A summary of that consultation is provided in the preamble for the CSAPR Update, 81 FR 74584 (October 26, 2016).
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it simply updates the existing CSAPR Update FIPs to establish that no further federal regulatory requirements are necessary.
This action is not a “significant energy action” because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This action simply updates the existing CSAPR Update FIPs to establish that no further federal regulatory requirements are necessary.
This rulemaking does not involve technical standards.
The EPA believes that this action is not subject to Executive Order 12898 because it does not establish an environmental health or safety standard. This action simply updates the existing CSAPR Update FIPs to establish that no further federal regulatory requirements are necessary. Consistent with Executive Order 12898 and the EPA's environmental justice policies, the EPA considered effects on low-income populations, minority populations, and indigenous peoples while developing the CSAPR Update. The process and results of that consideration are described in the preamble for the CSAPR Update, 81 FR 74585 (October 26, 2016).
Section 307(b)(1) of the CAA indicates which Federal Courts of Appeal have venue for petitions of review of final actions by EPA. This section provides, in part, that petitions for review must be filed in the Court of Appeals for the District of Columbia Circuit if (i) the agency action consists of “nationally applicable regulations promulgated, or final action taken, by the Administrator,” or (ii) such action is locally or regionally applicable, but “such action is based on a determination of nationwide scope or effect and if in taking such action the Administrator finds and publishes that such action is based on such a determination.”
The EPA proposes to find that any final action related to this rulemaking is “nationally applicable” or, in the alternative, is based on a determination of “nationwide scope and effect” within the meaning of section 307(b)(1).
For these reasons, the Administrator proposes to determine that any final action related to this proposal is nationally applicable or, in the alternative, is based on a determination of nationwide scope and effect for purposes of section 307(b)(1). Thus, pursuant to section 307(b) any petitions for review of any final actions regarding the rulemaking must be filed in the Court of Appeals for the District of Columbia Circuit within 60 days from the date any final action is published in the
In addition, pursuant to sections 307(d)(1)(C) and 307(d)(1)(V) of the CAA, the Administrator proposes to determine that this action is subject to the provisions of section 307(d). CAA section 307(d)(1)(B) provides that section 307(d) applies to, among other things, “the promulgation or revision of an implementation plan by the Administrator under CAA section 110(c).” 42 U.S.C. 7407(d)(1)(B). Under section 307(d)(1)(V), the provisions of section 307(d) also apply to “such other actions as the Administrator may determine.” 42 U.S.C. 7407(d)(1)(V). The Agency has complied with procedural requirements of CAA section 307(d) during the course of this rulemaking.
Environmental protection, Administrative practice and procedure, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen oxides, Ozone, Particulate matter, Regional haze, Reporting and recordkeeping requirements, Sulfur dioxide.
For the reasons stated in the preamble, part 52 of chapter I of title 40 of the Code of Federal Regulations is proposed to be amended as follows:
42 U.S.C. 7401
Environmental Protection Agency (EPA).
Proposed rule.
This action proposes amendments to the National Emission Standards for Hazardous Air Pollutants (NESHAP) Refinery MACT 1, which was published in the
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For questions about this proposed action, contact Ms. Brenda Shine, Sector Policies and Programs Division (E143-01), Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number: (919) 541-3608; fax number: (919) 541-0516; and email address:
The EPA will make every effort to accommodate all speakers who arrive and register. If a hearing is held at a U.S. government facility, individuals planning to attend should be prepared to show a current, valid state- or federal-approved picture identification to the security staff in order to gain access to the meeting room. An expired form of identification will not be permitted. Please note that the Real ID Act, passed by Congress in 2005, established new requirements for entering federal facilities. If your driver's license is issued by a noncompliant state, you must present an additional form of identification to enter a federal facility. Acceptable alternative forms of identification include: Federal employee badge, passports, enhanced driver's licenses, and military identification cards. Additional information on the Real ID Act is available at
The EPA may publish any comment received to its public docket. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (
The
Table 1 of this preamble lists the NESHAP and associated regulated industrial source categories that are the subject of this proposal. Table 1 is not intended to be exhaustive, but rather provides a guide for readers regarding the entities that this proposed action is likely to affect. The proposed standards, once promulgated, will be directly applicable to the affected sources. Federal, state, local, and tribal government entities would not be affected by this proposed action. As defined in the
In addition to being available in the docket, an electronic copy of this action is available on the internet. Following signature by the EPA Administrator, the EPA will post a copy of this proposed action at
A redline version of the regulatory language that incorporates the proposed changes in this action is available in the docket for this action (Docket ID No. EPA-HQ-OAR-2010-0682).
The EPA initially promulgated NESHAP pursuant to the Clean Air Act (CAA) sections 112(d)(2) and (3) for major sources in the Petroleum Refineries—Other Sources Not Distinctly Listed source category on August 18, 1995, in 40 CFR part 63, subpart CC. These standards are also referred to as maximum achievable control technology (MACT) standards and this NESHAP for petroleum refineries is commonly referred to as Refinery MACT 1. The 1995 Refinery MACT 1 rule regulates miscellaneous process vents, storage vessels, wastewater, equipment leaks, gasoline loading racks, and marine tank vessel loading. On October 28, 2009, the EPA promulgated amendments to Refinery MACT 1 to include MACT standards for heat exchange systems, which were not originally addressed in Refinery MACT 1. This same rulemaking included updating cross-references to the General Provisions in 40 CFR part 63.
The EPA completed a residual risk and technology review of Refinery MACT 1, publishing final amendments on December 1, 2015. The December 1, 2015, final amendments included revisions to the Refinery MACT 1 requirements for process vents designated as “maintenance vents.” Maintenance vents are used only during startup, shutdown, maintenance, or inspection of equipment activities during which the equipment is emptied, depressurized, degassed, or placed into service. The December 1, 2015, final amendments require that the hydrocarbon content of the vapor in the equipment served by the maintenance
On January 19, 2016, the EPA received a petition for reconsideration from the American Petroleum Institute (API) and the American Fuel and Petrochemical Manufacturers (AFPM) formally requesting that the EPA reconsider the compliance date for maintenance vents located at sources constructed on or before June 30, 2014, among other issues.
In response to this petition, on July 13, 2016, the EPA revised the compliance date for maintenance vents located at sources constructed on or before June 30, 2014, from February 1, 2016, to August 1, 2017 (81 FR 45232; July 13, 2016).
In this action, the EPA is proposing to revise the compliance date for maintenance vents located at sources constructed on or before June 30, 2014, from August 1, 2017, to January 30, 2019. This proposed compliance date would provide petroleum refinery owners or operators with an additional 18 months to achieve compliance. The EPA is aware that many refineries have made good faith efforts to achieve compliance, including applying for and receiving an additional 12-month compliance extension. This makes their compliance deadline August 1, 2018, under the procedures provided in the General Provisions at 40 CFR 63.6(i). The compliance date included in this proposal (
The EPA is proposing to amend the compliance date due to challenges petroleum refinery owners or operators have experienced in attempting to comply with the December 1, 2015, final rule requirements notwithstanding the additional compliance time provided in the July 13, 2016, final rule (
Additionally, the EPA has received various requests from industry stakeholders for clarification regarding the maintenance vent provisions.
A compliance date of January 30, 2019, will provide sufficient time for the EPA to take final action on the April 10, 2018, proposal, and sufficient time for sources to complete the management of change process and to fully invest in compliance solutions.
The additional compliance time will have an insignificant effect on emission reductions and no effect on costs. The amount of time the maintenance vents are used are relatively infrequent and are usually of short duration (81 FR 45237, July 13, 2016). In addition, the proposed compliance date only provides approximately 6 months additional time beyond the August 1, 2018, compliance date for facilities that received a compliance extension under the procedure in 40 CFR 63.6(i).
Additional information about these statutes and Executive Orders can be found at
This action is not a significant regulatory action and was, therefore, not submitted to the Office of Management and Budget (OMB) for review.
This action is not expected to be an Executive Order 13771 regulatory action because this action is not significant under Executive Order 12866.
This action does not impose any new information collection burden under the PRA. The OMB has previously approved the information collection activities contained in the existing regulations at 40 CFR part 63, subparts CC and UUU under the provisions of the PRA, 44 U.S.C. 3501
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. In making this determination, the impact of concern is any significant adverse economic impact on small entities. An agency may certify that a rule will not have a significant economic impact on a substantial number of small entities, if the rule relieves regulatory burden, has
This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local, or tribal governments or the private sector.
This action does not have federalism implications. It will not have substantial direct effects on the states, the relationship between the national government and the states, or the distribution of power and responsibilities among the various levels of government.
This action does not have tribal implications as specified in Executive Order 13175. It will not have substantial direct effect on tribal governments, 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, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this action.
This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866, and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. The proposed amendments revise compliance dates. The additional compliance time will have an insignificant effect on emission reductions as many refiners already have measures in place due to state and other federal requirements to minimize emissions during these periods. Further, these periods are relatively infrequent and are usually of short duration. Therefore, the proposed amendments should not appreciably increase risk for any populations.
This action is not subject to Executive Order 13211 because it is not a significant regulatory action under Executive Order 12866.
This rulemaking does not involve technical standards.
The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations and/or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994). The proposed amendments revise compliance dates. The additional compliance time will have an insignificant effect on emission reductions as many refiners already have measures in place due to state and other federal requirements to minimize emissions during these periods. Further, these periods are relatively infrequent and are usually of short duration. Additionally, the proposed compliance date only provides approximately 6 months beyond the August 1, 2018, compliance date for facilities operating under the compliance extension procedure in 40 CFR 63.6(i). Therefore, the proposed amendments should not appreciably increase risk for any populations.
Environmental protection, Administrative practice and procedures, Air pollution control, Hazardous substances, Intergovernmental relations, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, title 40, chapter I, of the Code of Federal Regulations is proposed to be amended as follows:
42 U.S.C. 7401
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of public listening session.
The FMCSA announces a public listening session on July 12, 2018, to solicit information on issues relating to the design, development, testing, and integration of automated driving systems (ADS) equipped commercial motor vehicles (CMVs) on our Nation's roadways. The listening session will provide interested parties an opportunity to share their views on the FMCSRs as they relate to the development and safe integration of ADS. It will also allow FMCSA to share with stakeholders the ADS strategy and open a channel for two-way communication. This listening session will supplement the information gathered from FMCSA's previous requests for comment on issues related to automation. The session will be conducted at the same location as the 2018 Automated Vehicles Symposium sponsored by the Association for Unmanned Vehicle Systems International and the Transportation Research Board. During the session representatives from FMCSA and the Federal Highway Administration (FHWA) will solicit information on issues relating to the design, development, testing and integration of ADS-equipped commercial vehicles. Attendees are also encouraged to share any data or analysis on this topic with FMCSA and FHWA representatives.
The meeting will be held Thursday, July 12, 2018, from 1:30 p.m. to 3:30 p.m., Pacific Daylight Time (PDT). Comments will be accepted from in-person participants as well as comments submitted via the internet. If all interested participants have had an opportunity to comment, the session may conclude early.
The public listening session will be held as part of the 2018 Automated Vehicles Symposium at the Hilton San Francisco Union Square, 333 O'Farrell Street, San Francisco, California 94102. Participation in the listening session is free.
Mr. Michael Huntley, Division Chief, Vehicle and Roadside Operations Division, Office of Carrier, Driver and Vehicle Safety, MC-PSV, (202) 366-9209,
The FMCSA is responsible for overseeing the safety of CMVs, their drivers, and those motor carriers operating CMVs in interstate commerce. The Agency works with Federal, State, and local enforcement agencies, the motor carrier industry, safety groups, and organized labor to reduce crashes, injuries, and fatalities involving large trucks and buses.
The FMCSRs provide rules to ensure the safe operation of CMVs, as defined in 49 CFR 390.5, which includes vehicles with a gross vehicle weight/gross combination weight or gross vehicle weight rating/gross combination weight rating, whichever is greater, of 10,001 pounds or more; passenger-carrying vehicles designed or used to transport 9 to 15 passengers for direct compensation; passenger-carrying vehicles designed or used to transport 16 or more passengers; and any size vehicle transporting hazardous materials in a quantity requiring placards.
On September 12, 2017, the Department published the
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Using the SAE levels described above, the Department draws a distinction between Levels 0-2 and 3-5 based on whether the human driver or the automated system is primarily responsible for monitoring the driving environment. For the purposes of this
The FMCSA encourages the development of these advanced safety technologies for use in CMVs. The Agency also recognizes the need to work with the States and localities to ensure that all testing and use of these advanced safety systems supports the safe operation and deployment of ADS-equipped CMVs.
On March 28, 2018, FMCSA published “Request for Comments Concerning Federal Motor Carrier Safety Regulations (FMCSRs) Which May Be a
To further support FMCSA's effort to understand necessary changes to the FMCSRs, FMCSA requested information from companies engaged in the design, development, testing, and integration of ADS-equipped CMVs into the fleet. Specifically, the Agency requested information about: (1) The scenarios and environments where entities expect that ADS will soon be tested and integrated into CMVs operating on public roads or in interstate commerce; (2) the operational design domains (ODD) in which these systems are being operated, tested and deployed; and, (3) suggested measures to ensure the protection of any proprietary or confidential business information shared with the Agency on this topic.
The comment period ended on May 10, 2018. Interested parties may view the comments the Agency received at
In the Spring Regulatory and Deregulatory Agenda issued after the publication of the March 28 RFC notice, FMCSA announced the initiation of rulemaking concerning ADS-equipped CMVs beginning with an Advance Notice of Proposed Rulemaking (ANPRM), which is currently scheduled to be published in late 2018 (“Safe Integration of Automated Driving Systems-Equipped Commercial Motor Vehicles,” RIN 2126-AC17).
The FMCSA hopes to supplement the information gathered from the RFC by targeting stakeholders who have not previously provided many comments, including academia, insurance groups, and technology providers and developers. The listening session will provide interested parties an opportunity to provide information and data that can inform the Agency's future rulemaking efforts by sharing their views on the FMCSRs as they relate to the development and safe integration of ADS through oral presentations. The Agency will provide the public with all relevant details for this meeting at:
Oral comments from the public will be heard during the meeting. Members of the public may also submit written comments to public docket referenced at the beginning of this notice using any of the following methods:
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National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of receipt; request for comments.
On March 23, 2018, the State of New York submitted a petition to the Secretary of Commerce requesting rulemaking under the Administrative Procedure Act. The petition requests that NMFS revise the current state-by-state commercial quota allocations in the summer flounder fishery. This notice announces that NMFS, acting on the Secretary's behalf, has received this request, and provides the opportunity for public comment.
Comments must be received by 5 p.m. local time, on July 25, 2018.
You may submit comments on this document, identified by NOAA-NMFS-2018-0074, by either of the following methods:
1. Go to
2. Click the “Comment Now!” icon, complete the required fields, and
3. Enter or attach your comments.
Cynthia Hanson, Fishery Management Specialist, (978) 281-9180.
On March 23, 2018, the State of New York and the New York State Department of Environmental Conservation (“New York”) submitted a petition to the Secretary of Commerce requesting rulemaking under the Administrative Procedure Act. The petition requests that NMFS amend the Summer Flounder, Scup, and Black Sea Bass
New York proposed that NMFS revise the allocations in a two-phase process. First, state-by-state allocations would be removed and replaced with coastwide management of the commercial quota for an interim period while new information is collected to inform revisions to the state quota allocation system. Then, revised state-by-state quota allocations that are “far to New York” would be implemented in phase two, based on the coastwide harvest activity information collected during phase one.
The Mid-Atlantic Fishery Management Council, acting jointly with the Atlantic States Marine Fisheries Commission, is already developing an amendment to the FMP that considers reallocating the summer flounder commercial state quotas. Included in the alternatives under consideration are changes to the state-by-state quota allocations based on updated stock distribution, similar to New York's request in this petition. The potential coastwide quota allocation percentage for New York under consideration in the amendment ranges from 7.65 percent (status quo) to 10.71 percent. The Council intends to conduct public hearings on this amendment later this summer to solicit comments on the amendment's draft alternatives. The Council is scheduled to take final action at its December 2018 meeting. Once the Council submits the final amendment for review and approval, NMFS will review the Council's amendment to determine if it is consistent with the National Standards, other provisions of the Magnuson-Stevens Fishery Conservation and Management Act, and other applicable laws. Under the current timeline, this would result in the implementation of this new allocation amendment in the fall of 2019. Any new state allocations are intended to be implemented for the 2020 fishing year, beginning on January 1, 2020, if adopted and approved.
NMFS is providing this notice to acknowledge the receipt of New York's petition. With this notice, NMFS also seeks to emphasize the importance of the Council process, and encourage interested parties, including the State of New York and New York fishermen, to engage in the Council and Commission's development of the Commercial Summer Flounder Amendment at upcoming public hearings and Council meetings. NMFS will share comments received on this petition with the Council and Commission as the comments will likely have direct applicability to the allocation alternatives under consideration in the amendment. The Council's final commercial amendment will be reviewed by NMFS for consistency with the National Standards and other provisions of the Magnuson-Stevens Act. If, after completion of the amendment process, the state of New York wishes to revisit this petition request, NMFS may publish a subsequent notice to initiate rulemaking or formally deny the petition request. However, in the interim, NMFS defers to the ongoing Council amendment intended to address the current commercial quota allocation for summer flounder.
U.S. Commission on Civil Rights.
Announcement of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act that the Arkansas Advisory Committee (Committee) will hold a series of meetings to discuss next steps and prepare for a hearing on their study of mass incarceration and the judicial system in Arkansas.
The meetings will take place on:
Melissa Wojnaroski, DFO, at
Members of the public can listen to these discussions. These meetings are available to the public through the above call in number. Any interested member of the public may call this number and listen to the meeting. An open comment period will be provided to allow members of the public to make a statement as time allows. The conference call operator will ask callers to identify themselves, the organization they are affiliated with (if any), and an email address prior to placing callers into the conference room. Callers can expect to incur regular charges for calls they initiate over wireless lines, according to their wireless plan. The Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1-800-877-8339 and providing the Service with the conference call number and conference ID number.
Members of the public are also entitled to submit written comments; the comments must be received in the regional office within 30 days following the respective meeting. Written comments may be mailed to the Regional Programs Unit, U.S. Commission on Civil Rights, 230 S Dearborn, Suite 2120, Chicago, IL 60604. They may also be faxed to the Commission at (312) 353-8324, or emailed to Corrine Sanders at
Records generated from these meetings may be inspected and reproduced at the Regional Programs Unit Office, as they become available, both before and after the meeting. Records of the meeting will be available via
U.S. Census Bureau, Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
To ensure consideration, written comments must be submitted on or before September 10, 2018.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6625, 14th and Constitution Avenue NW, Washington, DC 20230 (or via the internet at
Requests for additional information or copies of the information collection instrument(s) and instructions should be directed to Robin A. Pennington, U.S. Census Bureau, 4600 Silver Hill Road, Washington, DC 20233 (or through the internet at
The Spatial, Address, and Imagery Data (SAID) Program, formerly known as the Geographic Support System (GSS) Partnership Program, is one of seven voluntary geographic partnership programs that collect data to update the U.S. Census Bureau's geographic database of addresses, streets, boundaries, and imagery known as the Master Address File/Topologically Integrated Geocoding and Referencing (MAF/TIGER) System. The data collected in the SAID Program is also used to define geographic boundaries, including census blocks, and to place households and group quarters in a specific census block. The Census Bureau uses the MAF/TIGER System to link demographic data from surveys and the decennial census to locations and areas, such as cities, school districts, and counties. To properly tabulate statistics by geography, the Census Bureau must have accurate and current addresses and boundaries.
The SAID Program follows the process below:
1. The Census Bureau invites participants, including tribal, state, county, and local governments; federal agencies; and other organizations each fiscal year.
2. Participants provide a current address list with associated points and attributes, spatial data, and/or imagery that is no more than two years old.
3. Participants upload the requested data files to a Census Bureau Secure File Transfer Protocol site, per Census Bureau procedures.
4. The Census Bureau updates the MAF/TIGER System with the address and street centerline data provided by the participants, and uses the provided imagery for quality control and change detection.
5. The Census Bureau uses these updated addresses and streets to support all Census Bureau field operations, surveys, and data tabulation.
The SAID Program complements the 2020 Census In-Office Address Canvassing Operation and 2020 Census Local Update of Census Addresses Operation (LUCA) by improving address coverage, collecting and updating street features, and enhancing the overall quality and integrity of the MAF/TIGER System. The SAID Program collects addresses annually, while LUCA occurs once per decade. The SAID Program supports a reengineered address canvassing methodology for the 2020 Census and beyond, allowing the Census Bureau to limit expensive field operations to those areas of the country where housing unit change and growth is occurring. The SAID Program provides the Census Bureau with a continuous method to obtain current, accurate, and complete address, spatial, and imagery data. The SAID Program helps the Census Bureau maintain its geographic framework for data collection, tabulation, and dissemination between decennial censuses and to support ongoing programs, such as the American Community Survey and the Population Estimates Program. Over the past six years, the SAID Program, under the name of the Geographic Support System (GSS) Partnership Program, has enabled the Census Bureau to update addresses and street centerlines across the country, with participation covering nearly 89 percent of the housing units in the nation. Moving forward, the SAID Program will continue to focus on acquiring addresses, street centerlines, and imagery in targeted areas.
Each year, the Census Bureau identifies areas to invite to participate in the SAID program through varios evaluation factors, such as address growth, address change, comparison with other Census Bureau statistics, and past SAID or GSS Partnership Program participation status. The Census Bureau contacts potential participants by telephone and email to request addresses, street centerlines, and imagery data that are no more than two years old, along with supporting metadata. When invitees agree to participate, the Census Bureau sends them instructions on creating a Secure Web Incoming Module (SWIM) account, which is used for secure file transfers to the Census Bureau. Participants then submit their data in a single submission through the SWIM at their convenience. If a participant submits files with inadequate metadata, the Census Bureau requests the appropriate metadata, such as date of last update, frequency of updates, and source description from the participant. The Census Bureau will only process the files with appropriate metadata.
Census Bureau Contact with Local Governments: 1,000.
Census Bureau Acquisition of Local Geographic Data and Content Clarification: 500.
Census Bureau Contact with Local Governments: 1,000.
Census Bureau Acquisition of Local Geographic Data and Content Clarification: 500.
Census Bureau Contact with Local Governments: 1,000.
Census Bureau Acquisition of Local Geographic Data and Content Clarification: 500.
Census Bureau Contact with Local Governments: 2 hours.
Census Bureau Acquisition of Local Geographic Data and Content Clarification: 10 hours.
Census Bureau Contact with Local Governments: 2,000.
Census Bureau Acquisition of Local Geographic Data and Content Clarification: 5,000.
Census Bureau Contact with Local Governments: 2,000.
Census Bureau Acquisition of Local Geographic Data and Content Clarification: 5,000.
Census Bureau Contact with Local Governments: 2,000.
Census Bureau Acquisition of Local Geographic Data and Content Clarification: 5,000.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Summarization of comments submitted in response to this notice will be included in the request for OMB approval of this information collection. Comments will also become a matter of public record.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) preliminarily determines that sodium gluconate, gluconic acid, and derivative products from the People's Republic of China (China) are, or are likely to be, sold in the United States at less than fair value (LTFV). The period of investigation (POI) is April 1, 2017, through September 30, 2017. Interested parties are invited to comment on this preliminary determination.
Applicable July 10, 2018.
Magd Zalok or Stephen Bailey, AD/CVD Operations, Office IV, Enforcement & Compliance, International Trade Administration, Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4162 or (202) 482-0193 respectively.
This preliminary determination is in accordance with section 733(b) of the Tariff Act of 1930, as amended (the Act). Commerce published the notice of initiation of this investigation on January 4, 2018.
For a complete description of the events that followed the initiation of this investigation,
The products covered by this investigation are sodium gluconate, gluconic acid, and derivative products from China. For a complete description of the scope of this investigation,
In accordance with the preamble to Commerce's regulations,
Commerce is conducting this investigation in accordance with section 731 of the Act. Pursuant to sections 776(a) and (b) of the Act, Commerce preliminarily has relied upon facts otherwise available, with adverse inferences, for the China-wide entity. The China-wide entity includes mandatory respondents Shandong Fuyang Biotechnology Co., Ltd./Shandong Fuyang Biology Starch Co., Ltd. (Shandong Fuyang)
In proceedings involving NME countries, Commerce maintains a rebuttable presumption that all companies within the country are subject to government control and, therefore, should be assessed a single weighted-average dumping margin.
In the
Commerce preliminarily determines that the following estimated weighted-average dumping margins exist:
In accordance with section 733(d)(2) of the Act, Commerce will direct U.S. Customs and Border Protection (CBP) to suspend liquidation of subject merchandise as described in the scope of the investigation section entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the
As described in the Preliminary Decision Memorandum, in this preliminary determination, no adjustments pursuant to sections 777A(f) and 772(c)(1)(C) of the Act are being made for cash deposit purposes.
These suspension of liquidation instructions will remain in effect until further notice.
Normally, Commerce discloses to interested parties the calculations performed in connection with a preliminary determination within five days of its public announcement or, if there is no public announcement, within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). However,
Because the mandatory respondents in this investigation did not provide information requested by Commerce and Commerce preliminarily determines in accordance with section 776(b) of the Act that each of the mandatory respondents to have been uncooperative, verification will not be conducted.
Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than 30 days after the date of publication of the preliminary determination, unless the Secretary alters the time limit. Rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs.
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to issues raised in the case and rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce, within 30 days after the date of publication of this notice. Requests should contain the party's name, address, and telephone number, the number of participants, whether any participant is a foreign national, and a list of the issues to be discussed. If a request for a hearing is made, Commerce intends to hold the hearing at the U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, at a time and date to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.
Section 735(a)(1) of the Act and 19 CFR 351.210(b)(1) provide that Commerce will issue the final determination within 75 days after the date of its preliminary determination. Accordingly, Commerce will make its final determination no later than 75 days after the signature date of this preliminary determination.
In accordance with section 733(f) of the Act, Commerce will notify the International Trade Commission (ITC) of its preliminary determination of sales at LTFV. If the final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after the final determination whether imports of the subject merchandise are materially injuring, or threaten material injury to, the U.S. industry.
This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).
The scope of the investigation covers all grades of sodium gluconate, gluconic acid, liquid gluconate, and glucono delta lactone (GDL) (collectively GNA Products), regardless of physical form (including, but not limited to substrates; solutions; dry granular form or powders, regardless of particle size; or as a slurry). The scope also includes GNA Products that have been blended or are in solution with other product(s) where the resulting mix contains 35 percent or more of sodium gluconate, gluconic acid, liquid gluconate, and/or GDL by dry weight.
Sodium gluconate has a molecular formula of NaC
The merchandise covered by the scope of the investigation is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under subheadings 2918.16.1000, 2918.16.5010, and 2932.20.5020. Merchandise covered by the scope may also enter under HTSUS subheadings 2918.16.5050, 3824.99.2890, and 3824.99.9295. Although the HTSUS subheadings and CAS registry numbers are provided for convenience and customs purposes, the written description of the merchandise is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) is conducting an administrative review of the countervailing duty (CVD) order on high pressure steel cylinders (steel cylinders) from the People's Republic of China (PRC) for the period of review January 1, 2016, through December 31, 2016. Interested parties are invited to comment on these preliminary results.
Applicable July 10, 2018.
Toby Vandall or Aimee Phelan, AD/CVD Operations, Office I, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone:
On June 7, 2017, Commerce published a notice of opportunity to request an administrative review of the CVD order on steel cylinders from the PRC for the period January 1, 2016, through December 31, 2016.
The merchandise covered by this order is seamless steel cylinders designed for storage or transport of compressed or liquefied gas (“high pressure steel cylinders”). High pressure steel cylinders are fabricated of chrome alloy steel including, but not limited to, chromium-molybdenum steel or chromium magnesium steel, and have permanently impressed into the steel, either before or after importation, the symbol of a U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration (“DOT”)-approved high pressure steel cylinder manufacturer, as well as an approved DOT type marking of DOT 3A, 3AX, 3AA, 3AAX, 3B, 3E, 3HT, 3T, or DOT-E (followed by a specific exemption number) in accordance with the requirements of sections 178.36 through 178.68 of Title 49 of the Code of Federal Regulations, or any subsequent amendments thereof. High pressure steel cylinders covered by this order have a water capacity up to 450 liters, and a gas capacity ranging from 8 to 702 cubic feet, regardless of corresponding service pressure levels and regardless of physical dimensions, finish or coatings.
Excluded from the scope of the order are high pressure steel cylinders manufactured to U-ISO-9809-1 and 2 specifications and permanently impressed with ISO or UN symbols. Also excluded from the order are acetylene cylinders, with or without internal porous mass, and permanently impressed with 8A or 8AL in accordance with DOT regulations.
Merchandise covered by the order is classified in the Harmonized Tariff Schedule of the United States (“HTSUS”) under subheading 7311.00.00.30. Subject merchandise may also enter under HTSUS subheadings 7311.00.00.60 or 7311.00.00.90. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise under the order is dispositive.
We are conducting this administrative review in accordance with section 751(a)(1)(A) of the Tariff Act of 1930, as amended (the Act). For each of the subsidy programs found countervailable, we preliminarily find that there is a subsidy,
In making these findings, we relied, in part, on facts available, and because we find that either the GOC or the respondent company did not act to the best of their ability to respond to our requests for information, we drew an adverse inference where appropriate in selecting from among the facts otherwise available.
We preliminarily find that the following net countervailable subsidy rate exists for the mandatory respondent, BTIC, for the period January 1, 2016, through December 31, 2016:
Upon issuance of the final results of this administrative review, Commerce shall determine, and U.S. Customs and Border Protection (CBP) shall assess, countervailing duties on all appropriate entries covered by this review. We intend to issue assessment instructions to CBP 15 days after publication of the final results of this review.
Pursuant to section 751(a)(2)(C) of the Act, we also intend, upon publication of the final results, to instruct CBP to collect cash deposits of estimated countervailing duties in the amount indicated above for BTIC, on shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this
We will disclose to parties in this review the calculations performed in reaching the preliminary results within five days of publication in the
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to the issues raised in the case and rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, filed electronically via ACCESS by 5 p.m. Eastern Time within 30 days after the date of publication of this notice.
Unless the deadline is extended pursuant to section 751(a)(3)(A) of the Act, we intend to issue the final results of this administrative review, including the results of our analysis of the issues raised by the parties in their comments, no later than 120 days after the date of publication of this notice.
These preliminary results and notice are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) preliminarily determines that the exporters of chlorinated isocyanurates subject to this administrative review made sales of subject merchandise at prices below normal value (NV). The period of review (POR) is June 1, 2016, through May 31, 2017. Interested parties are invited to comment on these preliminary results of review.
Applicable July 10, 2018.
Sean Carey, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3964.
The products covered by the order are chlorinated isos, which are derivatives of cyanuric acid, described as chlorinated s-triazine triones.
Commerce is conducting this administrative review in accordance with section 751(a)(1)(A) of the Tariff Act of 1930, as amended (the Act). Export prices have been calculated in accordance with section 772 of the Act. Because China is a non-market economy within the meaning of section 771(18) of the Act, normal value has been calculated in accordance with section 773(c) of the Act. For a full description of the methodology underlying our conclusions,
The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
The administrative review covers three producers/exporters: (1) Heze Huayi Chemical Co. Ltd. (Heze Huayi); (2) Hebei Jiheng Chemical Co. Ltd. (Jiheng); and (3) Juancheng Kangtai
For the companies subject to this review that have established their eligibility for a separate rate, Commerce preliminarily determines that the following weighted-average dumping margins exist for the period of June 1, 2016, through May 31, 2017:
Commerce intends to disclose the calculations for these preliminary results within five days of the date of publication of this notice, in accordance with 19 CFR 351.224(b).
Interested parties may submit case briefs within 30 days after the date of publication of these preliminary results of review.
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request to the Assistant Secretary for Enforcement and Compliance, within 30 days of the date of publication of this notice.
All submissions, with limited exceptions, must be filed electronically using ACCESS. An electronically filed document must be received successfully in its entirety by 5 p.m. Eastern Time (ET) on the due date. Documents excepted from the electronic submission requirements must be filed manually (
Commerce intends to issue the final results of this administrative review, which will include the results of our analysis of all issues raised in the case briefs, within 120 days of publication of these preliminary results in the
Upon issuing the final results of this review, Commerce shall determine, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries covered by this review.
In accordance with 19 CFR 351.212(b)(1), we are calculating importer- (or customer-) specific assessment rates for the merchandise subject to this review. For any individually examined respondent whose weighted-average dumping margin is above
For entries that were not reported in the U.S. sales database submitted by an exporter individually examined during this review, Commerce will instruct CBP to liquidate such entries at the China-wide rate. Additionally, if Commerce determines that an exporter under review had no shipments of the subject merchandise, any suspended entries that entered under that exporter's case number will be liquidated at the China-wide rate.
The following cash deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise from China entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(C) of the Act: (1) For the exporters listed above, the cash deposit rate will be the rate established in the final results of this review (except, if the rate is zero or
This notice also serves as a reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
We are issuing and publishing these results in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.213 and 19 CFR 351.221(b)(4).
Department of the Army, DoD.
Notice of Federal Advisory Committee meeting; cancellation.
The Department of the Army published a Federal Advisory Committee meeting of the Advisory Committee on Arlington National Cemetery notice in the
Mr. Timothy Keating; Alternate Designated Federal Officer for the Committee, in writing at Arlington National Cemetery, Arlington VA 22211, or by email at
None.
Office of the Secretary, Department of Defense.
Renewal of federal advisory committee.
The Department of Defense (DoD) is publishing this notice to announce that it is renewing the charter for the Defense Acquisition University Board of Visitors (“the Board”).
Jim Freeman, Advisory Committee Management Officer for the Department of Defense, 703-692-5952.
This committee's charter is being renewed in accordance with the Federal Advisory Committee Act (FACA) of 1972 (5 U.S.C., Appendix, as amended) and 41 CFR 102-3.50(d). The charter and contact information for the Designated Federal Officer (DFO) can be obtained at
Office of Special Education and Rehabilitative Services, Department of Education.
Notice.
The Department of Education (Department) is issuing a notice inviting applications for new awards for fiscal year (FY) 2018 for Educational Technology, Media, and Materials for
For the addresses for obtaining and submitting an application, please refer to our Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the
Carmen Sanchez, U.S. Department of Education, 400 Maryland Avenue SW, Room 5175, Potomac Center Plaza, Washington, DC 20202-5076. Telephone: (202) 245-6595.
If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
This priority is:
Over 40 years of research and experience have demonstrated the benefits of assistive technology (AT)
Despite these known benefits, teachers, related services personnel, and other professionals (collectively, “providers”) vary greatly in their knowledge of evidence-based (as defined in this notice) practices (EBPs) for effective use
Technology planning to develop comprehensive and sustainable systems for effective use of AT and IT should focus on sound frameworks
This priority will fund a cooperative agreement to establish and operate a Center on Technology Systems in Local Educational Agencies (Center). The Center will increase the effective use of AT and IT by children with disabilities and their families by building the capacity of LEAs to implement comprehensive and sustainable systems for the effective use of AT and IT. This priority is consistent with the following Secretary's Supplemental Priorities: Priority 2—Promoting Innovation and Efficiency, Streamlining Education with an Increased Focus on Improving Student Outcomes, and Providing Increased Value to Students and Taxpayers; Priority 5—Meeting the Unique Needs of Students and Children With Disabilities and/or Those With Unique Gifts and Talents; Priority 7—Promoting Literacy; and Priority 8—Promoting Effective Instruction in Classrooms and Schools, published in the
(a) Development and refinement of a framework that incorporates theories, knowledge base, and effective practices, policies, and tools that LEAs can use to
(b) Increased knowledge of providers about evidence-based AT and IT practices for children with disabilities and their families;
(c) Increased capacity of LEAs to develop comprehensive and sustainable systems for the effective use of AT and IT; and
(d) Increased effective use of AT and IT by children with disabilities and their families in the LEAs that have comprehensive and sustainable systems for the effective use of AT and IT.
In addition to these programmatic requirements, to be considered for funding under this priority, applicants must meet the application and administrative requirements in this priority, which are:
(a) Demonstrate, in the narrative section of the application under “Significance,” how the project will—
(1) Address LEAs' needs regarding useful, relevant, and current information and training to build their capacity to develop and sustain systems for the effective use of AT and IT by children with disabilities and their families. To meet this requirement the applicant must—
(i) Present applicable national data demonstrating the extent to which LEAs have comprehensive and sustainable systems for the effective use of AT and IT by children with disabilities and their families, including gaps in the resources available to support LEAs in the development of these systems;
(ii) Demonstrate knowledge of current educational issues and policy initiatives relating to the effective use of AT and IT by children with disabilities and their families;
(iii) Present information about the current capacity of—
(A) Providers to implement EBPs to improve the effective use of AT and IT by children with disabilities and their families; and
(B) LEAs to implement components of comprehensive and sustainable systems for the effective use of AT and IT by children with disabilities and their families;
(2) Improve the effective use of AT and IT by children with disabilities and their families, and indicate the likely magnitude or importance of the improvements.
(b) Demonstrate, in the narrative section of the application under “Quality of project services,” how the proposed project will—
(1) Ensure equal access and treatment for members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disability. To meet this requirement, the applicant must describe how it will—
(i) Identify the needs of the intended recipients for technical assistance (TA) and information; and
(ii) Ensure that services and products meet the needs of the intended recipients of the grant;
(2) Achieve its goals, objectives, and intended outcomes. To meet this requirement, the applicant must provide—
(i) Measurable intended project outcomes; and
(ii) In Appendix A, the logic model (as defined in this notice) by which the proposed project will achieve its intended outcomes that depicts, at a minimum, the goals, activities, outputs, and intended outcomes of the proposed project;
(3) Use a conceptual framework (and provide a copy in Appendix A) to develop project plans and activities, describing any underlying concepts, assumptions, expectations, beliefs, or theories, as well as the presumed relationships or linkages among these variables, and any empirical support for this framework;
(4) Be based on current research and make use of EBPs. To meet this requirement, the applicant must describe—
(i) The current research on practices to support the effective use of AT and IT by children with disabilities;
(ii) The current research on components of LEA systems, including policies and practices, necessary to increase the effective use of AT and IT by children with disabilities and their families;
(iii) The current research about adult learning principles and implementation science that will inform the proposed TA;
(iv) How the proposed project will incorporate current research and EBPs in the development and dissemination of a framework of LEA policies and practices that are necessary for creating comprehensive and sustainable systems for the effective use of AT and IT by children with disabilities and their families; and
(v) How the proposed project will identify LEAs that have promising systems or policies and practices for supporting children's and families' effective use of AT and IT and incorporate that information into the development of the framework;
(5) Develop products and provide services that are of high quality and sufficient intensity and duration to achieve the intended outcomes of the proposed project. To address this requirement, the applicant must describe—
(i) How it proposes to identify or develop the knowledge base related to children's and families' effective use of AT and IT and the development of comprehensive and sustainable systems in LEAs to support that use;
(ii) Its proposed approach to universal, general TA,
(A) A plan to disseminate the framework and develop professional learning activities for LEAs to enhance their understanding and implementation of the framework; and
(B) A plan to identify and disseminate other relevant
resources, including those currently housed by the Center on Technology and Disability, on evidence-based AT and IT practices for children with disabilities and their families;
(iii) Its proposed approach to targeted, specialized TA
(A) The intended recipients, including the type and number of recipients, that will receive the products and services under this approach; and
(B) Its proposed approach to measure the readiness of potential TA recipients to work with the project, assessing, at a
(6) Develop products and implement services that maximize efficiency. To address this requirement, the applicant must describe—
(i) How the proposed project will use technology to achieve the intended project outcomes;
(ii) With whom the proposed project will collaborate and the intended outcomes of this collaboration; and
(iii) How the proposed project will use non-project resources to achieve the intended project outcomes.
(c) In the narrative section of the application under “Quality of the project evaluation,” include an evaluation plan for the project developed in consultation with and implemented by a third-party evaluator.
(1) Articulate formative and summative evaluation questions, including important process and outcome evaluation questions. These questions should be related to the project's proposed logic model required in paragraph (b)(2)(ii) of this notice;
(2) Describe how progress in and fidelity of implementation, as well as project outcomes will be measured to answer the evaluation questions. Specify the measures and associated instruments or sources for data appropriate to the evaluation questions. Include information regarding reliability and validity of measures where appropriate;
(3) Describe strategies for analyzing data and how data collected as part of this plan will be used to inform and improve service delivery over the course of the project and to refine the proposed logic model and evaluation plan, including subsequent data collection;
(4) Provide a timeline for conducting the evaluation, and include staff assignments for completing the plan. The timeline must indicate that the data will be available annually for the Annual Performance Report (APR) and at the end of Year 2 for the review process described under the heading,
(5) Dedicate sufficient funds in each budget year to cover the costs of developing or refining the evaluation plan in consultation with a “third-party” evaluator, as well as the costs associated with the implementation of the evaluation plan by the third-party evaluator.
(d) Demonstrate, in the narrative section of the application under “Adequacy of resources,” how—
(1) The proposed project will encourage applications for employment from persons who are members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disability, as appropriate;
(2) The proposed key project personnel, consultants, and subcontractors have the qualifications and experience to carry out the proposed activities and achieve the project's intended outcomes;
(3) The applicant and any key partners have adequate resources to carry out the proposed activities; and
(4) The proposed costs are reasonable in relation to the anticipated results and benefits.
(e) Demonstrate, in the narrative section of the application under “Quality of the management plan,” how—
(1) The proposed management plan will ensure that the project's intended outcomes will be achieved on time and within budget. To address this requirement, the applicant must describe—
(i) Clearly defined responsibilities for key project personnel, consultants, and subcontractors, as applicable; and
(ii) Timelines and milestones for accomplishing the project tasks;
(2) Key project personnel and any consultants and subcontractors will be allocated and how these allocations are appropriate and adequate to achieve the project's intended outcomes;
(3) The proposed management plan will ensure that the products and services provided are of high quality, relevant, and useful to recipients; and
(4) The proposed project will benefit from a diversity of perspectives, including those of families, educators, TA providers, researchers, and policy makers, among others, in its development and operation.
(f) Address the following application requirements. The applicant must—
(1) Include, in Appendix A, personnel-loading charts and timelines, as applicable, to illustrate the management plan described in the narrative;
(2) Include, in the budget, attendance at the following:
(i) A one and one-half day kick-off meeting in Washington, DC, after receipt of the award, and an annual planning meeting in Washington, DC, with the Office of Special Education Programs (OSEP) project officer and other relevant staff during each subsequent year of the project period.
(ii) A two and one-half day project directors' conference in Washington, DC, during each year of the project period;
(iii) One annual two-day trip to attend Department briefings, Department-sponsored conferences, and other meetings, as requested by OSEP; and
(iv) A one-day intensive 3+2 review meeting in Washington, DC, during the last half of the second year of the project period;
(5) Include, in the budget, a line item for an annual set-aside of five percent of the grant amount to support emerging needs that are consistent with the proposed project's intended outcomes, as those needs are identified in consultation with, and approved by, the OSEP project officer. With approval from the OSEP project officer, the project must reallocate any remaining funds from this annual set-aside no later than the end of the third quarter of each budget period;
(6) Maintain a high-quality website, with an easy-to-navigate design, that meets government or industry-recognized standards for accessibility; and
(7) Include, in Appendix A, an assurance to assist OSEP with the transfer of pertinent resources and products from the current Center for Technology and Disability and to maintain the continuity of services during the transition to this new Center and at the end of this award period, as appropriate.
(a) The recommendation of a 3+2 review team consisting of experts selected by the Secretary. This review will be conducted during a one-day intensive meeting that will be held during the last half of the second year of the project period;
(b) The timeliness with which, and how well, the requirements of the negotiated cooperative agreement have been or are being met by the project; and
(c) The quality, relevance, and usefulness of the project's products and services and the extent to which the project's products and services are aligned with the project's objectives and
(i) A randomized controlled trial employs random assignment of, for example, students, teachers, classrooms, or schools to receive the project component being evaluated (the treatment group) or not to receive the project component (the control group).
(ii) A regression discontinuity design study assigns the project component being evaluated using a measured variable (
(iii) A single-case design study uses observations of a single case (
(i) A practice guide prepared by the WWC using version 2.1 or 3.0 of the WWC Handbook reporting a “strong evidence base” or “moderate evidence base” for the corresponding practice guide recommendation;
(ii) An intervention report prepared by the WWC using version 2.1 or 3.0 of the WWC Handbook reporting a “positive effect” or “potentially positive effect” on a relevant outcome based on a “medium to large” extent of evidence, with no reporting of a “negative effect” or “potentially negative effect” on a relevant outcome; or
(iii) A single experimental study or quasi-experimental design study reviewed and reported by the WWC using version 2.1 or 3.0 of the WWC Handbook, or otherwise assessed by the Department using version 3.0 of the WWC Handbook, as appropriate, and that—
(A) Meets WWC standards with or without reservations;
(B) Includes at least one statistically significant and positive (
(C) Includes no overriding statistically significant and negative effects on relevant outcomes reported in the study or in a corresponding WWC intervention report prepared under version 2.1 or 3.0 of the WWC Handbook; and
(D) Is based on a sample from more than one site (
(i) A practice guide prepared by WWC reporting a “strong evidence base” or “moderate evidence base” for the corresponding practice guide recommendation;
(ii) An intervention report prepared by the WWC reporting a “positive effect” or “potentially positive effect” on a relevant outcome with no reporting of a “negative effect” or “potentially negative effect” on a relevant outcome; or
(iii) A single study assessed by the Department, as appropriate, that—
(A) Is an experimental study, a quasi-experimental design study, or a well-designed and well-implemented correlational study with statistical controls for selection bias (
(B) Includes at least one statistically significant and positive (
(i) A practice guide prepared by the WWC using version 2.1 or 3.0 of the WWC Handbook reporting a “strong evidence base” for the corresponding practice guide recommendation;
(ii) An intervention report prepared by the WWC using version 2.1 or 3.0 of the WWC Handbook reporting a “positive effect” on a relevant outcome based on a “medium to large” extent of evidence, with no reporting of a “negative effect” or “potentially negative effect” on a relevant outcome; or
(iii) A single experimental study reviewed and reported by the WWC using version 2.1 or 3.0 of the WWC Handbook, or otherwise assessed by the Department using version 3.0 of the WWC Handbook, as appropriate, and that—
(A) Meets WWC standards without reservations;
(B) Includes at least one statistically significant and positive (
(C) Includes no overriding statistically significant and negative effects on relevant outcomes reported in the study or in a corresponding WWC intervention report prepared under version 2.1 or 3.0 of the WWC Handbook; and
(D) Is based on a sample from more than one site (
The regulations in 34 CFR part 79 apply to all applicants except federally recognized Indian Tribes.
The regulations in 34 CFR part 86 apply to institutions of education (IHEs) only.
Contingent upon the availability of funds and the quality of applications, we may make additional awards in FY 2019 from the list of unfunded applications from this competition.
The Department is not bound by any estimates in this notice.
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(b) Each applicant for, and recipient of, funding must, with respect to the aspects of their proposed project relating to the absolute priority, involve individuals with disabilities, or parents of individuals with disabilities ages birth through 26, in planning, implementing, and evaluating the project (see section 682(a)(1)(A) of IDEA).
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• A “page” is 8.5″ x 11″, on one side only, with 1″ margins at the top, bottom, and both sides.
• Double-space (no more than three lines per vertical inch) all text in the application narrative, including titles, headings, footnotes, quotations, reference citations, and captions, as well as all text in charts, tables, figures, graphs, and screen shots.
• Use a font that is 12 point or larger.
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial.
The recommended page limit does not apply to Part I, the cover sheet; Part II, the budget section, including the narrative budget justification; Part IV, the assurances and certifications; or the abstract (follow the guidance provided in the application package for completing the abstract), the table of contents, the list of priority requirements, the resumes, the reference list, the letters of support, or the appendices. However, the recommended page limit does apply to all of the application narrative, including all text in charts, tables, figures, graphs, and screen shots.
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(a)
(1) The Secretary considers the significance of the proposed project.
(2) In determining the significance of the proposed project, the Secretary considers the following factors:
(i) The extent to which specific gaps or weaknesses in services, infrastructure, or opportunities have been identified and will be addressed by the proposed project, including the nature and magnitude of those gaps or weaknesses;
(ii) The potential contribution of the proposed project to increased knowledge or understanding of educational problems, issues, or effective strategies;
(iii) The extent to which the proposed project is likely to build local capacity to provide, improve, or expand services that address the needs of the target population; and
(iv) The potential replicability of the proposed project or strategies, including, as appropriate, the potential for implementation in a variety of settings.
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(1) The Secretary considers the quality of the services to be provided by the proposed project.
(2) In determining the quality of the services to be provided by the proposed project, the Secretary considers the quality and sufficiency of strategies for ensuring equal access and treatment for eligible project participants who are members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disability.
(3) In addition, the Secretary considers the following factors:
(i) The extent to which the goals, objectives, and outcomes to be achieved by the proposed project are clearly specified and measurable;
(ii) The extent to which the design of the proposed project includes a thorough, high-quality review of the relevant literature, a high-quality plan for project implementation, and the use of appropriate methodological tools to ensure successful achievement of project objectives;
(iii) The extent to which the design of the proposed project is appropriate to, and will successfully address, the needs of the target population or other identified needs;
(iv) The extent to which the training or professional development services to be provided by the proposed project are of sufficient quality, intensity, and duration to lead to improvements in practice among the recipients of those services;
(v) The extent to which the services to be provided by the proposed project involve the collaboration of appropriate partners for maximizing the effectiveness of project services; and
(vi) The extent to which the technical assistance services to be provided by the proposed project involve the use of efficient strategies, including the use of technology, as appropriate, and the leveraging of non-project resources.
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(1) The Secretary considers the quality of the evaluation to be conducted of the proposed project.
(2) In determining the quality of the evaluation, the Secretary considers the following factors:
(i) The extent to which the methods of evaluation are thorough, feasible, and appropriate to the goals, objectives, and outcomes of the proposed project;
(ii) The extent to which the methods of evaluation provide for examining the effectiveness of project implementation strategies;
(iii) The extent to which the methods of evaluation include the use of objective performance measures that are clearly related to the intended outcomes of the project and will produce quantitative and qualitative data to the extent possible;
(iv) The extent to which the methods of evaluation will provide performance feedback and permit periodic assessment of progress toward achieving intended outcomes; and
(v) The extent to which the evaluation will provide guidance about effective strategies suitable for replication or testing in other settings.
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(1) The Secretary considers the adequacy of resources and quality of project personnel for the proposed project.
(2) In determining the quality of project personnel, the Secretary considers the extent to which the applicant encourages applications for employment from persons who are members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disability.
(3) In determining the adequacy of resources and quality of the project personnel for the proposed project, the Secretary considers the following factors:
(i) The qualifications, including relevant training and experience, of the project director or principal investigator;
(ii) The qualifications, including relevant training and experience, of key project personnel;
(iii) The qualifications, including relevant training and experience, of project consultants or subcontractors;
(iv) The adequacy of support, including facilities, equipment, supplies, and other resources, from the applicant organization or the lead applicant organization;
(v) The relevance and demonstrated commitment of each partner in the proposed project to the implementation and success of the project; and
(vi) The extent to which the costs are reasonable in relation to the objectives, design, and potential significance of the proposed project.
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(1) The Secretary considers the quality of the management plan for the proposed project.
(2) In determining the quality of the management plan for the proposed project, the Secretary considers the following factors:
(i) The adequacy of the management plan to achieve the objectives of the proposed project on time and within budget, including clearly defined
(ii) The adequacy of procedures for ensuring feedback and continuous improvement in the operation of the proposed project;
(iii) The extent to which the time commitments of the project director and principal investigator and other key project personnel are appropriate and adequate to meet the objectives of the proposed project; and
(iv) How the applicant will ensure that a diversity of perspectives are brought to bear in the operation of the proposed project, including those of parents, teachers, the business community, a variety of disciplinary and professional fields, recipients or beneficiaries of services, or others, as appropriate.
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In addition, in making a competitive grant award, the Secretary requires various assurances, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department of Education (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
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Please note that, if the total value of your currently active grants, cooperative agreements, and procurement contracts from the Federal Government exceeds $10,000,000, the reporting requirements in 2 CFR part 200, Appendix XII, require you to report certain integrity information to FAPIIS semiannually. Please review the requirements in 2 CFR part 200, Appendix XII, if this grant plus all the other Federal funds you receive exceed $10,000,000.
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If your application is not evaluated or not selected for funding, we notify you.
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We reference the regulations outlining the terms and conditions of an award in the
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(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multiyear award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). For specific requirements on reporting, please go to
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• Program Performance Measure #1: The percentage of Educational Technology, Media, and Materials Program products and services judged to be of high quality by an independent review panel of experts qualified to review the substantial content of the products and services.
• Program Performance Measure #2: The percentage of Educational Technology, Media, and Materials Program products and services judged to be of high relevance to improving outcomes for infants, toddlers, children, and youth with disabilities.
• Program Performance Measure #3: The percentage of Educational Technology, Media, and Materials Program products and services judged to be useful in improving results for infants, toddlers, children, and youth with disabilities.
• Program Performance Measure #4.1: The Federal cost per unit of accessible educational materials funded by the Educational Technology, Media, and Materials Program.
• Program Performance Measure #4.2: The Federal cost per unit of accessible educational materials from the National Instructional Materials Accessibility Center funded by the Educational Technology, Media, and Materials Program.
• Program Performance Measure #4.3: The Federal cost per unit of video description funded by the Educational Technology, Media, and Materials Program.
These measures apply to projects funded under this competition, and grantees are required to submit data on these measures as directed by OSEP.
Grantees will be required to report information on their project's performance in annual and final performance reports to the Department (34 CFR 75.590).
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In making a continuation award, the Secretary also considers whether the grantee is operating in compliance with the assurances in its approved application, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
You may also access documents of the Department published in the
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
This is a supplemental notice in the above-referenced proceeding Sanford Energy Associates, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is July 23, 2018.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the website that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Take notice that the Commission received the following electric rate filings:
Take notice that the Commission received the following electric securities filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Environmental Protection Agency (EPA).
Notice of an event.
The Environmental Protection Agency (EPA) will host a Per- and Polyfluoroalkyl Substances (PFAS) community engagement in Horsham, Pennsylvania. The goal of the event is to allow the EPA to hear directly from Pennsylvania communities to understand ways the Agency can best support the work that is being done at the state and local level. For more information on the event, visit the EPA's PFAS website:
The event will be held on July 25, 2018. A working session will be held on July 25 from 10:00 a.m. to 3:00 p.m., eastern time. A listening session will be held on July 25 from 4:00 p.m. to 9:00 p.m., eastern time.
The event will be held at the Keith Valley Middle School, 227 Meetinghouse Road, Horsham, Pennsylvania 19044. If you are unable to attend the Pennsylvania Community Engagement, you will be able to submit comments at
Rick Rogers, USEPA Region 3, 1650 Arch Street (Mail Code 3WP20) Philadelphia, PA 19103-2029; telephone number: 215-814-5711; email address:
The EPA wants to assure the public that their input is valuable and meaningful. Using information from the National Leadership Summit, public docket, and community engagements, the EPA plans to develop a PFAS Management Plan for release later this year. A summary of the Pennsylvania Community Engagement will be made available to the public following the event on the EPA's PFAS Community Engagement website at:
Environmental Protection Agency (EPA).
Notice.
In accordance with the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), EPA is issuing a notice of receipt of requests by the registrants to voluntarily cancel certain pesticide product registrations and to amend certain product registrations to terminate uses. EPA intends to grant these requests at the close of the comment period for this announcement unless the Agency receives substantive comments within the comment period that would merit its further review of the requests, or unless the registrants withdraw their requests. If these requests are granted, any sale, distribution, or use of products listed in this notice will be permitted after the registrations have been cancelled and uses terminated only if such sale, distribution, or use is consistent with the terms as described in the final order.
Comments must be received on or before January 7, 2019.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPP-2018-0014, by one of the following methods:
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Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
Christopher Green, Information Technology and Resources Management Division (7502P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; telephone number: (703) 347-0367; email address:
This action is directed to the public in general, and may be of interest to a wide range of stakeholders including environmental, human health, and agricultural advocates; the chemical industry; pesticide users; and members of the public interested in the sale, distribution, or use of pesticides. Since others also may be interested, the Agency has not attempted to describe all the specific entities that may be affected by this action.
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This notice announces receipt by EPA of requests from pesticide registrants to cancel certain pesticide products and amend product registrations to terminate certain uses. The affected products and the registrants making the requests are identified in Tables 1, 2 and 3 of this unit.
Unless a request is withdrawn by the registrant or if the Agency determines that there are substantive comments that warrant further review of this request, EPA intends to issue an order in the
Table 3 of this unit includes the names and addresses of record for the registrants of the products listed in Table 1 and Table 2 of this unit, in sequence by EPA company number. This number corresponds to the first part of the EPA registration numbers of the products listed in Table 1 and Table 2 of this unit.
Section 6(f)(1) of FIFRA (7 U.S.C. 136d(f)(1)) provides that a registrant of a pesticide product may at any time request that any of its pesticide registrations be canceled or amended to terminate one or more uses. FIFRA further provides that, before acting on the request, EPA must publish a notice of receipt of any such request in the
Section 6(f)(1)(B) of FIFRA (7 U.S.C. 136d(f)(1)(B)) requires that before acting on a request for voluntary cancellation, EPA must provide a 30-day public comment period on the request for voluntary cancellation or use termination. In addition, FIFRA section 6(f)(1)(C) (7 U.S.C. 136d(f)(1)(C)) requires that EPA provide a 180-day comment period on a request for voluntary cancellation or termination of any minor agricultural use before granting the request, unless:
1. The registrants request a waiver of the comment period, or
2. The EPA Administrator determines that continued use of the pesticide would pose an unreasonable adverse effect on the environment.
The registrants listed in Table 3 of Unit II have not requested that EPA waive the 180-day comment period. Accordingly, EPA will provide a 180-day comment period on the proposed requests.
Registrants who choose to withdraw a request for product cancellation or use termination should submit the withdrawal in writing to the person listed under
Existing stocks are those stocks of registered pesticide products that are currently in the United States and that were packaged, labeled, and released for shipment prior to the effective date of the action. If the requests for voluntary cancellation and amendments to terminate uses are granted, the Agency intends to publish the cancellation order in the
In any order issued in response to these requests for cancellation of product registrations and for amendments to terminate uses, EPA proposes to include the following provisions for the treatment of any existing stocks of the products listed in Tables 1 and 2 of Unit II.
For the voluntary product cancellations, identified in Table 1 of Unit II, registrants will be permitted to sell and distribute existing stocks of voluntarily canceled products for 1 year after the effective date of the cancellation, which will be the date of publication of the cancellation order in the
Once EPA has approved product labels reflecting the requested amendments to terminate uses, identified in Table 2 of Unit II, registrants will be permitted to sell or distribute products under the previously
Persons other than the registrant may sell, distribute, or use existing stocks of canceled products and products whose labels include the terminated uses until supplies are exhausted, provided that such sale, distribution, or use is consistent with the terms of the previously approved labeling on, or that accompanied, the canceled products and terminated uses.
7 U.S.C. 136
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) is planning to submit an information collection request (ICR), “Air Emissions Reporting Requirements (Renewal)” (EPA ICR No. 2170.07, OMB Control No. 2060-0580) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. Before doing so, EPA is soliciting public comments on specific aspects of the proposed information collection as described below. This is a proposed extension of the ICR, which is currently approved through December 31, 2018. 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.
Comments must be submitted on or before September 10, 2018.
Submit your comments, referencing Docket ID No. EPA-HQ-OAR-2004-0489, online using
EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Marc Houyoux, Air Quality Assessment Division, Office of Air Quality Planning and Standards, (C339-02), Environmental Protection Agency, 109 TW Alexander Drive, RTP, NC 27711; telephone number: (919) 541-3649; email address:
Supporting documents which explain in detail the information that the EPA will be collecting are available in the public docket for this ICR. The docket can be viewed online at
Pursuant to section 3506(c)(2)(A) of the PRA, EPA is soliciting comments and information to enable it to: (i) 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; (ii) 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; (iii) enhance the quality, utility, and clarity of the information to be collected; and (iv) 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,
In addition, the air quality agencies must submit annually emission data for point sources with the potential to emit at greater than specified levels of those pollutants. The data supplied to the emission reporting requirement is needed so that the EPA can compile and make available a national inventory of air pollutant emissions. A comprehensive inventory updated at regular intervals is essential to allow the EPA to fulfill its mandate to monitor and plan for the attainment and maintenance of the national ambient air quality standards established for criteria pollutants.
The number and frequency of data collection and submittal is expected to remain the same for 2019-2021.
Environmental Protection Agency (EPA).
Notice of proposed settlement; request for public comment.
In accordance with the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), notice is hereby given that the Environmental Protection Agency (“EPA”), has entered into a proposed settlement, embodied in an Administrative Settlement Agreement and Order on Consent for Removal Action (“Settlement Agreement”), with Nexeo Solutions, LLC and Ashland, LLC. Under the Settlement Agreement, Nexeo Solutions, LLC on behalf of Nexeo Solutions, LLC and on behalf of Ashland, LLC will pay EPA $31,111.71. Nexeo Solutions, LLC is paying a
For thirty (30) days beginning the date of publication of this notice, the Agency will receive written comments relating to this notice and will receive written comments relating to the settlement. The Agency will consider all comments received and may modify or withdraw its consent to the settlement if comments received disclose facts or considerations which indicate that the settlement is inappropriate, improper or inadequate. The Agency's response to any comments received will be available for public inspection at 1445 Ross Avenue, Dallas, Texas 75202-2733.
Comments must be submitted on or before August 9, 2018.
The Settlement Agreement is available for public inspection at 1445 Ross Avenue, Dallas, Texas 75202-2733 or by calling 214-665-6529. Comments should reference the Ector Drum Superfund Site, d/b/a Lone Star Drum Superfund Site (“Site”), located in the city of Odessa, Ector County, Texas and be addressed to David Eppler, Enforcement Officer, Superfund Division (6SF-TE), U.S. Environmental Protection Agency, 1445 Ross Avenue, Dallas, Texas 75202-2733; or email:
James E. Costello, Practice Group Leader, 1445 Ross Avenue, Dallas, Texas 75202-2733; or call (214) 665-8045.
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 25, 2018.
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The companies listed in this notice have applied to the Board for approval, pursuant to the Home Owners' Loan Act (12 U.S.C. 1461
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The application also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the HOLA (12 U.S.C. 1467a(e)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 10(c)(4)(B) of the HOLA (12 U.S.C. 1467a(c)(4)(B)). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than August 1, 2018.
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Additionally, the Jamestown Trust #3 and the Geesala Trust #3 have applied to acquire all of the shares of Prospect Financial Corporation's from the other Jamestown Trusts and Geesala Trusts Warwick, Rhode Island.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than August 1, 2018.
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Section 2 of the Improper Payments Information Act of 2002 (IPIA) provides for estimates and reports of improper payments by Federal agencies. Subpart K of 45 CFR, Part 98 of the Child Care and Development Fund requires States to prepare and submit a report of errors occurring in the administration of CCDF grant funds once every three years.
The Office of Child Care (OCC) is completing the fourth 3-year cycle of case record reviews to meet the requirements for reporting under IPIA. The current data collection forms and instructions expire August 31, 2018. As part of the renewal process, OCC has revised the document with minor changes that do not change the methodology, but which provide respondents with additional guidance, clarification, and support to facilitate the completeness and accuracy of the required data submissions. In addition, questions regarding state processes that previously existed in Section III Creating the Sampling Decisions, Assurances, and Fieldwork Preparation Plan on page 5, have been reformatted into a template to facilitate the submission of this information. Two questions added are a description of the process for determining the annual amount of payments and the projected start date for conducting the case record reviews.
OCC is particularly interested in feedback regarding the ease and accuracy with which respondents that pool or combine funds can provide data regarding the pooled funds. Items addressing pooled funds are located primarily in Section VII Completing and Submitting the State Improper Payments Report on pages 43-45 and in the State Improper Payments Report template (Attachment 3) beginning on page 65.
U.S. Customs and Border Protection (CBP), Department of Homeland Security (DHS).
Committee Management; Notice of Federal Advisory Committee Charter Renewal.
The Secretaries of the Department of the Treasury and the Department of Homeland Security approved the renewal of the charter for the Commercial Customs Operations Advisory Committee (COAC). The committee's charter is effective May 15, 2018, and expires May 15, 2020. Section 109 of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA) established the COAC. The committee operates in accordance with the provisions of the Federal Advisory Committee Act (5 U.S.C. App.), except as otherwise provided for in section 109 of TFTEA. The COAC is a statutory advisory committee that provides the Department of the Treasury and the Department of Homeland Security with the perspectives and advice of the private sector.
If you desire to submit comments on this action, they must be submitted by September 10, 2018. Comments must be identified by (Docket No. USCBP-2018-0020) and may be submitted by
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Ms. Florence Constant-Gibson, Office of Trade Relations, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue NW, Room 3.5A, Washington, DC 20229; telephone (202) 344-1440; facsimile (202) 325-4290.
The COAC charter can be found at
Bureau of Land Management, Interior.
Notice.
As provided for under the Mineral Leasing Act of 1920, as amended, the Bureau of Land Management (BLM) received a petition for reinstatement of competitive oil and gas lease WYW087880 from Samson Resources Company for land in Converse County, Wyoming. The lessee filed the petition on time, along with all rentals due since the lease terminated under the law. No leases affecting this land were issued before the petition was filed. The BLM proposes to reinstate the lease.
Chris Hite, Branch Chief for Fluid Minerals Adjudication, Bureau of Land Management, Wyoming State Office, 5353 Yellowstone Road, P.O. Box 1828, Cheyenne, Wyoming, 82003; phone 307-775-6176; email
Persons who use a telecommunications device for the deaf may call the Federal Relay Service (FRS) at 1-800-877-8339 to contact Mr. Hite during normal business hours. The FRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individual. A reply will be sent during normal business hours.
The lessee agreed to the amended lease terms for rentals and royalties at rates of $10 per acre, or fraction thereof, per year and 16
30 U.S.C. 188 (e)(4) and 43 CFR 3108.2-3 (b)(2)(v).
Bureau of Land Management, Interior.
Notice.
As provided for under the Mineral Leasing Act of 1920, as amended, the Bureau of Land Management (BLM) received a petition for reinstatement of competitive oil and gas lease WYW174754 from Hot Springs Resources Ltd for land in Natrona County, Wyoming. The lessee filed the petition on time, along with all rentals due since the lease terminated under the law. No leases affecting this land were issued before the petition was filed. The BLM proposes to reinstate the lease.
Erik Norelius, Acting Branch Chief for Fluid Minerals Adjudication, Bureau of Land Management, Wyoming State Office, 5353 Yellowstone Road, P.O. Box 1828, Cheyenne, Wyoming, 82003; phone 307-775-6176; email
Persons who use a telecommunications device for the deaf may call the Federal Relay Service (FRS) at 1-800-877-8339 to contact Mr. Norelius during normal business hours. The FRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individual. A reply will be sent during normal business hours.
The lessee agreed to the amended lease terms for rentals and royalties at rates of $10 per acre, or fraction thereof, per year and 16
30 U.S.C. 188(e)(4) and 43 CFR 3108.2-3(b)(2)(v).
Bureau of Land Management, Interior.
Notice.
As provided for under the Mineral Leasing Act of 1920, as amended, the Bureau of Land Management (BLM) received a petition for reinstatement of competitive oil and gas lease WYW176517 from Chesapeake Exploration LLC., Khody Land & Minerals Company and OOGC America Inc. for land in Converse County, Wyoming. The lessees filed the petition on time, along with all rentals due since the lease terminated under the law. No leases affecting this land were issued before the petition was filed. The BLM proposes to reinstate the lease.
Erik Norelius, Acting Branch Chief for Fluid Minerals Adjudication, Bureau of Land Management, Wyoming State Office, 5353 Yellowstone Road, P.O. Box 1828, Cheyenne, Wyoming, 82003; phone 307-775-6176; email
Persons who use a telecommunications device for the deaf may call the Federal Relay Service (FRS) at 1-800-877-8339 to contact Mr. Norelius during normal business hours. The FRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individual. A reply will be sent during normal business hours.
The lessee agreed to the amended lease terms for rentals and royalties at rates of $10 per acre, or fraction thereof, per year and 16
30 U.S.C. 188(e)(4) and 43 CFR 3108.2-3(b)(2)(v).
Bureau of Land Management, Interior.
Notice.
As provided for under the Mineral Leasing Act of 1920, as amended, the Bureau of Land Management (BLM) received a petition for reinstatement of competitive oil and gas lease WYW178348 from Wold Energy Partners LLC, Samson Resources Company, and GasCo LP for land in Converse County, Wyoming. The lessees filed the petition on time, along with all rentals due since the lease terminated under the law. No leases affecting this land were issued before the petition was filed. The BLM proposes to reinstate the lease.
Erik Norelius, Acting Branch Chief for Fluid Minerals Adjudication, Bureau of Land Management, Wyoming State Office, 5353 Yellowstone Road, P.O. Box 1828, Cheyenne, Wyoming, 82003; phone 307-775-6176; email
Persons who use a telecommunications device for the deaf may call the Federal Relay Service (FRS) at 1-800-877-8339 to contact Mr. Norelius during normal business hours. The FRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individual. A reply will be sent during normal business hours.
The lessee agreed to the amended lease terms for rentals and royalties at rates of $10 per acre, or fraction thereof, per year and 16
30 U.S.C. 188(e)(4) and 43 CFR 3108.2-3(b)(2)(v).
Bureau of Land Management, Interior.
Notice of proposed reinstatement.
As provided for under the Mineral Leasing Act of 1920, as amended, the Bureau of Land Management (BLM) received a petition for reinstatement of competitive oil and gas lease WYW096788 from Bearcat Energy LLC (Colorado), Elly B Beard 2007 Trust and Leeman Minerals LLC for land in Converse County, Wyoming. The lessees filed the petition on time, along with all rentals due since the lease terminated under the law. No leases affecting this land were issued before the petition was filed. The BLM proposes to reinstate the lease.
Chris Hite, Branch Chief for Fluid Minerals Adjudication, Bureau of Land Management, Wyoming State Office, 5353 Yellowstone Road, P.O. Box 1828, Cheyenne, Wyoming, 82003; phone 307-775-6176; email
Persons who use a telecommunications device for the deaf may call the Federal Relay Service (FRS) at 1-800-877-8339 to contact Mr. Hite during normal business hours. The FRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individual. A reply will be sent during normal business hours.
The lessees agreed to the amended lease terms for rentals and royalties at rates of $10 per acre, or fraction thereof, per year and 16
Bureau of Land Management, Interior.
Notice.
As provided for under the Mineral Leasing Act of 1920, as amended, the Bureau of Land Management (BLM) received a petition for reinstatement of competitive oil and gas lease WYW178259 from RKI Exploration and Production LLC, Chesapeake Exploration LLC, and OOGC America Inc. for land in Converse County, Wyoming. The lessees filed the petition on time, along with all rentals due since the lease terminated under the law. No leases affecting this land were issued before the petition was filed. The BLM proposes to reinstate the lease.
Chris Hite, Branch Chief for Fluid Minerals Adjudication, Bureau of Land Management, Wyoming State Office, 5353 Yellowstone Road, P.O. Box 1828, Cheyenne, Wyoming, 82003; phone 307-775-6176; email
Persons who use a telecommunications device for the deaf may call the Federal Relay Service (FRS) at 1-800-877-8339 to contact Mr. Norelius during normal business hours. The FRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individual. A reply will be sent during normal business hours.
The lessee agreed to the amended lease terms for rentals and royalties at rates of $10 per acre, or fraction thereof, per year and 16
30 U.S.C. 188(e)(4) and 43 CFR 3108.2-3(b)(2)(v).
Bureau of Land Management, Interior.
Notice.
As provided for under the Mineral Leasing Act of 1920, as amended, the Bureau of Land Management (BLM) received a petition for reinstatement of competitive oil and gas lease WYW180628 from Kirkwood Oil & Gas LLC for land in Converse County, Wyoming. The lessee filed the petition on time, along with all rentals due since the lease terminated under the law. No leases affecting this land were issued before the petition was filed. The BLM proposes to reinstate the lease.
Erik Norelius, Acting Branch Chief for Fluid Minerals Adjudication, Bureau of Land Management, Wyoming State Office, 5353 Yellowstone Road, P.O. Box 1828, Cheyenne, Wyoming, 82003; phone 307-775-6176; email
Persons who use a telecommunications device for the deaf may call the Federal Relay Service (FRS) at 1-800-877-8339 to contact Mr. Norelius during normal business hours. The FRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individual. A reply will be sent during normal business hours.
The lessee agreed to the amended lease terms for rentals and royalties at rates of $10 per acre, or fraction thereof, per year and 16
30 U.S.C. 188 (e)(4) and 43 CFR 3108.2-3 (b)(2)(v).
Bureau of Land Management, Interior.
Notice.
As provided for under the Mineral Leasing Act of 1920, as amended, the Bureau of Land Management (BLM) received a petition for reinstatement of competitive oil and gas lease WYW087867 from Charger Resources LLC, EOG Resources Inc., G F Collins JR Trust, L W Moncrief Trust, Michael J Moncrief Grantor Trust, Mindyanne E Moncrief Trust, Moncrief C B, Moncrief Oil & gas Master LLC, Monty Brennan Moncrief Trust, Muirfield Resources Company, R B C Exploration Company, Richard J Moncrief 1988 Trust, RWM 1988 Trust, Ryder Stilwell Oil, T O Moncrief Trust, and W A Moncrief III Trust for land in Converse County, Wyoming. The lessee filed the petition on time, along with all rentals due since the lease terminated under the law. No leases affecting this land were issued before the petition was filed. The BLM proposes to reinstate the lease.
Erik Norelius, Acting Branch Chief for Fluid Minerals Adjudication, Bureau of Land Management, Wyoming State Office, 5353 Yellowstone Road, P.O. Box 1828, Cheyenne, Wyoming, 82003; phone 307-775-6176; email
Persons who use a telecommunications device for the deaf may call the Federal Relay Service (FRS) at 1-800-877-8339 to contact Mr. Norelius during normal business hours. The FRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individual. A reply will be sent during normal business hours.
The lessees agreed to the amended lease terms for rentals and royalties at rates of $10 per acre, or fraction thereof, per year and 16
30 U.S.C. 188(e)(4) and 43 CFR 3108.2-3(b)(2)(v).
U.S. International Trade Commission.
Notice.
Notice is hereby given that the presiding administrative law judge has issued a final initial determination and a recommended determination on remedy and bond in the above-captioned investigation. The Commission is soliciting comments on public interest issues raised by the recommended relief, namely: (1) A limited exclusion order against certain robotic vacuum cleaning devices and components thereof, which are imported, sold for importation, and/or sold after importation by respondents Hoover, Inc. of Glenwillow, Ohio; Royal Appliance Manufacturing Co., Inc. d/b/a TTI Floor Care North America, Inc. of Glenwillow, Ohio; BObsweep, Inc. of Toronto, Canada; BObsweep USA of Henderson, Nevada; Shenzhen ZhiYi Technology Co., Ltd., d/b/a iLife of Shenzhen, China; and Shenzhen Silver Star Intelligent Technology Co., Ltd. of Shenzhen, China; and (2) cease and desist orders against respondents Hoover, Inc.; Royal Appliance Manufacturing Co., Inc.; and Shenzhen ZhiYi Technology Co., Ltd. This notice is soliciting public interest comments from the public only. Parties are to file public interest submissions pursuant to Commission rules.
Lucy Grace D. Noyola, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone 202-205-3438. Copies of non-confidential documents filed in connection with this investigation are or will be available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
Section 337 of the Tariff Act of 1930 provides that if the Commission finds a violation it shall exclude the articles concerned from the United States:
The Commission is interested in further development of the record on the public interest in these investigations. Accordingly, parties are to file public interest submissions pursuant to 19 CFR 210.50(a)(4). In addition, members of the public are hereby invited to file submissions of no more than five (5) pages, inclusive of attachments, concerning the public interest in light of the administrative
In particular, the Commission is interested in comments that:
(i) Explain how the articles potentially subject to the recommended orders are used in the United States;
(ii) Identify any public health, safety, or welfare concerns in the United States relating to the recommended orders;
(iii) Identify like or directly competitive articles that complainants, their licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) Indicate whether complainants, complainants' licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to the recommended exclusion order and/or a cease and desist order within a commercially reasonable time; and
(v) Explain how the LEO and CDO would impact consumers in the United States.
Written submissions from the public must be filed no later than close of business on Friday, August 3, 2018.
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 section 210.4(f) of the Commission's Rules of Practice and Procedure (19 CFR 210.4(f)). Submissions should refer to the investigation number (“Inv. No. 337-TA-1057”) 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 sections 201.10 and 210.50 of the Commission's Rules of Practice and Procedure (19 CFR 201.10, 210.50).
By order of the Commission.
National Aeronautics and Space Administration (NASA).
Notice of information collection.
The National Aeronautics and Space Administration, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
All comments should be submitted within 60 calendar days from the date of this publication.
All comments should be addressed to Gatrie Johnson, Mail Code JF000, National Aeronautics and Space Administration, Washington, DC 20546-0001 or
Gatrie Johnson, 202-358-1013.
The information submitted by the public is a license application for those companies and individuals who wish to obtain a patent license for a NASA patented technology. Information needed for the license application in ATLAS may include supporting documentation such as a certificate of incorporation, a financial statement, a business and/or commercialization plan, a projected revenue/royalty spreadsheet and a company balance sheet. At a minimum, all license applicants must submit a satisfactory plan for the development and/or marketing of an invention. The collected information is used by NASA to ensure that companies that seek to commercialize NASA technologies have a solid business plan for bringing the technology to market.
NASA is participating in Federal efforts to extend the use of information technology to more Government processes via internet. NASA encourages recipients to use the latest computer technology in preparing documentation. Companies and individuals submit license applications by completing the automated form by way of the Automated Technology Licensing Application System (ATLAS). NASA requests all license applications to be submitted via electronic means.
In notice document 2018-12919, appearing on pages 31190-31197 in the Issue of Tuesday, July 3, 2018, make the following correction:
On page 31180, in the third column, under the heading
Nuclear Regulatory Commission.
NUREG; issuance.
The U.S. Nuclear Regulatory Commission (NRC) has issued Revision 1 to NUREG-1556, Volume 12, “Consolidated Guidance About Materials Licenses: Program Specific Guidance About Possession Licenses for Manufacturing and Distribution;” NUREG-1556, Volume 14, “Consolidated Guidance About Materials Licenses: Program-Specific Guidance About Well Logging, Tracer, and Field Flood Study Licenses;” and NUREG-1556, Volume 21, “Consolidated Guidance About Materials Licenses: Program-Specific Guidance About Possession Licenses for Production of Radioactive material Using an Accelerator.” NUREG-1556, Volumes 12, 14, and 21 have been revised to include information on updated regulatory requirements, safety culture, security of radioactive materials, protection of sensitive information, and changes in regulatory policies and practices. These volumes are intended for use by applicants, licensees, and the NRC staff.
NUREG-1556, Volume 14, Revision 1, was published in April 2018, and NUREG-1556, Volumes 12 and 21, Revision 1, were published in May 2018.
Please refer to Docket ID NRC-2016-0053 (NUREG-1556, Vol. 12, Rev. 1), Docket ID NRC-2014-0119 (NUREG-1556, Vol. 14, Rev. 1) and NRC-2016-0158 (NUREG-1556, Vol. 21, Rev. 1) when contacting the NRC about the availability of information regarding these documents. You may obtain publicly-available information related to these documents using any of the following methods:
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Anthony McMurtray, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2746; email:
The NRC issued revisions to NUREG-1556, Volumes 12, 14, and 21, to provide guidance to existing materials licensees covered under these types of licenses and to applicants preparing an application for one of these types of materials licenses. These NUREG volumes also provide the NRC staff with criteria for evaluating these types of license applications. The purpose of this notice is to notify the public that the NUREG-1556 volumes listed in this
The NRC published notices of the availability of the draft report for comment in the
These NUREG volumes are rules as defined in the Congressional Review Act (5 U.S.C. 801-808). However, the Office of Management and Budget has not found these NUREG revisions to be major rules as defined in the Congressional Review Act.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Exemption and combined license amendment; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is granting an exemption to allow a departure from the certification information of Tier 1 of the generic AP1000 design control document (DCD) and is issuing License Amendment Nos. 121 and 120 to Combined Licenses (COL), NPF-91 and NPF-92, respectively. The COLs were issued to Southern Nuclear Operating Company, Inc., and Georgia Power Company, Oglethorpe Power Corporation, MEAG Power SPVM, LLC, MEAG Power SPVJ, LLC, MEAG Power SPVP, LLC, and the City of Dalton, Georgia (the licensee); for construction and operation of the Vogtle Electric Generating Plant (VEGP) Units 3 and 4, located in Burke County, Georgia.
The granting of the exemption allows the changes to Tier 1 information that is requested in the amendment. Because the acceptability of the exemption was determined in part by the acceptability of the amendment, the exemption and amendment are being issued concurrently.
The exemption and amendment were issued on April 18, 2018.
Please refer to Docket ID NRC-2008-0252 when contacting the NRC about the availability of information regarding this document. You may access information related to this document, which the NRC possesses and is publicly available, using any of the following methods:
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•
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Paul Kallan, Office of New Reactors, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2809; email:
The NRC is granting exemptions from paragraph B of section III, “Scope and Contents,” of appendix D, “Design Certification Rule for the AP1000,” to part 52 of title 10 of the
Part of the justification for granting the exemptions was provided by the review of the amendments. Because the exemption is necessary in order to issue the requested license amendment, the NRC granted the exemptions and issued the amendments concurrently, rather than in sequence. This included issuing a combined safety evaluation containing the NRC staff's review of both the exemption request and the license amendment. The exemptions met all applicable regulatory criteria set forth in 10 CFR 50.12, 10 CFR 52.7, and Section VIII.A.4 of appendix D to 10 CFR part 52. The license amendments were found to be acceptable as well. The combined safety evaluation is available in ADAMS under Accession No. ML17320A798.
Identical exemption documents (except for referenced unit numbers and license numbers) were issued to the licensee for VEGP Units 3 and 4 (COLs NPF-91 and NPF-92). The exemption documents for VEGP Units 3 and 4 can be found in ADAMS under Accession Nos. ML18072A054 and ML18072A055, respectively. The exemption is reproduced (with the exception of abbreviated titles and additional citations) in Section II of this document. The amendment documents for COLs NPF-91 and NPF-92 are available in ADAMS under Accession Nos. ML18072A056 and ML18072A058, respectively. A summary of the amendment documents is provided in Section III of this document.
Reproduced below is the exemption document issued to VEGP, Units 3 and Unit 4. It makes reference to the combined safety evaluation that provides the reasoning for the findings made by the NRC (and listed under Item 1) in order to grant the exemption:
1. In a letter dated August 30, 2017, and supplemented by letter dated January 12, 2018, the licensee requested from the Commission an exemption from the provisions of 10 CFR part 52, appendix D, section III.B, as part of license amendment request (LAR) 17-018, “Class 1E Motor-Operated Valve Terminal Voltage Testing.”
For the reasons set forth in Section 3.1, “Evaluation of Exemption,” of the NRC staff's safety evaluation, which can be found in ADAMS under Accession No. ML17320A798, the Commission finds that:
A. The exemption is authorized by law;
B. The exemption presents no undue risk to public health and safety;
C. The exemption is consistent with the common defense and security;
D. Special circumstances are present in that the application of the rule in this circumstance is not necessary to serve the underlying purpose of the rule;
E. The special circumstances outweigh any decrease in safety that may result from the reduction in standardization caused by the exemption; and
F. The exemption will not result in a significant decrease in the level of safety otherwise provided by the design.
2. Accordingly, the licensee is granted an exemption from the certified DCD Tier 1 information, with corresponding changes to Appendix C of the Facility Combined Licenses as described in the licensee's request dated August 30, 2017, as supplemented by letter dated January 12, 2018. This exemption is related to, and necessary for, the granting of License Amendment Nos. 121 and 120, which is being issued concurrently with this exemption.
3. As explained in Section 5.0, “Environmental Consideration,” of the NRC staff's safety evaluation (ADAMS Accession No. ML17320A798), this exemption meets the eligibility criteria for categorical exclusion set forth in 10 CFR 51.22(c)(9). Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment needs to be prepared in connection with the issuance of the exemption.
4. These exemptions are effective as of the date of its issuance.
By letter dated August 30, 2017, and supplemented by letter dated January 12, 2018, the licensee requested that the NRC amend the COLs for VEGP, Units 3 and 4, COLs NPF-91 and NPF-92. The proposed amendment is described in Section I of this
The Commission has determined for these amendments that the application complies with the standards and requirements of the Atomic Energy Act of 1954, as amended (the Act), and the Commission's rules and regulations. The Commission has made appropriate findings as required by the Act and the Commission's rules and regulations in 10 CFR chapter I, which are set forth in the license amendment.
A notice of consideration of issuance of amendment to facility operating license or combined license, as applicable, proposed no significant hazards consideration determination, and opportunity for a hearing in connection with these actions, was published in the
The Commission has determined that these amendments satisfy the criteria for categorical exclusion in accordance with 10 CFR 51.22. Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared for these amendments.
Using the reasons set forth in the combined safety evaluation, the staff granted the exemption and issued the amendment that the licensee requested on August 30, 2017, and supplemented on January 12, 2018.
The exemptions and amendments were issued on April 18, 2018, as part of a combined package to the licensee (ADAMS Accession No. ML18072A051).
For the Nuclear Regulatory Commission.
In notice document 2018-13758, appearing on pages 31180-31190 in the Issue of Tuesday, July 3, 2018, make the following correction:
On page 31180, in the second column, under the heading
Nuclear Regulatory Commission.
Proposed state agreement; request for comment.
By letter dated November 14, 2017, Governor Matthew H. Mead of the State of Wyoming requested that the U.S. Nuclear Regulatory Commission (NRC or Commission) enter into an Agreement with the State of Wyoming as authorized by Section 274b. of the Atomic Energy Act of 1954, as amended (AEA).
Under the proposed Agreement, the Commission would discontinue, and the State of Wyoming would assume, regulatory authority over the management and disposal of byproduct materials as defined in Section 11e.(2) of the AEA and a subcategory of source material associated with uranium or thorium milling within the State. Pursuit to Commission direction, the proposed Agreement would state that the NRC will retain regulatory authority over the American Nuclear Corporation (ANC) license.
As required by Section 274e. of the AEA, the NRC is publishing the proposed Agreement for public comment. The NRC is also publishing the summary of a draft assessment by the NRC staff of the State of Wyoming's regulatory program. Comments are requested on the proposed Agreement, especially its effect on public health and safety. Comments are also requested on the draft staff assessment, the adequacy of the State of Wyoming's program, and the State's program staff, as discussed in this notice.
The proposed Agreement would exempt persons who possess or use byproduct materials as defined in Section 11e.(2) of the AEA and a subcategory of source material involved in the extraction or concentration of uranium or thorium in source material or ores at uranium or thorium milling facilities in the State of Wyoming from portions of the Commission's regulatory authority. Radioactive materials not covered by the proposed Agreement will continue to be subject to the Commission's regulatory authority. Section 274e. of the AEA requires that the NRC publish these exemptions. Notice is hereby given that the pertinent exemptions have been previously
The NRC is giving notice once each week for four consecutive weeks of the proposed Agreement. This is the second notice that has been published.
Submit comments by July 26, 2018. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received before this date.
You may submit comments by the following method:
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Stephen Poy, Office of Nuclear Material Safety and Safeguards, telephone: 301-415-7135, email:
Please refer to Docket ID NRC-2018-0104 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:
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• NRC's PDR: You may examine and purchase copies of public documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.
Please include Docket ID NRC-2018-0104 in your comment submission. The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
Since Section 274 of the AEA was added in 1959, the Commission has entered into Agreements with 37 States (Agreement States). The 37 Agreement States currently regulate approximately 16,500 Agreement material licenses, while the NRC regulates approximately 2,800 licenses. Under the proposed Agreement, 14 NRC uranium mill licenses will transfer to the State of Wyoming. The NRC periodically reviews the performance of the Agreement States to assure compliance with the provisions of Section 274.
Section 274e. of the AEA requires that the terms of the proposed Agreement be published in the
(a) Section 274b. of the AEA provides the mechanism for a State to assume regulatory authority from the NRC over certain radioactive materials and activities that involve use of these materials. The radioactive materials, sometimes referred to as “Agreement materials,” are byproduct materials as defined in Sections 11e.(1), 11e.(2), 11e.(3), and 11e.(4) of the AEA; source material as defined in Section 11z. of the AEA; and special nuclear material as defined in Section 11aa. of the AEA, restricted to quantities not sufficient to form a critical mass.
The radioactive materials and activities (which together are usually referred to as the “categories of materials”) that the State of Wyoming requests authority over are the possession and use of byproduct materials as defined in Section 11e.(2) of the AEA and a subcategory of source material involved in the extraction or concentration of uranium or thorium in source material or ores at uranium or thorium milling facilities (source material associated with milling activities).
(b) The proposed Agreement contains articles that
(i) Specify the materials and activities over which authority is transferred;
(ii) Specify the materials and activities over which the Commission will retain regulatory authority;
(iii) Continue the authority of the Commission to safeguard special nuclear material, and restricted data and protect common defense and security;
(iv) Commit the State of Wyoming and the NRC to exchange information as necessary to maintain coordinated and compatible programs;
(v) Provide for the reciprocal recognition of licenses;
(vi) Provide for the suspension or termination of the Agreement; and
(vii) Specify the effective date of the proposed Agreement.
The Commission reserves the option to modify the terms of the proposed Agreement in response to comments, to correct errors, and to make editorial changes. The final text of the proposed Agreement, with the effective date, will be published after the Agreement is approved by the Commission and signed by the NRC Chairman and the Governor of Wyoming.
(c) The regulatory program is authorized by law under the State of Wyoming Statute Section 35-11-2001, which provides the Governor with the authority to enter into an Agreement
(d) The NRC draft staff assessment finds that the Wyoming Department of Environmental Quality, Land Quality Division, Uranium Recovery Program, is adequate to protect public health and safety and is compatible with the NRC program for the regulation of Agreement materials. Pursuant to Commission direction, the proposed Agreement includes a provision that the State of Wyoming has until the end of the 2019 legislative session to amend Wyoming Statute Section 35-11-2004(c) to be compatible with AEA Section 83b.(1)(A), or the Agreement will terminate without further NRC action. The proposed Agreement also explicitly states that, prior to the requisite amendment of Wyoming Statute Section 35-11-2004(c), the NRC will reject any State of Wyoming request to terminate a license that proposes to bifurcate the ownership of byproduct material and its disposal site between the State and the Federal government. Pursuant to Commission direction, the Agreement contains a provision that requires the State of Wyoming to revise Statute Section 35-11-2004(c) during the next legislative session to be compatible with AEA Section 83b.(1)(A). If the Wyoming Statute Section 35-11-2004(c) is not amended by the end of the 2019 legislative session, the Agreement will terminate.
The NRC staff has examined the State of Wyoming's request for an Agreement with respect to the ability of the State's radiation control program to regulate Agreement materials. The examination was based on the Commission's Policy Statement, “Criteria for Guidance of States and NRC in Discontinuance of NRC Regulatory Authority and Assumption Thereof by States Through Agreement,” (46 FR 7540; January 23, 1981, as amended by Policy Statements published at 46 FR 36969; July 16, 1981, and at 48 FR 33376; July 21, 1983) (Policy Statement), and the Office of Nuclear Material Safety and Safeguards Procedure SA-700, “Processing an Agreement” (available at
(a) Organization and Personnel. These areas were reviewed under Criteria 1, 2, 20, 24, 33, and 34 in the draft staff assessment. The State of Wyoming's proposed Agreement materials program for the regulation of radioactive materials is the Uranium Recovery Program. The Uranium Recovery Program will be located within the existing Land Quality Division of the Wyoming Department of Environmental Quality.
The educational requirements for the Uranium Recovery Program staff members are specified in the State of Wyoming's personnel position descriptions and meet the NRC criteria with respect to formal education or combined education and experience requirements. All current staff members hold a Bachelor of Science Degree or Master's Degree in one of the following subject areas: Environmental science, health physics, nuclear engineering, geology, or ecology. All have training and work experience in radiation protection. Supervisory level staff have at least 5 years of working experience in radiation protection, with most having more than 10 years of experience.
The State of Wyoming performed an analysis of the expected workload under the proposed Agreement. Based on the NRC staff review of the State of Wyoming's analysis, the State has an adequate number of staff to regulate radioactive materials under the terms of the proposed Agreement. The State of Wyoming will employ the equivalent of 7.2 full-time professional and technical staff to support the Uranium Recovery Program.
The State of Wyoming has indicated that the Uranium Recovery Program has an adequate number of trained and qualified staff in place. The State of Wyoming has developed qualification procedures for license reviewers and inspectors that are similar to the NRC's procedures. The Uranium Recovery Program staff is accompanying the NRC staff on inspections of NRC licensees in Wyoming. The Uranium Recovery Program staff is also actively supplementing their experience through direct meetings, discussions, and facility visits with the NRC licensees in the State of Wyoming and through self-study, in-house training, and formal training.
Overall, the NRC staff concluded that the Uranium Recovery Program staff identified by the State of Wyoming to participate in the Agreement materials program has sufficient knowledge and experience in radiation protection, the use of radioactive materials, the standards for the evaluation of applications for licensing, and the techniques of inspecting licensed users of Agreement materials.
(b) Legislation and Regulations. These areas were reviewed under Criteria 1-14, 17, 19, 21, and 23-33 in the draft staff assessment. The Wyoming Statutes Sections 35-11-2001(a) through (c) provide the authority to enter into the Agreement and establish the Wyoming Department of Environmental Quality as the lead agency for the State's Uranium Recovery Program. The Department has the requisite authority to promulgate regulations under Wyoming Statute Section 35-11-2002(b) for protection against radiation. The Wyoming Statutes Sections 35-11-2001 through 2005 also provide the Uranium Recovery Program the authority to issue licenses and orders; conduct inspections; and enforce compliance with regulations, license conditions, and orders. The Wyoming Statute Section 35-11-2003(d) requires licensees to provide access to inspectors.
The Wyoming Statute Section 35-11-2001(e) does not provide the State of Wyoming with authority over independent or commercial laboratories. Under the proposed Agreement, the NRC would retain regulatory authority over laboratory facilities that are not located at facilities licensed under the State of Wyoming's regulatory authority. The State of Wyoming would only regulate laboratory facilities located at uranium or thorium mills. The NRC staff verified that the State of Wyoming adopted the relevant NRC regulations in parts 19, 20, 40, 71, and 150 of title 10 of the
(c) Storage and Disposal. These areas were reviewed under Criteria 8, 9a, 11, 29, 30, 31, and 32 in the draft staff assessment. The State of Wyoming has adopted NRC compatible requirements for the handling and storage of radioactive material. The State of Wyoming has adopted an adequate and compatible set of radiation protection regulations that apply to byproduct material as defined in Section 11e.(2) of the AEA and source material associated with milling activities.
As a result of the class of byproduct material it will be regulating (Section 11e.(2) of the AEA), the State of Wyoming is not required to have regulations compatible to 10 CFR part 61 for waste disposal. Rather, the State of Wyoming is required to have regulations that are compatible with 10 CFR part 40 for the disposal of byproduct material as defined in Section 11e.(2) of the AEA and source material associated with milling activities. The NRC staff confirmed that the State of Wyoming has adopted regulations that are compatible with the NRC regulations in 10 CFR part 40 for the disposal of byproduct material and source material associated with milling activities, which are equivalent to the applicable standards contained in 10 CFR part 61.
These regulations address the general requirements for waste disposal and are applicable to all licensees covered under this proposed Agreement.
The NRC staff identified one portion of the Wyoming Statute that is potentially not compatible with NRC requirements. Section 83b.(1)(A) of the AEA ensures that ownership of the byproduct material itself is inseparable from the site on which it is disposed. Consequently, the State of Wyoming has the option of taking title to the material and its disposal site, but the Uranium Mill Tailings Radiation Control Act (UMTRCA) does not permit a State to bifurcate ownership of the disposed byproduct material and the property rights necessary to ensure its safe disposal. The Wyoming Statute Section 35-11-2004(c), enacted in anticipation of the State of Wyoming's assumption of the NRC's regulatory authority for uranium and thorium milling, could permit the bifurcation of the disposed byproduct material and its disposal site by the State. As discussed in Criterion 30c. of the draft staff assessment, this bifurcation of the land and the disposed byproduct material could conflict with the AEA (as amended by UMTRCA), and Article II.B.2.b. in the proposed Agreement.
Based on Commission direction, the NRC staff concluded that Criterion 30c. is satisfied in the following manner: The Commission could complete the process for the final application package for the Agreement, including publishing the proposed Agreement for comment, by noting that the Commission's finding of compatibility is contingent on the State of Wyoming revising this provision, during the next legislative session, to be compatible with AEA Section 83b.(1)(A). Thus, an Agreement could be executed, but it would include a provision that the State of Wyoming has until the end of the 2019 legislative session to amend Wyoming Statute Section 35-11-2004(c) to be compatible with AEA Section 83b.(1)(A), or the Agreement will terminate without further NRC action. The Agreement would also explicitly state that the NRC will reject any State of Wyoming request to terminate a license that proposes to bifurcate the ownership of byproduct material and its disposal site between the State and the federal government. The NRC staff determined that there is little practical risk that the State of Wyoming's current statutory provisions would result in the bifurcation of the 11e.(2) byproduct material from the land since the NRC is required to review and approve any State-proposed termination of a uranium mill license.
(d) Transportation of Radioactive Material. This area was reviewed under Criteria 10 and 35 in the draft staff assessment. The State of Wyoming has adopted compatible regulations to the NRC regulations in 10 CFR part 71. Part 71 contains the requirements licensees must follow when preparing packages containing radioactive material for transport.
Part 71 also contains requirements related to the licensing of packaging for use in transporting radioactive materials.
(e) Recordkeeping and Incident Reporting. These areas were reviewed under Criteria 1, 11, and 35 in the draft staff assessment. The State of Wyoming has adopted compatible regulations to the sections of the NRC regulations that specify requirements for licensees to keep records and to report incidents or accidents involving the State's regulated Agreement materials.
(f) Evaluation of License Applications. This area was reviewed under Criteria 1, 7, 8, 9a, 13, 14, 20, 23, 25, and 29-35 in the draft staff assessment. The State of Wyoming has adopted compatible regulations to the NRC regulations that specify the requirements a person must meet to get a license to possess or use radioactive materials. The State of Wyoming has also developed a licensing procedure manual, along with accompanying regulatory guides, which are adapted from similar NRC documents and contain guidance for the program staff when evaluating license applications.
(g) Inspections and Enforcement. These areas were reviewed under Criteria 1, 16, 18, 19, 23, 35, and 36 in the draft staff assessment. The State of Wyoming has adopted a schedule providing for the inspection of licensees as frequently as, or more frequently than, the inspection schedule used by the NRC. The State of Wyoming's Uranium Recovery Program has adopted procedures for the conduct of inspections, reporting of inspection findings, and reporting inspection results to the licensees. Additionally, the State of Wyoming has also adopted procedures for the enforcement of regulatory requirements.
(h) Regulatory Administration. This area was reviewed under Criterion 23 in the draft staff assessment. The State of Wyoming is bound by requirements specified in its State law for rulemaking, issuing licenses, and taking enforcement actions. The State of Wyoming has also adopted administrative procedures to assure fair and impartial treatment of license applicants. The State of Wyoming law prescribes standards of ethical conduct for State employees.
(i) Cooperation with Other Agencies. This area was reviewed under Criteria 25, 26, and 27 in the draft staff assessment. The State of Wyoming law provides for the recognition of existing NRC and Agreement State licenses and the State has a process in place for the transition of active NRC licenses. Upon the effective date of the Agreement, all active uranium recovery NRC licenses issued to facilities in the State of Wyoming, with the exception of the ANC license, will be recognized as Wyoming Department of Environmental Quality licenses.
The State of Wyoming also provides for “timely renewal.” This provision affords the continuance of licenses for which an application for renewal has been filed more than 30 days prior to the date of expiration of the license. NRC licenses transferred while in timely renewal are included under the continuation provision.
The State of Wyoming regulations, in Chapter 4, Section 6(d), provide exemptions from the State's requirements for the NRC and the U.S. Department of Energy contractors or subcontractors; the exemptions must be authorized by law and determined not
There are six UMTRCA Title II sites in the State of Wyoming (ADAMS Accession No. ML16300A294) undergoing decommissioning. These sites are: (1) Anadarko Bear Creek, Powder River Basin; (2) Pathfinder, Lucky Mc, Gas Hills; (3) Umetco Minerals Corporation, Gas Hills; (4) Western Nuclear Inc., Split Rock, Jeffrey City; (5) Exxon Mobile, Highlands, Converse County; and (6) ANC, Gas Hills.
The State of Wyoming indicated it was opposed to assuming regulatory authority over the ANC site because the licensee is insolvent. To address the State of Wyoming's proposed exclusion of the ANC site from the proposed Agreement, the NRC staff provided SECY-17-0081 “Status and Resolution of Issues Associated with the Transfer of Six Decommissioning Uranium Mill Sites to the State of Wyoming” (ADAMS Accession No. ML17087A355) to the Commission. In SRM-SECY-17-0081 (ADAMS Accession No. ML17277A783), the Commission approved the NRC staff's recommendation for the NRC to retain regulatory authority over the ANC site and stated that the Commission's retention of the ANC site “is not a change to the Commission's current Agreement State policy, but is instead an exception to that policy based on case-specific facts.” Article II.A.14. of the proposed Agreement specifies that the Commission retains regulatory authority over the ANC license.
With regard to the five other decommissioning UMTRCA sites, the NRC staff has developed a draft Memorandum of Understanding (MOU) between the NRC and the State of Wyoming as a separate document from the proposed Agreement. The objective of the MOU is to delineate specific actions that the NRC and the State of Wyoming would take to verify completion of the decommissioning of these sites. The MOU has been drafted and the NRC staff is currently working with the State of Wyoming to delineate how license termination will be addressed for each of the five sites. An assessment of the decommissioning status of the five UMTRCA sites and the activities that need to be completed prior to license termination (ADAMS Accession No. ML17040A501) has been completed. Once the MOU is completed and signed by both the NRC and the State of Wyoming, it will be published in the
Section 274d. of the AEA provides that the Commission shall enter into an Agreement under Section 274b. with any State if:
(a) The Governor of the State certifies that the State has a program for the control of radiation hazards adequate to protect public health and safety with respect to the Agreement materials within the State and that the State desires to assume regulatory responsibility for the Agreement materials; and
(b) The Commission finds that the State program is in accordance with the requirements of Subsection 274o. and in all other respects compatible with the Commission's program for the regulation of materials, and that the State program is adequate to protect public health and safety with respect to the materials covered by the proposed Agreement.
The NRC staff has reviewed the proposed Agreement, the certification of Wyoming Governor Mead, and the supporting information provided by the Uranium Recovery Program of the Wyoming Department of Environmental Quality and Wyoming's Office of the Attorney General. Based upon this review, the NRC staff concludes that the State of Wyoming Uranium Recovery Program satisfies the Section 274d. criteria as well as the criteria in the Commission's Policy Statement “Criteria for Guidance of States and NRC in Discontinuance of NRC Regulatory Authority and Assumption Thereof by States Through Agreement.” As noted above, the proposed Agreement includes a provision that the State of Wyoming has until the end of the 2019 legislative session to amend Wyoming Statute Section 35-11-2004(c) to be compatible with AEA Section 83b.(1)(A) or the Agreement will terminate without further NRC action. The proposed Agreement also explicitly states that the NRC will reject any State of Wyoming request to terminate a license that proposes to bifurcate the ownership of byproduct material and its disposal site between the State and the Federal government. Pursuant to Commission direction, the NRC staff finding of compatibility is contingent on the State of Wyoming revising Wyoming Statute Section 35-11-2004(c) during the next legislative session to be compatible with AEA Section 83b.(1)(A). The proposed State of Wyoming program to regulate Agreement materials, as comprised of statutes, regulations, procedures, and staffing is compatible with the Commission's program and is adequate to protect public health and safety with respect to the materials covered by the proposed Agreement. Therefore, the proposed Agreement meets the requirements of Section 274 of the AEA.
For the Nuclear Regulatory Commission.
Whereas, The United States Nuclear Regulatory Commission (hereinafter referred to as “the Commission”) is authorized under Section 274 of the Atomic Energy Act of 1954, as amended, 42 U.S.C. Section 2011
Whereas, The Governor of the State of Wyoming is authorized under Wyoming Statute Section 35-11-2001 to enter into this Agreement with the Commission; and,
Whereas, The Governor of the State of Wyoming certified on November 14, 2017, that the State of Wyoming (hereinafter referred to as “the State”) has a program for the control of radiation hazards adequate to protect public health and safety with respect to the materials within the State covered by this Agreement and that the State desires to assume regulatory responsibility for such materials; and,
Whereas, The Commission found on [
Whereas, The State and the Commission recognize the desirability and importance of cooperation between the Commission and the State in the formulation of standards for protection against hazards of radiation and in assuring that State and Commission programs for protection against hazards of radiation will be coordinated and compatible; and,
Whereas, The Commission and the State recognize the desirability of the reciprocal recognition of licenses, and of the granting of limited exemptions from licensing of those materials subject to this Agreement; and,
Whereas, This Agreement is entered into pursuant to the Act;
Subject to the exceptions provided in Articles II, IV, and V, the Commission shall discontinue, as of the effective date of this Agreement, the regulatory authority of the Commission in the State under Chapters, 7, and 8, and Section 161 of the Act with respect to the following materials:
A. Byproduct material as defined in Section 11e.(2) of the Act; and,
B. Source material involved in the extraction or concentration of uranium or thorium in source material or ores at uranium or thorium milling facilities (hereinafter referred to as “source material associated with milling activities”).
A. This Agreement does not provide for the discontinuance of any authority, and the Commission shall retain authority and responsibility, with respect to:
1. Byproduct material as defined in Section 11e.(1) of the Act;
2. Byproduct material as defined in Section 11e.(3) of the Act;
3. Byproduct material as defined in Section 11e.(4) of the Act;
4. Source material except for source material as defined in Article I.B. of this Agreement;
5. Special nuclear material;
6. The regulation of the land disposal of byproduct, source, or special nuclear material received from other persons, excluding 11e.(2) byproduct material or source material described in Article I.A. and B. of this Agreement;
7. The evaluation of radiation safety information on sealed sources or devices containing byproduct, source, or special nuclear material and the registration of the sealed sources or devices for distribution, as provided for in regulations or orders of the Commission;
8. The regulation of the construction and operation of any production or utilization facility or any uranium enrichment facility;
9. The regulation of the export from or import into the United States of byproduct, source, or special nuclear material, or of any production or utilization facility;
10. The regulation of the disposal into the ocean or sea of byproduct, source, or special nuclear material waste as defined in the regulations or orders of the Commission;
11. The regulation of the disposal of such other byproduct, source, or special nuclear material as the Commission from time to time determines by regulation or order should, because of the hazards or potential hazards thereof, not to be so disposed without a license from the Commission;
12. The regulation of activities not exempt from Commission regulation as stated in 10 CFR part 150;
13. The regulation of laboratory facilities that are not located at facilities licensed under the authority relinquished under Article I.A. and B. of this Agreement; and,
14. Notwithstanding this Agreement, the Commission shall retain regulatory authority over the American Nuclear Corporation license.
B. Notwithstanding this Agreement, the Commission retains the following authorities pertaining to byproduct material as defined in Section 11e.(2) of the Act:
1. Prior to the termination of a State license for such byproduct material, or for any activity that results in the production of such material, the Commission shall have made a determination that all applicable standards and requirements pertaining to such material have been met.
2. The Commission reserves the authority to establish minimum standards governing reclamation, long-term surveillance or maintenance, and ownership of such byproduct material and of land used as its disposal site for such material. Such reserved authority includes:
a. The authority to establish terms and conditions as the Commission determines necessary to assure that, prior to termination of any license for such byproduct material, or for any activity that results in the production of such material, the licensee shall comply with decontamination, decommissioning, and reclamation standards prescribed by the Commission and with ownership requirements for such material and its disposal site;
b. The authority to require that prior to termination of any license for such byproduct material or for any activity that results in the production of such material, title to such byproduct material and its disposal site be transferred to the United States or the State at the option of the State (provided such option is exercised prior to termination of the license);
c. The authority to permit use of the surface or subsurface estates, or both, of the land transferred to the United States or a State pursuant to paragraph 2.b. in this section in a manner consistent with the provisions of the Uranium Mill Tailings Radiation Control Act of 1978, provided that the Commission determines that such use would not endanger public health, safety, welfare, or the environment;
d. The authority to require, in the case of a license for any activity that produces such byproduct material (which license was in effect on November 8, 1981), transfer of land and material pursuant to paragraph 2.b. in this section taking into consideration the status of such material and land and interests therein and the ability of the licensee to transfer title and custody thereof to the United States or a State;
e. The authority to require the Secretary of the United States Department of Energy, other Federal agency, or State, whichever has custody of such byproduct material and its disposal site, to undertake such monitoring, maintenance, and emergency measures as are necessary to protect public health and safety and other actions as the Commission deems necessary; and,
f. The authority to enter into arrangements as may be appropriate to assure Federal long-term surveillance or maintenance of such byproduct material and its disposal site on land held in trust by the United States for any Indian Tribe or land owned by an Indian Tribe and subject to a restriction against alienation imposed by the United States.
3. The Commission retains the authority to reject any State request to terminate a license that proposes to bifurcate the ownership of 11e.(2) byproduct material and its disposal site between the State and the Federal government. Upon passage of a revised Wyoming Statute Section 35-11-2004(c) that the NRC finds compatible with Section 83b.(1)(A) of the Act, this paragraph expires and is no longer part of this Agreement.
With the exception of those activities identified in Article II, A.8 through A.11, this Agreement may be amended, upon application by the State and approval by the Commission to include one or more of the additional activities specified in Article II, A.1 through A.7, whereby the State may then exert regulatory authority and responsibility with respect to those activities.
Notwithstanding this Agreement, the Commission may from time to time by rule, regulation, or order, require that the manufacturer, processor, or producer of any equipment, device, commodity, or other product containing source, byproduct, or special nuclear material shall not transfer possession or control of such product except pursuant to a license or an exemption for licensing issued by the Commission.
This Agreement shall not affect the authority of the Commission under Subsection 161b. or 161i. of the Act to issue rules, regulations, or orders to protect the common defense and security, to protect restricted data, or to guard against the loss or diversion of special nuclear material.
The Commission will cooperate with the State and other Agreement States in the formulation of standards and regulatory programs of the State and the Commission for protection against hazards of radiation and to assure that Commission and State programs for protection against hazards of radiation will be coordinated and compatible. The State agrees to cooperate with the Commission and other Agreement States in the formulation of standards and regulatory programs of the State and the Commission for protection against hazards of radiation and to assure that the State's program will continue to be compatible with the program of the
The State and the Commission agree to keep each other informed of proposed changes in their respective rules and regulations and to provide each other the opportunity for early and substantive contribution to the proposed changes.
The State and the Commission agree to keep each other informed of events, accidents, and licensee performance that may have generic implication or otherwise be of regulatory interest.
The Commission and the State agree that it is desirable to provide reciprocal recognition of licenses for the materials listed in Article I licensed by the other party or by any other Agreement State.
Accordingly, the Commission and the State agree to develop appropriate rules, regulations, and procedures by which reciprocity will be accorded.
A. The Commission, upon its own initiative after reasonable notice and opportunity for hearing to the State or upon request of the Governor of the State, may terminate or suspend all or part of this agreement and reassert the licensing and regulatory authority vested in it under the Act if the Commission finds that (1) such termination or suspension is required to protect public health and safety, or (2) the State has not complied with one or more of the requirements of Section 274 of the Act.
1. This Agreement will terminate without further NRC action if the State does not amend Wyoming Statute Section 35-11-2004(c) to be compatible with Section 83b.(1)(A) of the Act by the end of the 2019 Wyoming legislative session. Upon passage of a revised Wyoming Statute Section 35-11-2004(c) that the NRC finds compatible with Section 83b.(1)(A) of the Act, this paragraph expires and is no longer part of the Agreement.
B. The Commission may also, pursuant to Section 274j. of the Act, temporarily suspend all or part of this agreement if, in the judgment of the Commission, an emergency situation exists requiring immediate action to protect public health and safety and the State has failed to take necessary steps. The Commission shall periodically review actions taken by the State under this Agreement to ensure compliance with Section 274 of the Act, which requires a State program to be adequate to protect public health and safety with respect to the materials covered by this Agreement and to be compatible with the Commission's program.
In the licensing and regulation of byproduct material as defined in Section 11e.(2) of the Act, or of any activity that results in production of such material, the State shall comply with the provisions of Section 274o. of the Act, if in such licensing and regulation, the State requires financial surety arrangements for reclamation or long-term surveillance and maintenance of such material.
A. The total amount of funds the State collects for such purposes shall be transferred to the United States if custody of such material and its disposal site is transferred to the United States upon termination of the State license for such material or any activity that results in the production of such material. Such funds include, but are not limited to, sums collected for long-term surveillance or maintenance. Such funds do not, however, include monies held as surety where no default has occurred and the reclamation or other bonded activity has been performed; and,
B. Such surety or other financial requirements must be sufficient to ensure compliance with those standards established by the Commission pertaining to bonds, sureties, and financial arrangements to ensure adequate reclamation and long-term management of such byproduct material and its disposal site.
This Agreement shall become effective on [date], and shall remain in effect unless and until such time as it is terminated pursuant to Article VIII.
Done at [location] this [date] day of [month], 2018.
For the Nuclear Regulatory Commission.
Done at [location] this [date] day of [month], 2018.
For the State of Wyoming.
2:00 p.m. on Thursday, July 12, 2018.
Closed Commission Hearing Room 10800.
This meeting will be closed to the public.
Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present.
The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) and (10) and 17 CFR 200.402(a)(3), (a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matters at the closed meeting.
Commissioner Piwowar, as duty officer, voted to consider the items listed for the closed meeting in closed session.
The subject matters of the closed meeting will be:
Institution and settlement of injunctive actions;
Institution and settlement of administrative proceedings;
Resolution of litigation claims; and
Other matters relating to enforcement proceedings.
At times, changes in Commission priorities require alterations in the scheduling of meeting items.
For further information and to ascertain what, if any, matters have been added, deleted or postponed; please contact Brent J. Fields from the Office of the Secretary at (202) 551-5400.
The Social Security Administration (SSA) publishes a list of information collection packages requiring clearance by the Office of Management and Budget (OMB) in compliance with Public Law 104-13, the Paperwork Reduction Act of 1995, effective October 1, 1995. This notice includes revisions of OMB-approved information collections.
SSA is soliciting comments on the accuracy of the agency's burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology. Mail, email, or fax your comments and recommendations on the information collection(s) to the OMB Desk Officer and SSA Reports Clearance Officer at the following addresses or fax numbers.
Office of Management and Budget, Attn: Desk Officer for SSA, Fax: 202-395-6974, Email address:
Social Security Administration, OLCA, Attn: Reports Clearance Director, 3100 West High Rise, 6401 Security Blvd., Baltimore, MD 21235, Fax: 410-
Or you may submit your comments online through
I. The information collections below are pending at SSA. SSA will submit them to OMB within 60 days from the date of this notice. To be sure we consider your comments, we must receive them no later than September 10, 2018. Individuals can obtain copies of the collection instruments by writing to the above email address.
II. SSA submitted the information collections below to OMB for clearance. Your comments regarding these information collections would be most useful if OMB and SSA receive them 30 days from the date of this publication. To be sure we consider your comments, we must receive them no later than August 9, 2018. Individuals can obtain copies of the OMB clearance packages by writing to
Representative payees who receive Special Veterans Benefits (SVB) on behalf of beneficiaries residing outside the United States must complete the SSA-2001-F6 annually. We also require these representative payees to complete the form any time we have reason to believe they could be misusing the benefit payments. The respondents are individuals or organizations serving as representative payees who receive SVB on behalf of beneficiaries living outside the United States.
Tennessee Valley Authority (TVA).
Notice of meeting.
The TVA Regional Resource Stewardship Council (RRSC) will hold a meeting on Monday and Tuesday, July 30-31, 2018, to consider various matters. The RRSC was established to advise TVA on its natural resources and stewardship activities and the priority to be placed among competing objectives and values. Notice of this meeting is given under the Federal Advisory Committee Act (FACA).
The meeting will be held on Monday-Tuesday, July 30-31, 2018, from 8:30 a.m. to 12 p.m., EDT.
The meeting will be held at The Westin Chattanooga, 801 Pine Street, Chattanooga, Tennessee 37402. An individual requiring special accommodation for a disability, should let the contact below know at least a week in advance.
Barbie Perdue, 865-632-6113,
The meeting agenda includes the following items:
The meeting is open to the public. Verbal comments from the public will be accepted Tuesday, July 31 starting at 9:30 a.m., EDT, for no more than one hour. Registration to speak is from 8:00 a.m. to 9:00 a.m., EDT, at the door. Handout materials should be limited to one printed page. Written comments may be sent by mailing to the Regional Resource Stewardship Council, Tennessee Valley Authority, 400 West Summit Hill Drive, WT-9-D, Knoxville, Tennessee 37902.
Department of the Treasury, Office of the Comptroller of the Currency (OCC).
Notice.
The OCC has determined that the renewal of the charter of the OCC Minority Depository Institutions Advisory Committee (MDIAC) is necessary and in the public interest. The OCC hereby gives notice of the renewal of the charter.
The charter of the OCC MDIAC has been renewed for a two-year period that began on June 25, 2018.
Beverly F. Cole, Deputy Comptroller for Compliance Supervision and Designated Federal Officer, (202) 649-7260, Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219.
Notice of the renewal of the MDIAC charter is hereby given, with the approval of the Secretary of the Treasury, pursuant to section 9(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. The Comptroller of the Currency has determined that the renewal of the MDIAC charter is necessary and in the public interest to provide advice and information about the current circumstances and future development of minority depository institutions, in accordance with the goals established by section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Public Law 101-73, Title III, 103 Stat. 353, 12 U.S.C. 1463 note, which are to preserve the present number of minority depository institutions, preserve the minority character of minority depository institutions in cases involving mergers or acquisitions, provide technical assistance, and encourage the creation of new minority depository institutions.
Securities and Exchange Commission.
Final rules.
We are adopting amendments to the definition of “smaller reporting company” as used in our rules and regulations. The amendments expand the number of registrants that qualify as smaller reporting companies and are intended to reduce compliance costs for these registrants and promote capital formation, while maintaining appropriate investor protections. We are amending the definition of “smaller reporting company” to include registrants with a public float of less than $250 million, as well as registrants with annual revenues of less than $100 million for the previous year and either no public float or a public float of less than $700 million. We also are amending other rules and forms in light of the new definition of “smaller reporting company,” including amendments to the definitions of “accelerated filer” and “large accelerated filer” to preserve the existing thresholds in those definitions. Qualifying as a “smaller reporting company” will no longer automatically make a registrant a non-accelerated filer. The Chairman, however, has directed the staff to formulate recommendations to the Commission for possible additional changes to the “accelerated filer” definition that, if adopted, would have the effect of reducing the number of registrants that qualify as accelerated filers.
The final rules are effective September 10, 2018.
Amy Reischauer or Jennifer Riegel, Office of Small Business Policy, Division of Corporation Finance, at (202) 551-3460, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-3628.
We are adopting amendments to 17 CFR 230.405 (“Rule 405”) and Forms S-1,
On June 27, 2016, the Commission proposed amendments that would increase the financial thresholds in the “smaller reporting company” (“SRC”) definition and would have the effect of expanding the number of companies that benefit from the scaled disclosure accommodations available to SRCs.
We are adopting the amendments generally as proposed with two changes. As proposed, we are amending the SRC definition to include registrants with a public float of less than $250 million, as well as registrants with annual revenues of less than $100 million for the previous year and no public float. In a change from the proposal, the SRC definition in the final rules also includes registrants with annual revenues of less than $100 million for the previous year and a public float of less than $700 million. Specifically, we are amending Securities Act Rule 405, Exchange Act Rule 12b-2, and Item 10(f) of Regulation S-K to effect these changes. In another change from the proposal, we are amending Rule 3-05(b)(2)(iv) of Regulation S-X to increase the revenue threshold under which certain acquirers may omit the earliest of the three fiscal years of audited financial statements of certain targets. Finally, we are adopting amendments to the “accelerated filer” and “large accelerated filer” definitions in Exchange Act Rule 12b-2, as proposed, to preserve the application of the current public float thresholds in those definitions.
Consistent with the proposal, we are not amending any of the scaled disclosure accommodations available to SRCs in Regulation S-K and Regulation S-X.
We are adopting amendments to the SRC definition to expand the number of registrants that qualify as SRCs and thereby benefit from scaled disclosure requirements. These amendments will enable a registrant to qualify as a SRC based on a public float test or a revenue test.
Under the final rules, SRCs generally
• A public float of less than $250 million;
A reporting registrant calculates its public float as of the last business day of its most recently completed second fiscal quarter.
• annual revenues of less than $100 million
As proposed, the final rules increase the threshold for determining SRC status based on public float from $75 million to $250 million. A registrant that qualifies as a SRC under the public float test would qualify regardless of its revenues.
Consistent with the current definition, and as proposed, under the final rules, a registrant that determines that it does not qualify as a SRC under the initial qualification thresholds will remain unqualified unless and until it determines that it meets one or more lower qualification thresholds. The subsequent qualification thresholds, set forth in the table below, are set at 80% of the initial qualification thresholds.
As proposed, a registrant with a public float of less than $250 million would qualify as a SRC.
Most commenters addressed the overall costs and benefits of expanding the pool of registrants eligible for SRC status. Many of these commenters expressed general support for the proposed amendments to the SRC definition.
On the other hand, three commenters generally opposed the proposed amendments to the SRC definition or generally opposed accommodations based on company size.
Two commenters stated that the proposed amendments would potentially provide only marginal cost savings.
Many commenters expressed support for the proposed increases in both the public float and revenue thresholds.
Two commenters recommended that the Commission review the SRC definition periodically to determine whether the thresholds being used remain appropriate.
After considering the comments received, as well as the recommendations made by the ACSEC
We are not revising the method of calculating public float, as suggested by one commenter.
We believe that these amendments will promote capital formation through a modest reduction in compliance costs for newly eligible SRCs while maintaining appropriate investor protections.
We believe the existing scaled disclosure accommodations have reduced compliance costs for SRCs.
As proposed, a registrant with no public float would qualify as a SRC if it had annual revenues of less than $100 million during its most recently completed fiscal year.
The Proposing Release noted that the 2015 Small Business Forum recommended that the SRC definition be revised to include, in addition to registrants with a public float of less than $250 million, registrants with a public float of less than $700 million and annual revenues of less than $100 million.
Many commenters recommended that the Commission add a revenue test to the SRC definition for companies with a public float.
After considering the comments received as well as the recommendations made by the ACSEC
The amended revenue test that we are adopting is consistent with the position expressed by several commenters
In 2016, approximately 7.7% of registrants qualified as SRCs by having no public float and less than $50 million in annual revenues.
Under the current definition, and as proposed, once a registrant with no public float determines that it does not qualify as a SRC,
Consistent with the 80% ratio we are adopting for the other subsequent qualification thresholds, under the amended revenue test, once a registrant with public float determines that it does not qualify as a SRC because it exceeds either or both of the $100 million annual revenue and $700 million public float thresholds, it will remain unqualified unless and until it meets a lower threshold for the criteria on which it previously failed to qualify ($80 million of annual revenue and $560 million of public float) and continues to meet any threshold it previously satisfied ($100 million of annual revenue or $700 million of public float).
In the Proposing Release, the Commission asked whether, if the revenue threshold in the SRC definition is increased, the threshold in Rule 3-05 of Regulation S-X also should increase. Rule 3-05 of Regulation S-X provides the requirements for financial statements of businesses acquired or to be acquired in certain registration statements and current reports. Current paragraph (b)(2)(iv) allows certain registrants to omit such financial statements for the earliest of the three fiscal years required if the net revenues of the business to be acquired are less than $50 million.
“The threshold at which audited financial statements of an acquired business are required for three years, as required for the issuer itself (except for small business issuers), has been raised from 40% to 50% in recognition of the significant burden imposed by the lower threshold. In addition, consistent with the criteria for small business issuers, financial statements for periods preceding the most recent two fiscal years would not be required for acquired businesses reporting revenues below $25 million.”
When the Commission adopted the SRC definition (which replaced the small business issuer definition) in 2007, it noted:
“Several comment letters noted that in light of the $50 million in revenues threshold proposed for determining a company's qualification as a SRC if a company is unable to calculate public float, the Commission should consider revising [Rule 3-05(b)(2)(iv)] to raise to $50 million the $25 million threshold currently used to limit to two the periods required for audited financial statements of an acquired business. The $25 million threshold was based on the $25 million in revenues standard in Regulation S-B that we are rescinding. We are amending this standard to increase the threshold to $50 million in revenues, as suggested by the commenters.”
Two commenters recommended amending Rule 3-05 to increase the revenue threshold in paragraph (b)(2)(iv) to $100 million to maintain the alignment between Rule 3-05 and the definition of a SRC.
Consistent with these comments, we are amending Rule 3-05 to increase the net revenue threshold in Rule 3-05(b)(2)(iv) of Regulation S-X to $100 million.
The Commission proposed amending the definitions of “accelerated filer” and “large accelerated filer” to remove the automatic exclusion from these definitions of any registrant that qualifies as an SRC
Increasing the SRC public float threshold to $250 million without eliminating the SRC provision from the accelerated filer definition would exclude from the definition of accelerated filer those registrants that are newly eligible to use the SRC disclosure requirements, keeping the thresholds for both definitions linked as they have been historically.
The Commission proposed to eliminate the provision in the accelerated filer definition that excludes SRCs to maintain the current thresholds at which registrants are subject to the accelerated filer disclosure and filing requirements. As a result, as illustrated in Figure 2, some registrants would qualify as both SRCs and accelerated filers.
As discussed in the Proposing Release, the public float threshold for entering large accelerated filer status currently is $700 million, so newly eligible SRCs under the proposed increased public float threshold of $250 million would not include any registrants that currently qualify as large accelerated filers. Nevertheless, the Commission proposed to eliminate this provision because it currently does not capture any registrants, would not have captured any registrants under the proposed amendments, and could lead to confusion if retained.
Some commenters responded to the Commission's solicitation of comment on this issue by supporting the elimination of the provisions in the accelerated filer and large accelerated filer definitions that specifically exclude registrants that are eligible to use the SRC disclosure requirements for their annual or quarterly reports.
In contrast, many commenters responded to the Commission's solicitation of comment on this issue by recommending that the Commission increase the thresholds in the accelerated filer definition, consistent with the changes to the SRC definition.
Several commenters addressed the costs associated with complying with the requirements of Section 404(b).
A few commenters stated that the market does not value the audit of such internal control
A number of commenters recommended that the Commission allow a revenue test for the accelerated filer definition, similar to the amended revenue test being adopted by the Commission in the SRC definition.
As proposed, we are adopting amendments to the “accelerated filer” and “large accelerated filer” definitions in Exchange Act Rule 12b-2 to preserve the application of the current thresholds contained in those definitions.
Although we are not raising the accelerated filer public float threshold or modifying the Section 404(b) requirements for registrants with a public float between $75 million and $250 million in this release, as stated above, the Chairman has directed the staff to formulate recommendations to the Commission for possible changes to reduce the number of registrants that our rules define as accelerated filers. Eliminating the SRC provision in the accelerated filer and large accelerated filer definitions will maintain the current thresholds at which registrants are subject to the accelerated filer and large accelerated filer disclosure and filing requirements. In 2007, the Commission noted that aligning the SRC public float threshold based on the levels established for non-accelerated filers
If any of the provisions of these amendments, or the application thereof to any person or circumstance, is held to be invalid, such invalidity shall not affect other provisions or application of such provisions to other persons or circumstances that can be given effect without the invalid provision or application.
As discussed above, we are adopting amendments to the definition of SRC as used in our rules and regulations. The amendments expand the number of registrants that are eligible to provide scaled disclosure to their investors and are intended to reduce compliance costs for these registrants and promote capital formation, while maintaining appropriate investor protections. Registrants with a public float of less than $250 million (an increase from the current $75 million threshold) will qualify as SRCs, as will registrants with no public float if their revenues are less than $100 million (an increase from the current $50 million threshold).
We also are making corresponding amendments to other rules in light of the new SRC definition. As proposed, we are adopting amendments to the “accelerated filer” and “large accelerated filer” definitions in Exchange Act Rule 12b-2 to preserve the application of the public float thresholds in those definitions. In addition, we are amending Rule 3-05(b)(2)(iv) of Regulation S-X to increase the revenue threshold under which certain registrants may omit the earliest of the three fiscal years of
We are mindful of the costs and benefits of the amendments. In this economic analysis, we examine the existing baseline, which consists of the current regulatory framework and market practices, and discuss the potential costs and benefits of the amendments, relative to this baseline, and their potential effects on efficiency, competition, and capital formation.
In calendar year 2016, 7,395 registrants filed a Form 10-K with the Commission. Excluding investment companies, business development companies, and ABS issuers, which are not eligible for SRC status, 6,739 registrants filed a Form 10-K in calendar year 2016. Of these registrants, 2,592 (35.1% of all registrants) claimed SRC status by checking the box on the cover page of their Forms 10-K indicating that the registrant was a SRC. Under the current definition, a registrant with a public float may qualify as a SRC if its public float is less than $75 million or a registrant with no public float may qualify as a SRC if its annual revenues are less than $50 million. An additional 232 filers in calendar year 2016 reported public float of less than $75 million or no public float and revenues of less than $50 million, but did not check the box on the cover page of their Forms 10-K indicating that they were SRCs.
Table 1 summarizes the number and percentage of registrants that claimed SRC status in each calendar year over the 2013-2016 period.
Table 2 shows that, while registrants claiming SRC status with available data account for a substantial percentage of the total number of registrants in calendar year 2016, they account for less than one percent of the entire public float, market value and revenue of all registrants.
Table 3 shows the distribution of registrants that were eligible for SRC status based on available data in calendar year 2016 using the Fama-French 49-industry classification.
As discussed above, we are amending Rule 3-05(b)(2)(iv) of Regulation S-X to increase the revenue threshold under which certain registrants may omit the earliest of the three fiscal years of audited financial statements of an acquired business or business to be acquired. Rule 3-05 applies to registrants that are not SRCs.
The primary benefit stemming from the amendments is a reduction in compliance costs for the registrants that will newly qualify for SRC status. To the extent that the reduced compliance costs have a fixed cost component,
As a secondary effect of the amendments, a lower disclosure burden could spur growth in the registrants that will newly qualify for SRC status to the extent that the compliance cost savings and other resources (
With respect to costs, we expect that the amendments to the SRC definition will result in a modest change in some indicators of the overall quality of the information environment. Generally, a decrease in the amount of direct disclosure could increase the information asymmetry between investors and company insiders, leading to lower liquidity and higher costs of capital for the affected registrants. For example, one study found that, during the three-month period following the establishment of the SRC definition, registrants with public floats of $25 million or more and less than $75 million that claimed SRC status experienced a significant reduction in liquidity relative to comparable registrants.
The number of affected registrants that will make scaled disclosures will ultimately depend on the choices of those registrants. That is, the SRC definition establishes eligibility for, but does not mandate reliance on, any of the scaled disclosure accommodations.
Under the amendments, we expect registrants will weigh their own costs and benefits of scaled disclosure and decide whether to take advantage of any of the scaled disclosure accommodations for which they are newly eligible. Some registrants may determine that the costs of potentially reduced liquidity for their securities and higher cost of capital exceed the benefits of the lower compliance costs. Those registrants may elect not to rely on the scaled disclosure accommodations available to them. On the other hand, expanding SRC eligibility could provide opportunities for adverse selection in a greater number of registrants. For example, registrants whose outside investors would have benefited from more disclosure might choose the less burdensome disclosure requirement once becoming eligible. The net benefit or cost for each newly eligible registrant and its investors will ultimately depend on the specific facts and circumstances.
Expanding the pool of registrants eligible for SRC status to include registrants with revenues of less than $100 million and a public float of $250 million or more and less than $700 million will increase the cost savings, information asymmetries, and other effects of scaled disclosure in proportion to the increase in the number of registrants that become newly eligible at those higher thresholds and choose to avail themselves of the scaled disclosure accommodation. This number is likely to be small, as indicated by the evidence that 161 (2.2%) of the registrants that filed a Form 10-K in 2016 would have met the thresholds in the amended revenue test for registrants with public float.
The effects of scaled disclosure for registrants with a public float of $250 million or more and less than $700 million and revenues of less than $100 million may be different from the effects of scaled disclosure for registrants with public float nearer to the current threshold of $75 million. This is because the characteristics of registrants eligible for SRC status under the final rules may be different from those of registrants close to the current threshold. For example, differences in the relationships between management and outside investors in registrants with higher public float could affect the level of information asymmetries between those registrants and investors. This may cause those registrants to make different decisions about how much information they choose to disclose and whether to rely on the scaled disclosure accommodations, leading to differences in the observed use of scaled disclosure by different registrants of the same size. The 161 additional registrants had an average public float of $396 million, while those that qualify under the current definition had an average public float of $15 million, and those that would have qualified under the proposed rules had an average public
Similarly, increasing the revenue threshold below which registrants are eligible to provide two rather than three years of certain acquired businesses' historical financial statements under Rule 3-05(b)(2)(iv) from $50 million to $100 million will increase the cost savings, information asymmetries, and other effects of the reduced historical financial statement disclosure that investors receive at or around the time of the acquisition in proportion to the increase in the number of registrants that acquire businesses with revenues below the higher threshold and choose to avail themselves of this disclosure accommodation.
Overall, we expect the effect of raising the revenue threshold in Rule 3-05(b)(2)(iv) of Regulation S-X from $50 million to $100 million on information disclosed by registrants and its consequences for registrants and investors to be modest. This reflects our appraisal that few registrants are eligible to provide two rather than three years of an acquired business's historical financial statements under Rule 3-05(b)(2)(iv), because the acquired business not only would need to meet one of the significant subsidiary thresholds at the 50% level compared to the non-SRC acquirer, but the acquired business also would need to have less than the $50 million of revenues in its most recent fiscal year.
By increasing the public float threshold from $75 million to $250 million, increasing the annual revenue threshold for registrants with no public float from $50 million to $100 million, and expanding the revenue test to include registrants with a public float of less than $700 million and revenues of less than $100 million in the SRC definition, the amendments will permit more registrants to qualify as SRCs. To estimate the number of additional registrants that are likely to be affected by the amendments, we use public float data and revenue data from Form 10-K filings.
We estimate that 966 additional registrants will be eligible for SRC status in the first year under the new definition. These registrants estimated to be eligible in the first year comprise 779 registrants with a public float of $75 million or more and less than $250 million, 26 registrants with no public float and revenues of $50 million or more and less than $100 million, and 161 registrants with a public float of $250 million or more and less than $700 million and revenues of less than $100 million.
The 966 registrants that we estimate will be newly eligible for SRC status are characterized by an average public float of $191 million (median $162 million), an average market value of $279 million (median $201 million), and average revenues of $196 million (median $68 million). Of these registrants, 365 currently are EGCs and are eligible for certain scaled disclosure under Title I of the JOBS Act, including the scaled executive compensation disclosures available to SRCs under Item 402 of Regulation S-K. The newly eligible registrants with available data in 2016 were concentrated in the following industries: “Pharmaceutical Products” (17.3%), “Banking” (15.2%), “Financial Trading” (11.8%), “Business Services” (5.2%), and “Electronic Equipment” (3.7%). If the distribution of eligible registrants does not change over time, and if all of them claim SRC status, the amendments will lead to a noticeable increase in the presence of “Pharmaceutical Products” and “Banking” registrants in the pool of SRCs.
Registrants eligible for SRC status with available data using the public float threshold of less than $250 million represent approximately 38.6% of all registrants, while only 28.0% of all registrants qualify under the existing public float threshold of less than $75 million. The 38.6% of all registrants that will qualify under the public float threshold would be more in line with the 42% of registrants that qualified under the public float threshold when the Commission first established the definition of SRC.
Increasing the percentage of registrants that will qualify under the public float threshold to align more closely with the 2007 level is consistent with the rise in market capitalization of public companies that has occurred
As discussed above, we are amending Rule 3-05(b)(2)(iv) of Regulation S-X to increase the revenue threshold under which certain registrants may omit the earliest of the three fiscal years of audited financial statements of an acquired business or business to be acquired. Similar to the baseline discussion of Rule 3-05, given the difficulty in accurately identifying registrants that have acquisitions (1) that meet any of the significant subsidiary tests at the 50% level and (2) where the acquired business has revenues of less than $100 million, we are unable to estimate the number of registrants that will be affected by raising the revenue threshold in Rule 3-05(b)(2)(iv) from $50 million to $100 million. The amendments we are adopting today increase the number of registrants that qualify as SRCs (which will likely decrease the application of Rule 3-05) but also increase the revenue threshold in Rule 3-05(b)(2)(iv) (which may offset the decreased number of companies affected by Rule 3-05). Therefore, we do not expect that the amendments will significantly alter the number of registrants that will be eligible to omit the earliest of three years of financial statements of an acquired business pursuant to Rule 3-05(b)(2)(iv).
In this section, we estimate the incremental costs and benefits associated with SRC-related scaled disclosures, using a multivariate empirical analysis. We cannot isolate the costs and benefits associated with scaled disclosures using available data from SRCs, because we cannot with the data isolate the effects of scaled disclosures from the effects of some other accommodations, such as the exemption from Section 404(b) that is currently available to all SRCs through their status as non-accelerated filers.
It is possible, however, to isolate the effects of scaled disclosures on registrants with public float slightly below or above the current $75 million public float threshold using 2006-2009 data. This is because, as a result of the rules that established the SRC definition in 2007, registrants with public float of $25 million or more and less than $75 million experienced no change in the Section 404(b) exemption (that is, they remained exempt from the requirement), but became eligible for the SRC scaled disclosures. Our empirical method is a difference-in-difference estimation between a treatment group and a control group that is the basis for comparison.
To analyze the economic effects of eligibility for scaled disclosures resulting from the Commission's 2007 rules by this method, we compare the Treatment Group with Control Group 1 and Control Group 2 in the following areas: Cost savings, information environment, liquidity, and growth. We then use the analysis to extrapolate the likely effects of the expansion of eligibility for SRC status under the final rules. In extrapolating the likely effects, we place particular emphasis on the comparison between the Treatment Group and Control Group 1, which represents a closer group in size to the newly eligible SRCs under the final rules.
We believe that the evidence from analysis of changes in the information environments of registrants around the 2007 amendments is a suitable basis for evaluating the effects of the current amendments on registrants with public floats at the low end of the range that are newly eligible for scaled disclosure. We included a similar analysis in the Proposing Release and solicited comments on this analysis, including ways to better quantify the effects of scaled disclosure on SRCs, but did not receive any comments in response.
While the 2007 amendments resulted in changes that are similar to what we expect will occur under the current amendments, our analysis is subject to a number of assumptions and limitations. The evidence from the 2007 amendments may be less suitable as a basis for evaluating the effects of the current amendments on registrants with relatively higher levels of public float than for evaluating potential effects of the current amendments on registrants with public float around the $75 million threshold.
The cost savings from scaled disclosures could include savings of resources that are likely to be used for the relevant parts of disclosures, for example, managerial and employee time, other internal resources, and audit fees related to certain disclosures. Among these potential savings, changes in audit fees are readily quantifiable. To the extent that the scaled disclosure accommodations affect information that must be audited, scaled disclosures of the audited portions of the filings should lead to a reduction in audit expenses. Because many of the scaled disclosures available to SRCs relate to governance and executive compensation disclosures that are not subject to audit, a reduction in audit fees is likely a small part of the total cost savings associated with scaled disclosures. However, quantifying the change in audit fees can potentially help us estimate the entire cost savings.
To estimate the cost savings from the amendments, we first examine changes in the audit fees of registrants that were newly eligible to use scaled disclosures as a result of the 2007 amendments relative to those in the control, or comparison, groups between the pre-amendment 2006-2007 period and the post-amendment 2008-2009 period. Audit fee data come from the Ives Group Audit Analytics database. We include only registrants that had both pre-amendment and post-amendment audit fee data in the analysis. Table 5 reflects the general results.
For SRCs with public floats of $25 million or more and less than $75 million, in 2008-2009, average audit fees declined by $43,853. In contrast, both Control Group 1, which just missed eligibility for SRC status, and Control Group 2, which already was eligible for scaled disclosures, experienced smaller declines in average audit fees after the adoption of the 2007 amendments: $21,731 and $11,903, respectively. Thus, the difference-in-difference estimate of the savings in audit fees associated with scaled disclosures is between $22,122 and $31,950 per SRC with public float around the $75 million threshold. Although two different control groups are used to control for other factors that may have caused the changes in audit fees noted in Table 5 during the 2006-2009 period,
We also estimate the savings in audit fees in terms of a percentage reduction, instead of a dollar value.
For the 966 newly eligible registrants that we estimate would be potentially affected by the amendments, the average audit fees were $658,735 in fiscal year 2016. Thus, if we use the dollar value estimates of the audit fee savings, the estimated reduction in audit fees would be between $28,490 and $41,147 for this group, which are the inflation-adjusted values of the audit fee savings estimates in 2008 and 2009.
We recognize that this analysis of the audit fee data is subject to a number of assumptions, some of which may not be fully applicable when estimating the potential change in audit expenses as a result of the amendments.
Given this assumption, we estimate total annual cost savings per newly eligible registrant with a public float around the $75 million threshold to be between $98,439 ($24,610 × 4) and $298,052 ($74,513 × 4). The savings to registrants that become newly eligible with public floats closer to the $250 million and $700 million thresholds, will vary from this estimate by amounts that are difficult to quantify, because these registrants are less comparable to the Control Groups, and will depend on the facts and circumstances of the newly eligible registrant. For example, the audit cost for some of these registrants may be higher as a result of greater complexity in their business operations, increasing the cost savings associated with SRC status.
A registrant's information environment can be measured by the amount of useful information available to investors and the quality of that information. To gauge the potential effects on the degree of external information production about the registrant that could benefit investors, we determine a registrant's percentage of institutional ownership, total 5% block institutional ownership, and analyst coverage (
To measure disclosure quality, we use four discretionary accrual measures commonly used in the accounting literature as proxies for earnings management and the incidence of material restatements (based on the first year of financial statements restated and the filing year). Scaled disclosure may contribute to lowering the overall quality of the information environment, which is proxied in this analysis by the propensity for earnings management and the incidence of material restatements.
To examine the potential effects on liquidity, we focus on the share turnover ratio, which is calculated by dividing the total number of shares traded over a period by the number of shares outstanding. To assess the effects of scaled disclosures on growth, we examine a registrant's capital investment, which is measured by the capital expenditures to assets ratio, as a proxy for real growth. Because there is a high concentration of SRCs in industries for which research and development (“R&D”) investment is important (
Table 6 reports the estimated treatment effect. The number in the Treatment Group vs. Control Group 1 column reflects the difference between: (1) The average change in the metric for the Treatment Group, from the 2006-2007 period, when it was not eligible for scaled disclosure, to the 2008-2009 period, when it was eligible for scaled disclosure, and (2) the average change in the metric between the same periods for Control Group 1, which was never eligible for scaled disclosure. Similarly, the number in the Treatment Group vs. Control Group 2 column reflects the difference between: (1) The average change in the metric for the Treatment Group from the 2006-2007 period, when it was not eligible for scaled disclosure, to the 2008-2009 period, when it was eligible for scaled disclosure and (2) the average change in the metric between the same periods for Control Group 2, which had been eligible for scaled disclosure for both periods.
y = a + b *
where the single-letter terms “
The results in Table 6 suggest that the scaled disclosures had a negative effect on institutional ownership.
The results reflect a positive effect on material restatements in SRCs based on the first year restated, while the effect on analyst coverage is inconclusive. SRCs tend to lose analyst coverage relative to comparable registrants that just missed eligibility, but they gain coverage relative to even smaller registrants that already were eligible for scaled disclosures. There is no statistically significant effect on earnings quality as captured by discretionary accruals measures or the incidence of material restatement based on when the restatement was filed. Overall, the evidence suggests a modest, but statistically significant, negative effect of scaled disclosure on SRCs' overall information environment.
The effect of scaled disclosures on share turnover ratio is negative but statistically insignificant, suggesting no significant effect of scaled disclosures on SRCs' liquidity.
The results in Table 6 indicate no clear difference between SRCs and registrants in Control Group 1 and Control Group 2 in terms of changes in capital investment and R&D investment. The effect on asset growth rate is mixed. There is no significant difference between the Treatment Group and Control Group 1, but compared to Control Group 2, the Treatment Group had deterioration in asset growth rate after the 2007 rules. Overall, our empirical analysis suggests that scaled disclosures have only a minimal effect on growth in current SRCs relative to the Control Groups. Thus, we do not expect the use of scaled disclosures to have a significant effect on the growth of the newly eligible registrants under the final rules.
Similar to our discussion of the amendments to the SRC definition, we generally expect a modest reduction in compliance costs for registrants that are eligible to provide two rather than three years of historical financial statements of certain acquired businesses under Rule 3-05(b)(2)(iv), with corresponding potential modest increases in information asymmetries. We expect the magnitude of the effects of the change in the revenue threshold in Rule 3-05(b)(2)(iv) to be smaller for those registrants that acquire relevant businesses and their investors, as compared to the change in the SRC definition for newly eligible registrants and their investors. The reason for this expectation is that the revenue
Taken together, our empirical analysis suggests that, for most of the newly eligible SRCs under the final rules, scaled disclosures may generate a modest, but statistically significant, amount of cost savings in terms of the reduction in compliance costs, a modest, but statistically significant, deterioration in some of the proxies used to assess the overall quality of information environment, and a muted effect on the growth of the registrant's capital investments, investments in R&D, and assets. We expect the effects on registrants that are newly eligible for reduced disclosure under Rule 3-05(b)(2)(iv) to be lesser in magnitude but qualitatively similar.
In general, holding market value constant, the use of public float to define eligibility favors registrants with more affiliated ownership. If we consider two registrants with the same market value but different affiliated ownership, the one with greater affiliated ownership will have a lower public float, which is the value of non-affiliated ownership, and thus will be more likely to qualify for SRC status based on the public float threshold. This could be problematic if the adverse selection problem creates a conflict of interest between affiliated owners—who are often the decision makers—and non-affiliated owners—who are often the uninformed minority shareholders on whom reduced disclosure may have a greater impact. We examine whether the effects of scaled disclosure on registrants' information environment, liquidity, and growth depend on the percentage of affiliated ownership, which is the market value of affiliated equity shares divided by the registrant's total market value of equity. The average affiliated ownership is 43% for SRCs in the treatment group in years 2008 and 2009 (median 42%). Specifically, we examine whether and to what extent the effects of scaled disclosure on information environment, liquidity, and growth differ for SRCs with high, or above-average, affiliated ownership as compared to low, or below-average, affiliated ownership.
The results are reflected in Table 7. The number in the Treatment Group vs. Control Group 1 column reflects the difference between: (1) The difference between the average metric of registrants in the Treatment Group with affiliated ownership that is higher than the group median and that of the registrants in the Treatment Group with affiliated ownership that is lower than the group median and (2) the difference between the average metric of registrants in Control Group 1 with affiliated ownership that is higher than the group median and that of the registrants in Control Group 1 with affiliated ownership that is lower than the group median. Similarly, the number in the Treatment Group vs. Control Group 2 column reflects the difference between: (1) The difference between the average metric for the higher-than-median affiliated ownership registrants and that of the lower-than-median affiliated ownership registrants in the Treatment Group and (2) the difference between the average metrics for the same sectors of Control Group 2.
y =
where the single-letter terms “
Our analysis
The final rules may have competitive effects. On one hand, the amendments may reduce the compliance-related costs of newly eligible registrants relative to current SRCs. The amendments may also increase the competitive advantage of the newly eligible registrants relative to non-eligible registrants that compete with them in the product market. However, because there is no clear evidence that scaled disclosures have a significant effect on the growth of current SRCs, we expect these potentially positive competitive effects to be modest. On the other hand, setting any eligibility threshold may create a competitive disadvantage for those registrants that miss eligibility because their public float or revenue is just above the specified threshold, relative to the newly eligible registrants. However, our economic analysis suggests that this potentially negative effect also is likely to be modest.
As discussed above, our empirical analysis suggests that scaled disclosures are unlikely to have a significant negative effect on the overall information environment of SRCs. Thus, we do not expect the amendments to have a significant negative effect on the information efficiency of affected parties. Finally, it is difficult to quantify the effect of scaled disclosures on capital formation. The Commission's 2007 amendments coincided with the 2008 financial crisis and its aftermath, which contributed to extremely thin public capital market activities. The potential cost savings and the potential negative consequences of scaled disclosure for reporting companies discussed in Tables 5 and 6 (based on data encompassing the period during the financial crisis) are modest. These figures do not include potential cost savings from newly-eligible companies that may contemplate going public.
In this section, we present several alternatives to the final rules and discuss their relative costs and benefits.
As a first alternative, we could have used a different registrant size metric in the SRC definition. While public float has the advantage of capturing the value held by non-affiliated investors who may be more affected by informational asymmetries, the disadvantage of public float is twofold. First, reported public float numbers are not easily verifiable. Second, using public float to define eligibility may increase adverse selection due to conflicts of interest between affiliated and non-affiliated owners. We considered equity market value as an alternative size metric to public float. Equity market value is in many instances more accessible and more easily verifiable than public float. It does not as effectively differentiate registrants based on the degree of informational asymmetry concerns, but it also does not favor registrants with more affiliated ownership. If we define registrants as SRCs when they have (1) less than $250 million in equity market value, (2) no equity market value and revenue below $100 million, or (3) less than $700 million in equity market value and revenue below $100 million, the number of registrants estimated to become eligible for scaled disclosure declines by five percent, relative to the number that are estimated to be eligible under the rule amendments with available 2016 data on public float, revenue and market value. Thus, this alternative would lead to a slightly smaller pool of registrants eligible for SRC status than under the amendments.
As a second alternative, we could have used different thresholds. Neither public float nor revenue data show a natural breakpoint for different thresholds. For example, we could take inflation since 2007 into account, raising the public float threshold from $75 million to $86.2 million and the revenue threshold from $50 million to $57.5 million. An inflation adjustment of the current thresholds would expand the pool of eligible SRCs by 83 registrants, 78 of which reported public float of between $75 million and $86.2 million in their 2016 Form 10-Ks, and five of which had no public float and revenue of between $50 million and $57.5 million.
For registrants with no public float or public float of less than $700 million, instead of the $100 million revenue threshold, we could have used a revenue threshold of $1 billion. A $1 billion revenue threshold would make scaled disclosure accommodations for SRCs and EGCs generally more consistent for the subset of SRCs that have no public float or public float of less than $700 million.
As a third alternative, we could have considered reducing the number of registrants that our rules define as accelerated filers, which would expand the number of registrants eligible for the Sarbanes-Oxley Act Section 404(b) exemption. The newly eligible SRCs under the final rules will remain accelerated filers and must comply with Section 404(b). This creates two tiers among SRCs. Registrants with public floats below $75 million are eligible for the scaled disclosures and, as non-accelerated filers, are exempt from Section 404(b). Registrants with either (1) public floats of $75 million or more and less than $250 million or (2) public floats of $75 million or more and less than $700 million and less than $100 million in revenues will be eligible only for the scaled disclosures and, as accelerated filers, must comply with Section 404(b). In evaluating the costs and benefits of this alternative, we considered the comments that the Commission received in response to the Proposing Release. In light of these comments, as stated above, the Chairman has directed the staff to formulate recommendations to the Commission for possible changes to reduce the number of registrants that our rules define as accelerated filers.
The final rules will affect existing rules, regulations and forms that contain “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995 (“PRA”).
The titles of the collections of information are:
(1) “Regulation S-X” (OMB Control No. 3235-0009);
(2) “Regulation S-K” (OMB Control No. 3235-0071);
(3) “Regulation C” (OMB Control No. 3235-0074);
(4) “Regulation 12B” (OMB Control No. 3235-0062);
(5) “Form 10-K” (OMB Control No. 3235-0063);
(6) “Form 10-Q” (OMB Control No. 3235-0070);
(7) “Form 8-K” (OMB Control No. 3235-0060);
(8) “Regulation 14A and Schedule 14A” (OMB Control No. 3235-0059);
(9) “Regulation 14C and Schedule 14C” (OMB Control No. 3235-0057);
(10) “Form 10” (OMB Control No. 3235-0064);
(11) “Form S-1” (OMB Control No. 3235-0065);
(12) “Form S-3” (OMB Control No. 3235-0073);
(13) “Form S-4” (OMB Control No. 3235-0324); and
(14) “Form S-11” (OMB Control No. 3235-0067).
We adopted the existing rules, regulations, and forms pursuant to the Securities Act and the Exchange Act. These rules, regulations, and forms set forth the disclosure requirements for annual and quarterly reports, proxy and information statements, current reports, and registration statements that are prepared by registrants to provide investors information to make informed investment and voting decisions.
The hours and costs associated with preparing disclosure, filing information required by forms, and retaining records constitute reporting and cost burdens imposed by collection of information requirements. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information requirement unless it displays a currently valid control number. Compliance with the information collections listed above is mandatory to the extent applicable to each registrant.
As described in more detail above, we are adopting final rules to amend the definition of SRC to encompass a greater number of registrants and to revise Rule 3-05(b)(2)(iv) of Regulation S-X to align the revenue threshold in that rule with the new revenue threshold in the definition of SRC. The final rules make scaled disclosure accommodations available to a larger number of registrants. As a result, the final rules should decrease the disclosure requirements for registrants that fall within the expanded thresholds of the SRC definition and should decrease the disclosure burden for registrants acquiring other companies by increasing the number of acquired companies for which Rule 3-05(b)(2)(iv) of Regulation S-X permits one less year of financial information to be disclosed.
In the Proposing Release, we proposed to amend the SRC definition to include registrants with a public float of less than $250 million, as well as registrants with annual revenues of less than $100 million for the previous year and no public float. We are adopting the amendments generally as proposed with two changes. In a change from the proposal, the SRC definition in the final rules also will include registrants with annual revenues of less than $100 million for the previous year and a public float of less than $700 million. As detailed below, the burden estimates for the respective forms and schedules have been revised to reflect that the SRC scaled disclosure accommodations also will be available to the additional registrants that come within these revised thresholds.
In another change from the proposal, we are amending Rule 3-05(b)(2)(iv) of Regulation S-X to increase the revenue threshold under which certain registrants may omit from certain registration statements or current reports the earliest of the three fiscal years of audited financial statements of an acquired business or business to be acquired.
The final rules do not change the amount of information required to be included in Exchange Act reports by any registrant because of its status as an accelerated filer or a large accelerated filer.
One commenter addressed the specific PRA-related comment requests in the Proposing Release.
For purposes of the PRA, the final rules decrease the burden hour and costs estimates for Form 10-K, Form 10-Q, Schedule 14A, Schedule 14C, Form 10, Form S-1, Form S-3, Form S-4, and Form S-11 by approximately 493,016 burden hours and decrease external costs by approximately $66,242,345.
Our burden hour and cost estimates below reflect the average burdens for all registrants that may benefit from the expanded accommodations. In deriving our estimates, we recognize that the burdens likely will vary among individual registrants based on a number of factors, including the size and complexity of their business. We believe that some registrants will experience costs in excess of this average and some registrants will experience less than the average costs.
For quarterly and annual reports and for proxy and information statements, we estimate that 75% of the burden of preparation is carried by the registrant internally and that 25% of the burden is carried by outside professionals retained by the registrant at an average cost of $400 per hour.
In addition, this estimated realization rate is further reduced to reflect that a portion of newly eligible SRCs may already qualify as EGCs, which are eligible to rely on certain scaled disclosure requirements for a limited period, including some of the scaled requirements available to SRCs. Based on data collected by DERA, 365, or approximately 37.8%, of the 966 registrants in 2016 that would have been newly eligible for scaled disclosure under the final rules were EGCs and therefore already benefitting from a portion of these estimated savings.
For purposes of the PRA, we estimate that over a three-year period,
• 403,250 hours and $53,883,321 of external costs for Form 10-K;
• 88,864 hours and $11,851,661 of external costs for Form 10-Q;
• 481 hours and $64,160 of external costs for Schedule 14A;
• 11 hours and $1,440 of external costs for Schedule 14C;
• nine hours and $11,163 of external costs for Form 10;
• 145 hours and $174,000 of external costs for Form S-1;
• 38 hours and $45,600 of external costs for Form S-3;
• 203 hours and $243,600 of external costs for Form S-4; and
• 15 hours and $17,400 of external costs for Form S-11.
We estimate that approximately 966 additional registrants will satisfy the revised definition of a SRC and become eligible to use scaled disclosure in their annual reports on Form 10-K. These registrants could experience burden and cost savings under the final rules.
Accordingly, we estimate that, if all eligible registrants used all available scaled disclosure, the final rules would decrease the compliance burden of Form 10-K by up to 504,062.65 hours (1,793.80 internal hours per filing using standard Regulation S-K and Regulation S-X disclosure minus 1,272.00 internal hours per filing using scaled disclosure = 521.80 internal hours saved per filing × 966 filings) and decrease the cost by up to $67,291,651.41 (598.15 professional hours per filing using standard Regulation S-K and Regulation S-X disclosure minus 424.00 professional hours per filing using scaled disclosure = 174.15 external hours saved per filing × $400 per hour = $69,660.09 external cost savings per filing × 966 filings).
Based on our assumption that 80% of newly eligible registrants will begin to use scaled disclosure, we estimate an aggregate decrease of 403,250 internal burden hours and costs of $53,833,321 for Form 10-K.
We assume that the same approximately 966 registrants will become newly eligible to use scaled disclosure for purposes of their quarterly reports. We estimate that if all of these registrants used all of the scaled SRC requirements, they would save
Accordingly, we estimate that, if all eligible registrants used all available scaled disclosure, the final rules would decrease the compliance burden of Form 10-Q by up to 111,080.34 hours (140.57 internal hours per filing using standard Regulation S-K disclosure minus 102.24 internal hours per filing using scaled disclosure = 38.33 internal hours saved per filing × 966 registrants × 3 filings per year) and decrease the cost by up to $14,814,576.00 (46.86 professional hours per filing using standard Regulation S-K disclosure minus 34.08 professional hours per filing using scaled disclosure = 12.78 external hours saved per filing × $400 per hour = $5,112 external cost savings per filing × 966 registrants × 3 filings per year).
Assuming that 80% of newly eligible registrants will begin to use scaled disclosure, we estimate an aggregate decrease of 88,864 internal burden hours and costs of $11,851,661 for Form 10-Q.
We estimate that the amendments to Rule 3-05 may decrease the existing paperwork burden for some registrants but not change the total burden estimates for Form 8-K. This reflects our appraisal that few registrants are eligible to rely on the $50 million threshold in Rule 3-05(b)(2)(iv) and our expectation that the amendments will not significantly change the number of registrants that are eligible to rely on Rule 3-05(b)(2)(iv).
We estimate that registrants newly eligible to use scaled disclosure will file approximately 802 definitive proxy statements on Schedule 14A per year.
Accordingly, we estimate that, if all eligible registrants used all available scaled disclosure, the final rules would decrease the compliance burden of Schedule 14A by up to 601.57 hours (0.75 internal hours saved per filing × 802 filings) and decrease the cost by up to $80,200.00 (0.25 professional hours saved per filing × $400 per hour = $100 external cost savings per filing × 802 filings).
Assuming that 80% of newly eligible registrants will begin to use scaled disclosure, we estimate an aggregate decrease of 481 internal burden hours and costs of $64,160 for Schedule 14A.
We estimate that registrants newly eligible to use scaled disclosure will file approximately 18 definitive information statements on Schedule 14C per year.
Accordingly, we estimate that, if all eligible registrants used all available scaled disclosure, the final rules would decrease the compliance burden of Schedule 14C by up to 13.48 hours (0.75 internal hours saved per filing × 18 filings) and decrease the cost by up to $1,800.00 (0.25 professional hours saved per filing × $400 per hour = $100 external cost savings per filing × 18 filings).
Assuming that 80% of newly eligible registrants will begin to use scaled disclosure, we estimate an aggregate decrease in burden of 11 internal burden hours and costs of $1,440 for Schedule 14C.
We estimate that registrants newly eligible to use scaled disclosure will file one registration statements on Form 10 per year.
Based on data collected by DERA, registrants that would have been newly eligible to use scaled disclosure under the final rules filed an average of less than one registration statement on Form 10 per year during the period 2014 through 2016. However, we believe an estimate of one Form 10 is more reasonable because, as reflected in the Proposing Release, such registrants have filed more than one Form 10 in prior years.
Accordingly, if all eligible registrants used all available scaled disclosure, we estimate that the final rules will decrease the compliance burden of Form 10 by up to 9.30 hours (53.80 internal hours per filing using standard Regulation S-K and Regulation S-X disclosure minus 44.50 internal hours per filing using scaled disclosure = 9.30 internal hours saved per filing × one filing) and decrease the cost by up to $11,163.20 (161.41 professional hours per filing using standard Regulation S-K and Regulation S-X disclosure minus 133.50 professional hours per filing using scaled disclosure = 27.91 external hours saved per filing × $400 per hour = $11,163.20 external cost savings per filing × one filing).
We estimate that registrants newly eligible to use scaled disclosure will file approximately 25 registration statements on Form S-1 per year.
Accordingly, we estimate that, if all eligible registrants used all available scaled disclosure, the final rules would decrease the compliance burden of Form S-1 by up to 181.25 hours (166.75 internal hours per filing using standard Regulation S-K and Regulation S-X disclosure minus 159.50 internal hours per filing using scaled disclosure = 7.25 internal hours saved per filing × 25 filings) and decrease the cost by up to $217,500.00 (500.25 professional hours per filing using standard Regulation S-K and Regulation S-X disclosure minus 478.50 professional hours per filing using scaled disclosure = 21.75 external hours saved per filing × $400 per hour = $8,700 external cost savings per filing × 25 filings).
Assuming that 80% of these newly eligible registrants will begin to use scaled disclosure, we estimate an aggregate decrease of 145 internal burden hours and costs of $174,000 for Form S-1.
We estimate that registrants newly eligible to use scaled disclosure will file approximately 190 registration statements on Form S-3 per year.
Accordingly, we estimate that, if all eligible registrants used all available scaled disclosure, the final rules would decrease the compliance burden of Form S-3 by up to 47.50 hours (0.25 internal hours saved per filing × 190 filings) and decrease the cost by up to $57,000.00 ($300 external cost savings per filing × 190 filings).
Assuming that 80% of the newly eligible registrants will begin to use scaled disclosure, we estimate an aggregate decrease of 38 internal burden hours and costs of $ 45,600 for Form S-3.
We estimate that registrants newly eligible to use scaled disclosure will file approximately 35 registration statements on Form S-4 per year.
Accordingly, we estimate that, if all eligible registrants used all available scaled disclosure, the final rules will decrease the compliance burden of Form S-4 by up to 253.75 hours (7.25 internal hours saved per filing × 35 filings) and decrease the annual cost by up to $304,500.00 ($8,700 external cost savings per filing × 35 filings).
Assuming that 80% of newly eligible registrants will begin to use scaled disclosure, we estimate an aggregate decrease of 203 internal burden hours and costs of $243,600 for Form S-4.
We estimate that registrants newly eligible to use scaled disclosure will file approximately two registration statements on Form S-11 per year.
Accordingly, we estimate that, if both eligible registrants used all available scaled disclosure, the final rules will decrease the compliance burden of Form S-11 by up to 14.50 hours (7.25 internal hours saved per filing × two filings) and decrease the annual cost by up to $17,400.00 ($8,700 external cost savings per filing × two filings).
Due to the low number of Form S-11 filers and rounding considerations, we assume that both of the newly eligible registrants filing Form S-11 will begin to use scaled disclosure and realize the full extent of burden and cost savings.
The Regulatory Flexibility Act (“RFA”)
The amendments to the SRC definition in the final rules are intended to promote capital formation through a modest reduction in compliance costs and disclosure burdens for these registrants by expanding the number of registrants that qualify as SRCs and are eligible to provide scaled disclosure, while maintaining appropriate investor protections. These amendments will
The amendments to Rule 3-05(b)(2)(iv) of Regulation S-X will maintain the consistency of the revenue thresholds in Rule 3-05 and the definition of a SRC. The current revenue threshold in Rule 3-05(b)(2)(iv) was based on the revenue threshold in the SRC definition, and the final rules maintain this consistency by increasing the revenue threshold in Rule 3-05(b)(2)(iv) to $100 million. This amendment will enable more registrants to omit the earliest of the three fiscal years of audited financial statements of an acquired business or business to be acquired in certain registration statements and current reports.
The amendments to the accelerated filer and large accelerated filer definitions in Exchange Act Rule 12b-2 maintain the current thresholds at which registrants are subject to accelerated and large accelerated filer disclosure and filing requirements. At this time, we are not raising the accelerated filer public float threshold or modifying the Section 404(b) requirements for registrants.
The need for, and objectives of, the final rules are discussed in more detail in Sections II and IV above.
In the Proposing Release, we requested comment on all aspects of the IRFA, including the number of small entities that would be affected by the proposed amendments, the existence or nature of the potential impact of the proposals on small entities discussed in the analysis, and how to quantify the impact of the proposed amendments. We did not receive any comments specifically addressing the IRFA. We did, however, receive comments from members of the public on matters that could potentially impact small entities. These comments are discussed at length by topic in the corresponding subsections of Section II above.
While many commenters expressed support for the proposed amendments to the SRC definition,
We are not, however, adopting a revenue test without a limitation on the public float or market capitalization of the company, as specifically suggested by two commenters.
Two commenters recommended amending Rule 3-05 to increase the revenue threshold in paragraph (b)(2)(iv) to $100 million to maintain the alignment between Rule 3-05 and the definition of a SRC.
While some commenters supported eliminating the provision in the accelerated filer and large accelerated filer definitions that specifically excludes registrants that are eligible to use the SRC disclosure requirements for their annual or quarterly reports,
The final rules include amendments to the accelerated filer and large accelerated filer definitions in Exchange Act Rule 12b-2 to maintain the current thresholds at which registrants are subject to accelerated and large accelerated filer disclosure and filing requirements. These amendments will change the current relationship between
We believe that the final rules will reduce disclosure burdens by expanding the number of registrants that will qualify as SRCs and that are eligible to provide scaled disclosure, while maintaining appropriate investor protections.
For purposes of the RFA, under 17 CFR 230.157 (Securities Act Rule 157), an issuer, other than an investment company, is a “small business” or “small organization” if it had total assets of $5 million or less on the last day of its most recent fiscal year and is engaged or proposing to engage in an offering of securities not exceeding $5 million. Under 17 CFR 240.0-10(a) (Exchange Act Rule 0-10(a)), an issuer, other than an investment company, is a “small business” or “small organization” if it had total assets of $5 million or less on the last day of its most recent fiscal year.
We estimate that there are currently 1,181 entities that qualify as “small” under the definitions set forth above.
The amendments to the SRC definition in the final rules increase the number of registrants eligible to provide scaled disclosures in response to Regulation S-K and Regulation S-X disclosure requirements. These amendments do not revise the scaled disclosure requirements themselves, but could modestly decrease the disclosures required for registrants that will qualify as SRCs under the expanded thresholds.
Consistent with the amendments to the revenue threshold in the SRC definition, the amendment to Rule 3-05 of Regulation S-X raises the net revenue threshold in Rule 3-05(b)(2)(iv) of Regulation S-X from $50 million to $100 million. Current Rule 3-05(b)(2)(iv) allows certain registrants to omit financial statements of businesses acquired or to be acquired in certain registration statements and current reports for the earliest of the three fiscal years required if the net revenues of the business to be acquired are less than $50 million. With the amendment, those registrants will become eligible to omit the relevant financial statements for acquired businesses with net annual revenues of $50 million or more but less than $100 million in the most recent fiscal year. In this way, the amendment to Rule 3-05 could moderately decrease the existing disclosure requirements for some registrants; however, we do not expect that the number of registrants affected by the amendments will be significant.
Both (i) the amendments to the SRC definition, which expand the number of registrants that qualify for the scaled disclosure based on revenue and public float measures, and (ii) the amendment to Rule 3-05 of Regulation S-X, which expands the pool of acquired companies for which registrants are required to provide only two years of financials, reduce disclosure already required to be prepared under our rules. Accordingly, there are no particular professional skills needed to comply with the amendments themselves. Consistent with the current rules, however, a registrant will need to monitor the applicable thresholds for disclosure and to comply with the underlying existing disclosure requirements, which may require the use of professional skills, including information technology, accounting, and legal skills.
The amendments are discussed in detail in Section II above. We discuss the economic impact, including the estimated compliance costs and burdens, of the final rules in Section IV (Economic Analysis) and Section V (Paperwork Reduction Act) above.
The RFA directs us to consider significant alternatives that would accomplish the stated objectives of the amendments, while minimizing any significant adverse impact on small entities. Accordingly, we considered the following alternatives:
• Establishing different compliance or reporting requirements or timetables that take into account the resources available to small entities;
• clarifying, consolidating or simplifying compliance and reporting requirements for small entities under our rules as revised by the amendments;
• using performance rather than design standards; and
• exempting small entities from coverage of all or part of the amendments.
The amendments generally do not create any new compliance or reporting requirements. Instead, the amendments expand the number of companies eligible for the different compliance and reporting requirements available to SRCs and increase the revenue threshold to qualify for the disclosure accommodation in Rule 3-05(b)(2)(iv) of Regulation S-X.
In Section IV, above, we discuss additional alternatives that we have considered and their economic impact.
The rule amendments described in this release are being adopted pursuant to Sections 7, 10 and 19 of the Securities Act (15 U.S.C. 77a
Reporting and recordkeeping requirements, Securities.
For the reasons set out in the preamble, the Commission is amending title 17, chapter II of the Code of Federal Regulations as follows:
15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26), 77nn(25), 77nn(26), 78c, 78j-1, 78
(b) * * *
(2) * * *
(iv) If any of the conditions exceed 50 percent, the full financial statements specified in §§ 210.3-01 and 210.3-02 shall be furnished. However, financial statements for the earliest of the three fiscal years required may be omitted if net revenues reported by the acquired business in its most recent fiscal year are less than $100 million.
15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78j-3, 78
(f) * * *
(1)
(i) Had a public float of less than $250 million; or
(ii) Had annual revenues of less than $100 million and either:
(A) No public float; or
(B) A public float of less than $700 million.
(2)
(i) For issuers that are required to file reports under section 13(a) or 15(d) of the Exchange Act:
(A) Public float is measured as of the last business day of the issuer's most recently completed second fiscal quarter and computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity;
(B) Annual revenues are as of the most recently completed fiscal year for which audited financial statements are available; and
(C) An issuer must reflect the determination of whether it came within the definition of smaller reporting company in its quarterly report on Form 10-Q for the first fiscal quarter of the next year, indicating on the cover page of that filing, and in subsequent filings for that fiscal year, whether it is a smaller reporting company, except that, if a determination based on public float indicates that the issuer is newly eligible to be a smaller reporting company, the issuer may choose to reflect this determination beginning with its first quarterly report on Form 10-Q following the determination, rather than waiting until the first fiscal quarter of the next year.
(ii) For determinations based on an initial registration statement under the Securities Act or Exchange Act for shares of its common equity:
(A) Public float is measured as of a date within 30 days of the date of the filing of the registration statement and computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of shares of its voting and non-voting common equity included in the registration statement by the estimated public offering price of the shares;
(B) Annual revenues are as of the most recently completed fiscal year for
(C) The issuer must reflect the determination of whether it came within the definition of smaller reporting company in the registration statement and must appropriately indicate on the cover page of the filing, and subsequent filings for the fiscal year in which the filing is made, whether it is a smaller reporting company. The issuer must re-determine its status at the end of its second fiscal quarter and then reflect any change in status as provided in paragraph (f)(2)(i)(C) of this section. In the case of a determination based on an initial Securities Act registration statement, an issuer that was not determined to be a smaller reporting company has the option to re-determine its status at the conclusion of the offering covered by the registration statement based on the actual offering price and number of shares sold.
(iii) Once an issuer determines that it does not qualify for smaller reporting company status because it exceeded one or more of the current thresholds, it will remain unqualified unless when making its annual determination either:
(A) It determines that its public float was less than $200 million; or
(B) It determines that its public float and its annual revenues meet the requirements for subsequent qualification included in the following chart:
15 U.S.C. 77b, 77b note, 77c, 77d, 77f, 77g, 77h, 77j, 77r, 77s, 77z-3, 77sss, 78c, 78d, 78j, 78
(1) Had a public float of less than $250 million; or
(2) Had annual revenues of less than $100 million and either:
(i) No public float; or
(ii) A public float of less than $700 million.
(3) Whether an issuer is a smaller reporting company is determined on an annual basis.
(i) For issuers that are required to file reports under section 13(a) or 15(d) of the Exchange Act:
(A) Public float is measured as of the last business day of the issuer's most recently completed second fiscal quarter and computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity;
(B) Annual revenues are as of the most recently completed fiscal year for which audited financial statements are available; and
(C) An issuer must reflect the determination of whether it came within the definition of smaller reporting company in its quarterly report on Form 10-Q for the first fiscal quarter of the next year, indicating on the cover page of that filing, and in subsequent filings for that fiscal year, whether it is a smaller reporting company, except that, if a determination based on public float indicates that the issuer is newly eligible to be a smaller reporting company, the issuer may choose to reflect this determination beginning with its first quarterly report on Form 10-Q following the determination, rather than waiting until the first fiscal quarter of the next year.
(ii) For determinations based on an initial registration statement under the Securities Act or Exchange Act for shares of its common equity:
(A) Public float is measured as of a date within 30 days of the date of the filing of the registration statement and computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of shares of its voting and non-voting common equity included in the registration statement by the estimated public offering price of the shares;
(B) Annual revenues are as of the most recently completed fiscal year for which audited financial statements are available; and
(C) The issuer must reflect the determination of whether it came within the definition of smaller reporting company in the registration statement and must appropriately indicate on the cover page of the filing, and subsequent filings for the fiscal year in which the filing is made, whether it is a smaller reporting company. The issuer must re-determine its status at the end of its second fiscal quarter and then reflect any change in status as provided in paragraph (3)(i)(C) of this definition. In the case of a determination based on an initial Securities Act registration statement, an issuer that was not determined to be a smaller reporting company has the option to re-determine its status at the conclusion of the offering covered by the registration statement based on the actual offering price and number of shares sold.
(iii) Once an issuer determines that it does not qualify for smaller reporting company status because it exceeded one or more of the current thresholds, it will remain unqualified unless when making its annual determination either:
(A) It determines that its public float was less than $200 million; or
(B) It determines that its public float and its annual revenues meet the requirements for subsequent qualification included in the following chart:
15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77sss, 78c, 78
The text of Form S-1 does not, and this amendment will not, appear in the Code of Federal Regulations.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
The text of Form S-3 does not, and this amendment will not, appear in the Code of Federal Regulations.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
The text of Form S-8 does not, and this amendment will not, appear in the Code of Federal Regulations.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
The text of Form S-11 does not, and this amendment will not, appear in the Code of Federal Regulations.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
The text of Form S-4 does not, and this amendment will not, appear in the Code of Federal Regulations.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78k, 78k-1, 78
The addition and revision reads as follows:
(1) Had a public float of less than $250 million; or
(2) Had annual revenues of less than $100 million and either:
(i) No public float; or
(ii) A public float of less than $700 million.
(3) Whether an issuer is a smaller reporting company is determined on an annual basis.
(i) For issuers that are required to file reports under section 13(a) or 15(d) of the Exchange Act:
(A) Public float is measured as of the last business day of the issuer's most recently completed second fiscal quarter and computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity;
(B) Annual revenues are as of the most recently completed fiscal year for which audited financial statements are available; and
(C) An issuer must reflect the determination of whether it came within the definition of smaller reporting company in its quarterly report on Form 10-Q for the first fiscal quarter of the next year, indicating on the cover page of that filing, and in subsequent filings for that fiscal year, whether it is a smaller reporting company, except that, if a determination based on public float indicates that the issuer is newly eligible to be a smaller reporting company, the issuer may choose to reflect this determination beginning with its first quarterly report on Form 10-Q following the determination, rather than waiting until the first fiscal quarter of the next year.
(ii) For determinations based on an initial registration statement under the Securities Act or Exchange Act for shares of its common equity:
(A) Public float is measured as of a date within 30 days of the date of the filing of the registration statement and computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of shares of its voting and non-voting common equity included in the registration statement by the estimated public offering price of the shares;
(B) Annual revenues are as of the most recently completed fiscal year for which audited financial statements are available; and
(C) The issuer must reflect the determination of whether it came within the definition of smaller reporting company in the registration statement and must appropriately indicate on the cover page of the filing, and subsequent filings for the fiscal year in which the filing is made, whether it is a smaller reporting company. The issuer must re-determine its status at the end of its second fiscal quarter and then reflect any change in status as provided in paragraph (3)(i)(C) of this definition. In the case of a determination based on an initial Securities Act registration statement, an issuer that was not determined to be a smaller reporting company has the option to re-determine its status at the conclusion of the offering covered by the registration
(iii) Once an issuer determines that it does not qualify for smaller reporting company status because it exceeded one or more of the current thresholds, it will remain unqualified unless when making its annual determination either:
(A) It determines that its public float was less than $200 million; or
(B) It determines that its public float and its annual revenues meet the requirements for subsequent qualification included in the following chart:
15 U.S.C. 78a
The text of Form 10 does not, and this amendment will not, appear in the Code of Federal Regulations.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
The text of Form 10-Q does not, and this amendment will not, appear in the Code of Federal Regulations.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
The text of Form 10-K does not, and this amendment will not, appear in the Code of Federal Regulations.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
By the Commission.
Environmental Protection Agency (EPA).
Proposed rule.
Under section 211 of the Clean Air Act, the Environmental Protection Agency (EPA) is required to set renewable fuel percentage standards every year. This action proposes the annual percentage standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel that apply to gasoline and diesel transportation fuel produced or imported in the year 2019. Relying on statutory waiver authority that is available when the projected cellulosic biofuel production volume is less than the applicable volume specified in the statute, EPA is proposing volume requirements for cellulosic biofuel, advanced biofuel, and total renewable fuel that are below the statutory volume targets. We are also proposing the applicable volume of biomass-based diesel for 2020.
Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2018-0167, at
Julia MacAllister, Office of Transportation and Air Quality, Assessment and Standards Division, Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: 734-214-4131; email address:
Entities potentially affected by this proposed rule are those involved with the production, distribution, and sale of transportation fuels, including gasoline and diesel fuel or renewable fuels such as ethanol, biodiesel, renewable diesel, and biogas. Potentially affected categories include:
This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this proposed action. This table lists the types of entities that EPA is now aware could potentially be affected by this proposed action. Other types of entities not listed in the table could also be affected. To determine whether your entity would be affected by this proposed action, you should carefully examine the applicability criteria in 40 CFR part 80. If you have any questions regarding the applicability of this proposed action to a particular entity, consult the person listed in the
The Renewable Fuel Standard (RFS) program began in 2006 pursuant to the requirements in Clean Air Act (CAA) section 211(o) that were added through the Energy Policy Act of 2005 (EPAct). The statutory requirements for the RFS program were subsequently modified through the Energy Independence and Security Act of 2007 (EISA), leading to the publication of major revisions to the regulatory requirements on March 26, 2010.
The statute includes annual volume targets, and requires EPA to translate those volume targets (or alternative volume requirements established by EPA in accordance with statutory waiver authorities) into compliance obligations that obligated parties must meet every year. In this action we are proposing the applicable volumes for cellulosic biofuel, advanced biofuel, and total renewable fuel for 2019, and biomass-based diesel (BBD) for 2020.
Today, nearly all gasoline used for transportation purposes contains 10 percent ethanol (E10), and on average diesel fuel contains nearly 5 percent biodiesel and/or renewable diesel.
The resulting proposed volume requirements for 2019 are shown in Table I-1 below. Relative to the levels finalized for 2018, the 2019 volume requirements for advanced biofuel and total renewable fuel would be higher by 590 million gallons. Approximately 90 million gallons of this increase would be due to the increase in the projected production of cellulosic biofuel in 2019 relative to 2018. We are also proposing to establish the volume requirement for BBD for 2020 at 2.43 billion gallons. This volume is 330 million gallons higher than the volume for 2019.
This section briefly summarizes the major provisions of this final rule. We are proposing applicable volume requirements and associated percentage standards for cellulosic biofuel, advanced biofuel, and total renewable fuel for 2019; for BBD we are proposing the percentage standard for 2019 and the applicable volume requirement for 2020.
For advanced biofuel and total renewable fuel, we are proposing reductions based on the “cellulosic waiver authority” that would result in advanced biofuel and total renewable fuel volume requirements that are lower than the statutory targets by the same magnitude as the reduction in the cellulosic biofuel applicable volume. This follows the same general approach as in the 2018 final rule. The proposed volumes for cellulosic biofuel, advanced biofuel, and total renewable fuel exceed the required volumes for these fuel types in 2018.
Section II provides a general description of our approach to setting volume requirements in today's rule, including a review of the statutory waiver authorities and our consideration of carryover RINs. Section III provides our assessment of the 2019 cellulosic biofuel volume, based on a projection of production that reflects a neutral aim at accuracy. Section IV describes our assessment of advanced biofuel and total renewable fuel. Finally, Section VI provides our proposal regarding the 2020 BBD volume requirement, reflecting a proposed analysis of a set of factors stipulated in CAA section 211(o)(2)(B)(ii).
EPA must annually determine the projected volume of cellulosic biofuel production for the following year. If the projected volume of cellulosic biofuel production is less than the applicable volume specified in section 211(o)(2)(B)(i)(III) of the statute, EPA must lower the applicable volume used to set the annual cellulosic biofuel percentage standard to the projected production volume. In this rule we are proposing a cellulosic biofuel volume requirement of 381 million ethanol-equivalent gallons for 2019 based on our production projection. Our projection reflects consideration of RIN generation data for past years and 2018 to date that is available to EPA through EMTS; the information we have received regarding individual facilities' capacities, production start dates, and biofuel production plans; a review of cellulosic biofuel production relative to EPA's projections in previous annual rules; and EPA's own engineering judgment. To project cellulosic biofuel production for 2019 we used the same basic methodology described in the 2018 final rule. However, we have used updated data to derive percentile values used in our production projection for liquid cellulosic biofuels and to derive the year-over-year change in the rate of production of CNG/LNG derived from biogas that is used in the projection for CNG/LNG. EPA anticipates that our final projection of cellulosic biofuel will be based on additional data we will obtain prior to issuing the final rule, including an estimate of cellulosic biofuel production for 2019 to be provided by the Energy Information Administration (EIA).
If we reduce the applicable volume of cellulosic biofuel below the volume specified in CAA section 211(o)(2)(B)(i)(III), we also have the authority to reduce the applicable volumes of advanced biofuel and total renewable fuel by the same or a lesser amount. We refer to this as the “cellulosic waiver authority.” The conditions that caused us to reduce the 2018 volume requirement for advanced biofuel below the statutory target remain relevant in 2019. As for 2018, we investigated the projected availability of non-cellulosic advanced biofuels in 2019. We took into account the various constraints on the ability of the market to make advanced biofuels available, the ability of the standards we set to bring about market changes in the time available, the potential impacts associated with diverting biofuels and/or biofuel feedstocks from current uses to the production of advanced biofuel used in the U.S., the fact that the biodiesel tax credit is currently not available for 2019, the tariffs on imports of biodiesel from Argentina and Indonesia, as well as the cost of advanced biofuels. Based on these considerations we are proposing to reduce the statutory volume target for advanced biofuel by the same amount as we are reducing the statutory volume target for cellulosic biofuel. This would result in an advanced biofuel volume for 2019 of 4.88 billion gallons, which would be 590 million gallons higher than the advanced biofuel volume for 2018.
As for advanced biofuel, we are proposing the maximum reduction permissible under the cellulosic waiver authority. We are proposing that the reduction in total renewable fuel would be the same as the reduction in advanced biofuel, such that the resulting implied volume requirement for conventional renewable fuel would be 15 billion gallons.
In EISA, Congress specified increasing applicable volumes of BBD through 2012. Beyond 2012 Congress stipulated that EPA, in coordination with DOE and USDA, was to establish the BBD volume taking into consideration implementation of the program to date and various specified factors, provided that the required volume for BBD could not be less than 1.0 billion gallons. For 2013, EPA established an applicable volume of 1.28 billion gallons. For 2014 and 2015 we established the BBD volume requirement to reflect the actual volume for each of these years of 1.63 and 1.73 billion gallons.
Given current and recent market conditions, the advanced biofuel volume requirement is driving the production and use of biodiesel and renewable diesel volumes over and above volumes required through the separate BBD standard, and we expect this to continue. While EPA continues to believe it is appropriate to maintain the opportunity for other advanced biofuels to compete for market share, the vast majority of the advanced biofuel obligations in recent years have been satisfied with BBD. Thus, after a review of the implementation of the program to date and considering the statutory factors, and in light of the 500 million gallon increase we are proposing for non-cellulosic advanced biofuels, we are proposing, in coordination with USDA and DOE, an applicable volume of BBD for 2020 of 2.43 billion gallons.
The renewable fuel standards are expressed as a volume percentage and are used by each refiner and importer of fossil-based gasoline or diesel to determine their renewable fuel volume obligations.
Four separate percentage standards are required under the RFS program, corresponding to the four separate renewable fuel categories shown in Table I.A-1. The specific formulas we use in calculating the renewable fuel percentage standards are contained in the regulations at 40 CFR 80.1405. The percentage standards represent the ratio of the national applicable volume of renewable fuel volume to the national projected non-renewable gasoline and diesel volume less any gasoline and diesel attributable to small refineries granted an exemption prior to the date that the standards are set. The volume of transportation gasoline and diesel used to calculate the proposed percentage standards was based on the April 2018 version of EIA's Short-Term Energy Outlook.
In the rulemaking notice proposing the 2018 RFS volume requirements, EPA noted that various stakeholders had raised concerns regarding lack of transparency and potential manipulation in the RIN market. We asked for comment from the public on those issues, and received multiple suggestions from stakeholders in response. Commenters suggested a number of potential steps EPA could take, including increasing the public availability of data related to the RIN market; establishing new regulations relating to the purchase, ownership, and retirement of RINs; and increasing coordination with sister federal agencies. Since receiving those comments, we have held additional meetings with stakeholders on these topics, through which we have continued to hear various perspectives on RIN market operations and potential changes.
A number of the comments received in response to the 2018 NPRM suggested increasing the amount of data related to the RIN market that EPA makes publicly available. For example, commenters urged EPA to consider increasing the frequency at which currently available information is posted. EPA is currently exploring the possibility of posting regular updates to the number of RINs we anticipate will be required for compliance. These updates could take into account several factors, such as updated information on gasoline and diesel consumption throughout the year, the impact of small refinery exemptions, and the volume of renewable fuel exported from the United States for which RINs were generated, and would thus need to be retired. EPA is also considering publicly posting average RIN prices based on the price information submitted to EPA through EMTS. Other information that may be of interest to the public could be aggregated information related to the number of RINs held by different categories of entities, such as renewable fuel producers, obligated parties, and parties that neither produce renewable fuel nor have an RVO under the RFS program. Finally, we are considering whether there may be value in increasing the frequency of the release of data that is already posted publicly, such as information related to RIN generation by D-code and fuel type.
Stakeholders have also suggested ways EPA could amend the RFS regulations to change rules related to who may purchase RINs, the duration for which RINs could be held, and other rules related to the buying, selling, or holding of RINs. The goal of such changes would be to minimize or eliminate potential manipulation in the market. EPA is currently considering a handful of ideas, including: Prohibiting parties other than obligated parties from purchasing separated RINS; requiring public disclosure if a party holds a certain percentage of the RIN market; and/or requiring obligated parties to retire RINs for compliance purposes on a more frequent basis (
Finally, we note that multiple stakeholders have encouraged cooperation and coordination between EPA and other federal agencies that may play an oversight role in the RFS or broader fuels market, including the Commodity Futures Trading Commission and the Federal Trade Commission. EPA has engaged with both agencies on an ongoing basis and will continue to do so.
In the annual rule establishing the 2014-2016 renewable fuel standards, we determined that there would be an “inadequate domestic supply” of renewable fuel to consumers in 2016, and so exercised the general waiver authority to reduce the applicable volume of total renewable fuel to a level we believed could be supplied.
EPA is currently considering a number of issues raised by the need to respond to the court's remand in a separate process from this annual rulemaking. EPA is not requesting comment on this rulemaking process at this time and any comments on this issue will be treated as outside of the scope of this rulemaking. EPA understands that there is a compelling need to respond to the remand and intends to expeditiously move ahead with a separate rule to resolve this matter.
The CAA provides EPA with the authority to enact volume requirements below the applicable volume targets specified in the statute under specific circumstances. This section discusses those authorities. As described in the executive summary, we are proposing a single volume requirement for cellulosic biofuel at the level we project to be available for 2019, and an associated applicable percentage standard. For advanced biofuel and total renewable fuel, we are proposing volume requirements and associated applicable percent standards, based on use of the “cellulosic waiver authority” that would result in advanced biofuel and total renewable fuel volume requirements that are lower than the statutory targets by the same magnitude as the reduction in the cellulosic biofuel reduction. This would effectively maintain the implied statutory volumes for non-cellulosic advanced biofuel and conventional biofuel.
In CAA section 211(o)(2), Congress specified increasing annual volume targets for total renewable fuel, advanced biofuel, and cellulosic biofuel for each year through 2022, and for BBD through 2012, and authorized EPA to set volume requirements for subsequent years in coordination with USDA and DOE, and after consideration of specified factors. However, Congress also recognized that under certain circumstances it would be appropriate for EPA to set volume requirements at a lower level than reflected in the statutory volume targets, and thus provided waiver provisions in CAA section 211(o)(7).
Section 211(o)(7)(D)(i) of the CAA provides that if EPA determines that the projected volume of cellulosic biofuel production for a given year is less than the applicable volume specified in the statute, then EPA must reduce the applicable volume of cellulosic biofuel required to the projected production volume for that calendar year. In making this projection, EPA may not “adopt a methodology in which the risk of overestimation is set deliberately to outweigh the risk of underestimation” but must make a projection that “takes neutral aim at accuracy.”
CAA section 211(o)(7)(D)(i) also provides EPA with the authority to reduce the applicable volume of total renewable fuel and advanced biofuel in years when it reduces the applicable volume of cellulosic biofuel under that provision. The reduction must be less than or equal to the reduction in cellulosic biofuel. For 2019, we are also proposing to reduce the applicable volumes of advanced biofuel and total renewable fuel under this authority.
EPA has used the cellulosic waiver authority to lower the cellulosic biofuel, advanced biofuel and total renewable fuel volumes every year since 2014. Further discussion of the cellulosic waiver authority, and EPA's interpretation of it, can be found in the preamble to the 2017 final rule.
In
In this action we are proposing to use the cellulosic waiver authority to reduce the statutory volume targets for advanced biofuels and total renewable fuel by equal amounts, consistent with our long-held interpretation of this provision and our approach in setting the 2014-2018 standards. This approach considers the Congressional objectives reflected in the volume tables in the statute, and the environmental objectives that generally favor the use of advanced biofuels over non-advanced biofuels. See 81 FR 89752-89753 (December 12, 2016). See also 78 FR 49809-49810 (August 15, 2013); 80 FR 77434 (December 14, 2015). We are proposing, as described in Section IV, that the applicable volume for advanced biofuels specified in the statute for 2019 is not attainable, and thus to exercise our cellulosic waiver authority to lower the applicable volume of advanced biofuel by the same quantity as the reduction in cellulosic biofuel, and to provide an equal reduction under the cellulosic waiver authority in the applicable volume of total renewable fuel. The volumes of advanced and total renewable fuel resulting from this exercise of the cellulosic waiver authority provide for an implied volume allowance for conventional biofuel of fifteen billion gallons, equal to the implied statutory volume for 2019.
Section 211(o)(7)(A) of the CAA provides that EPA, in consultation with the Secretary of Agriculture and the Secretary of Energy, may waive the applicable volumes specified in the Act in whole or in part based on a petition by one or more States, by any person subject to the requirements of the Act, or by the EPA Administrator on his own motion. Such a waiver must be based on a determination by the Administrator, after public notice and opportunity for comment that: (1) Implementation of the requirement would severely harm the economy or the environment of a State, a region, or the United States; or (2) there is an inadequate domestic supply. At this time, we do not believe that the circumstances exist that would justify a waiver of volumes under the general waiver authority.
As discussed further in Section IV.C below, EPA is soliciting comment on whether further reductions under the general waiver authority could be justified.
Consistent with our approach in the final rules establishing the RFS standards for 2013 through 2018, we have also considered the availability and role of carryover RINs in evaluating whether we should exercise our discretion to use our waiver authorities in setting the cellulosic, advanced, and total volume requirements for 2019. Neither the statute nor EPA regulations specify how or whether EPA should consider the availability of carryover RINs in exercising the cellulosic waiver authority.
An adequate RIN bank serves to make the RIN market liquid. Just as the economy as a whole functions best when individuals and businesses prudently plan for unforeseen events by maintaining inventories and reserve money accounts, we believe that the RFS program functions best when sufficient carryover RINs are held in reserve for potential use by the RIN holders themselves, or for possible sale to others that may not have established their own carryover RIN reserves. Were there to be no RINs in reserve, then even minor disruptions causing shortfalls in renewable fuel production or distribution, or higher than expected transportation fuel demand (requiring greater volumes of renewable fuel to comply with the percentage standards that apply to all volumes of transportation fuel, including the unexpected volumes) could lead to the need for a new waiver of the standards, undermining the market certainty so critical to the RFS program. Moreover, a significant drawdown of the carryover RIN bank leading to a scarcity of RINs may stop the market from functioning in an efficient manner (
At the time of the 2018 standards final rule, we estimated that there were approximately 2.22 billion total carryover RINs available and decided that carryover RINs should not be counted on to avoid or minimize the need to reduce the 2018 statutory volume targets.
The above discussion applies to total carryover RINs; we have also considered the available volume of advanced biofuel carryover RINs. At the time of the 2018 final rule, we estimated that there were approximately 810 million advanced carryover RINs available.
However, there remains considerable uncertainty surrounding these estimates for a number of reasons, including the potential impact of any future action to address the remand in
We have evaluated the volume of carryover RINs currently available and considered whether it would justify a reduced use of our cellulosic waiver authority in setting the 2019 volume requirements in order to intentionally draw down the carryover RIN bank. For the reasons described above and in Section IV, we do not believe this to be the case. The current bank of carryover RINs provides an important and necessary programmatic buffer that will both facilitate individual compliance and provide for smooth overall functioning of the program. We believe that a balanced consideration of the possible role of carryover RINs in achieving the statutory volume objectives for advanced and total renewable fuels, versus maintaining an adequate bank of carryover RINs for important programmatic functions, is appropriate when EPA exercises its discretion under the cellulosic waiver authority, and that the statute does not specify the extent to which EPA should require a drawdown in the bank of carryover RINs when it exercises this authority. Therefore, for the reasons noted above and consistent with the approach we took in the final rules establishing the RFS standards for 2014 through 2018, we are not proposing to set the 2019 volume requirements at levels that would envision an intentional drawdown in the bank of carryover RINs.
In the past several years, production of cellulosic biofuel has continued to increase. Cellulosic biofuel production reached record levels in 2017, driven largely by CNG and LNG derived from biogas. Production volumes have continued to increase in 2018.
In order to project the volume of cellulosic biofuel production in 2019, we considered the accuracy of the methodologies used to project cellulosic biofuel production in previous years, data reported to EPA through EMTS, and information we collected through meetings with representatives of facilities that have produced or have the potential to produce qualifying volumes of cellulosic biofuel for consumption as transportation fuel, heating oil, or jet fuel in the U.S. in 2019. Our projection of cellulosic biofuel in the final rule will also reflect Energy Information Administration's (EIA) projection of cellulosic biofuel production, comments received on the 2019 NPRM, and updated data on cellulosic biofuel production in 2018 and projections for 2019.
There are two main elements to the cellulosic biofuel production projection. To project the range of potential production volumes of liquid cellulosic biofuel we used the same methodology as the methodology used in the 2018 final rule. However, we have adjusted the percentile values used to select a point estimate within a projected production range for each group of companies based on updated information (through the end of 2017) with the objective of improving the accuracy of the projections. To project the production of cellulosic biofuel RINs for CNG/LNG derived from biogas we use the same year-over-year growth rate methodology as in the 2018 final rule. This methodology reflects the mature status of this industry, the large number of facilities registered to generate cellulosic biofuel RINs from these fuels, and EPA's continued attempts to refine its methodology to yield estimates that are as accurate as possible. This methodology is an improvement on the methodology that EPA used to project cellulosic biofuel production for CNG/LNG derived from biogas in the 2017 and previous years. The methodologies used to project the production of liquid cellulosic biofuels and cellulosic CNG/LNG derived from biogas are described in more detail in Sections III.C-1 and III.C-2 below.
After a brief description of the statutory requirements in Section III.A, we discuss the companies the EPA reviewed in the process of projecting qualifying cellulosic biofuel production in the U.S. in 2018 in Section III.B. Section III.C discusses the methodologies used by EPA to project cellulosic biofuel production in 2019 and the resulting projection of 381 million ethanol-equivalent gallons.
CAA section 211(o)(2)(B)(i)(III) states the statutory volume targets for cellulosic biofuel. The volume of cellulosic biofuel specified in the statute for 2019 is 8.5 billion gallons. The statute provides that if EPA determines, based on a letter provided to the EPA by EIA, that the projected volume of cellulosic biofuel production in a given year is less than the statutory volume, then EPA shall reduce the applicable volume of cellulosic biofuel to the projected volume available during that calendar year.
In addition, if EPA reduces the required volume of cellulosic biofuel below the level specified in the statute, we may reduce the applicable volumes of advanced biofuels and total renewable fuel by the same or a lesser volume,
In order to project liquid cellulosic biofuel production for 2019 we have tracked the progress of a number of potential cellulosic biofuel production facilities, located both in the U.S. and in foreign countries. As we have done in previous years, we have focused on facilities with the potential to produce commercial-scale volumes of cellulosic biofuel rather than small research and development (R&D) or pilot-scale facilities. Larger commercial-scale facilities are much more likely to
From this list of commercial-scale facilities capable of producing liquid cellulosic biofuel, we used information from EMTS, the registration status of potential biofuel production facilities as cellulosic biofuel producers in the RFS program, publicly available information (including press releases and news reports), and information provided by representatives of potential cellulosic biofuel producers, to make a determination of which facilities are most likely to produce liquid cellulosic biofuel and generate cellulosic biofuel RINs in 2019. Each of these companies was investigated further in order to determine the current status of its facilities and its likely cellulosic biofuel production and RIN generation volumes for 2019. Both in our discussions with representatives of individual companies and as part of our internal evaluation process we gathered and analyzed information including, but not limited to, the funding status of these facilities, current status of the production technologies, anticipated construction and production ramp-up periods, facility registration status, and annual fuel production and RIN generation targets.
As an initial matter, it is useful to review the accuracy of EPA's past cellulosic biofuel projections. EPA used a consistent methodology to project cellulosic biofuel production in the final three months of 2015 and all of 2016 and 2017.
EPA's projections of liquid cellulosic biofuel were higher than the actual volume of liquid cellulosic biofuel produced in 2015-2017. As a result of these over-projections, and in an effort to take into account the most recent data available and make the liquid cellulosic biofuel projections more accurate, EPA adjusted our methodology in the 2018 final rule.
We next turn to the projection of CNG/LNG derived from biogas. For 2018, EPA used for the first time an industry-wide approach, rather than an approach that projects volumes for individual companies or facilities, to project the production of CNG/LNG derived from biogas. This updated approach reflects the fact that this industry is far more mature than the liquid cellulosic biofuel industry, and that there are a large number of facilities registered to generate cellulosic biofuel RINs from biogas, rendering a facility-by-facility analysis difficult and unnecessary for purposes of accuracy. As described in Section III.C.2 below, EPA is again proposing to project production of CNG/LNG derived from biogas by calculating a year-over-year rate of growth in the renewable CNG/LNG industry by comparing RIN generation for CNG/LNG derived from biogas from April 2016-March 2017 to the RIN generation for these same fuels from April 2017-March 2018 (the most recent month for which data are available). We then apply this year-over-year growth rate to the total number of cellulosic RINs available for compliance from CNG/LNG in 2017 (the most recent year for which complete data are available), to estimate the production of CNG/LNG derived from biogas in 2019.
The remainder of this section describes in more detail the methodology EPA is using to project cellulosic biofuel production in 2019 (including a review of cellulosic biofuel production and the accuracy of the projection methodology in previous years).
There are several companies and facilities
In addition to the potential sources of cellulosic biofuel located in the U.S., there are several foreign cellulosic biofuel companies that may produce cellulosic biofuel in 2019. These include facilities owned and operated by Beta Renewables, Enerkem, Ensyn, GranBio, and Raizen. All of these facilities use fuel production pathways that have been approved by EPA for cellulosic RIN generation provided eligible sources of renewable feedstock are used and other regulatory requirements are satisfied. These companies would therefore be eligible to register their facilities under the RFS program and generate RINs for any qualifying fuel imported into the U.S. While these facilities may be able to generate RINs for any volumes of cellulosic biofuel they import into the U.S., demand for the cellulosic biofuels they produce is expected to be high in their own local markets.
In addition to projecting the domestic production of cellulosic biofuel, EPA also projects the volume of cellulosic biofuel that will be imported into the U.S.
Cellulosic biofuel produced at three foreign facilities (Ensyn's Renfrew facility, GranBio's Brazilian facility, and Raizen's Brazilian facility) generated cellulosic biofuel RINs for fuel exported to the U.S. in 2017; projected volumes from each of these facilities are included in our projection of available volumes for 2019. EPA has also included projected volume from two additional foreign facilities. One of these facilities has completed the registration process as a cellulosic biofuel producer (Enerkem's Canadian facility). The other facility (Ensyn's Port-Cartier, Quebec facility), while not yet registered as a cellulosic biofuel producer, is owned by a Ensyn, a company that has previously generated cellulosic biofuel RINs using the same technology at a different facility. We believe that it is appropriate to include volume from these facilities in light of their proximity to the U.S., the proven technology used by these facilities, the volumes of cellulosic biofuel exported to the U.S. by the company in previous years (in the case of Ensyn), and the company's stated intentions to market fuel produced at these facilities to qualifying markets in the U.S. All of the facilities included in EPA's cellulosic biofuel projection for 2019 are listed in Table III.B.3-1 below.
General information on each of the cellulosic biofuel producers (or group of producers in the case of producers of CNG/LNG derived from biogas and liquid cellulosic biofuel facilities using Edeniq's technology) that factored into our projection of cellulosic biofuel production for 2019 is shown in Table III.B.3-1. This table includes both facilities that have already generated cellulosic RINs, as well as those that have not yet generated cellulosic RINs, but are projected to do so by the end of 2019. As discussed above, we have focused on commercial-scale cellulosic biofuel production facilities. Each of these facilities (or group of facilities) is discussed further in a memorandum to the docket.
For our 2019 liquid cellulosic biofuel projection, we use the same general approach as we have in projecting these volumes in previous years. We begin by first categorizing potential liquid cellulosic biofuel producers in 2019 according to whether or not they have achieved consistent commercial scale production of cellulosic biofuel to date. Next we define a range of likely production volumes for 2019 for each group of companies. Finally, we use a percentile value to project from the established range a single projected production volume for each group of companies in 2019. As in 2018, we are proposing to calculate percentile values for each group of companies based on the past performance of each group relative to our projected production ranges. This methodology is briefly described here, and is described in detail in memoranda to the docket.
Consistent with our approach in previous years, we separated the list of potential producers of cellulosic biofuel (listed in Table III.B.3-1) into two groups according to whether the facilities have achieved consistent commercial-scale production and cellulosic biofuel RIN generation. We next defined a range of likely production volumes for each group of potential cellulosic biofuel producers. The low end of the range for each group of producers reflects actual RIN generation data over the last 12 months for which data are available at the time our technical assessment was completed (April 2017-March 2018).
After defining likely production ranges for each group of companies we next considered the percentile values to use in projecting a production volume for each group of companies. In this proposed rule we have calculated the percentile values used to project liquid cellulosic biofuel production from within the range of projected production values, using data on actual liquid cellulosic biofuel production from both 2016 and 2017. This is consistent with the approach taken in the 2018 final rule, however we now have complete data from 2017, rather than only data through September 2017. For the final rule we anticipate using available production data from 2018 to make further adjustments to the percentile values used to project liquid cellulosic biofuel production for 2019.
The projected ranges for liquid cellulosic biofuel production in 2016 and 2017, along with the actual number of cellulosic RINs generated in each year that are/were available for compliance, and the percentile values that would have resulted in a projection equal to the actual production volume are shown in Table III.C.1-3 below.
For
Finally, we used these percentile values, together with the ranges determined for each group of companies discussed above, to project a volume for each group of companies in 2019. These calculations are summarized in Table III.C.1-4 below.
EPA also considered whether it would be appropriate to modify other individual components of the past methodology for projecting liquid cellulosic biofuel (such as the factors used to calculate the high or low end of the projected range for each company), but we do not believe that such changes are warranted at this time. Making the adjustment to the percentile values used in the methodology while keeping other components of the methodology constant should, we believe, provide an appropriate refinement of the methodology that reflects recent experience. We acknowledge, however, that using the calculated percentile values from previous years to project liquid cellulosic biofuel production in future years does not eliminate the possibility that actual production will differ from our projections. This is especially true for the liquid cellulosic biofuel industry, which is currently in the early stages of commercialization. Nevertheless, based on the record before us, we believe the ranges of projected production volumes for each company (or group of companies for those using the Edeniq technology) are reasonable, and that projecting overall production in 2019 in the manner described above results in a neutral estimate (neither biased to produce a projection that is too high or too low) of likely liquid cellulosic biofuel production in 2019 (24 million gallons).
For 2019, EPA is using the same methodology as in the 2018 final rule, an industry wide projected based on a year-over-year growth rate, to project production of CNG/LNG derived from biogas used as transportation fuel.
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EPA has also reviewed data submitted by potential producers of CNG/LNG derived from biogas that is used as transportation fuel. The total volume of CNG/LNG derived from biogas projected to be produced in 2019 by the potential producers of these fuels exceeds the volume that EPA is projecting for 2019. Since producers of CNG/LNG derived from biogas have historically over-estimated their production of these fuels, it would not be appropriate to simply adopt this projection for 2019. The fact that the industry projections exceed EPA's projected volume, however, indicates that the volume of these fuels projected for 2019 can be satisfied by a combination of projects currently producing CNG/LNG derived from biogas for these purposes and projects expected to product biogas by the end of 2019.
We believe that while our projection methodology uses a growth rate based on historical data it adequately anticipates higher production volumes in future years, including both increased production from existing facilities as well as production from new facilities. In this way it satisfies our charge to project future cellulosic biofuel production in a reasonable manner, and with neutrality, despite the fact that it does not consider all potential producers of these fuels on a facility-by-facility basis. For the final rule we anticipate using all available data from 2018 to update both the year-over-year increase as well as the projected production volume of cellulosic biofuel for 2018 to which we apply the year-over-year increase to project the production of CNG/LNG derived from biogas in 2019.
After projecting production of cellulosic biofuel from liquid cellulosic biofuel production facilities and producers of CNG/LNG derived from biogas, EPA combined these projections to project total cellulosic biofuel production for 2019. These projections are shown in Table III.C.3-1. Using the methodologies described in this section, we project that 381 million ethanol-equivalent gallons of cellulosic biofuel will be produced in 2019. We believe that projecting overall production in 2019 in the manner described above results in a neutral estimate (neither biased to produce a projection that is too high nor too low) of likely cellulosic biofuel production in 2019.
Further discussion of the individual companies we believe will produce cellulosic biofuel and make it commercially available in 2019 can be found in a memorandum to the docket.
The national volume targets for advanced biofuel and total renewable fuel to be used under the RFS program each year through 2022 are specified in CAA section 211(o)(2)(B)(i)(I) and (II).
Due to a shortfall in reasonably attainable volumes of cellulosic and advanced biofuel, and consistent with our long-held interpretation of the cellulosic waiver authority as best interpreted and applied by providing equal reductions in advanced biofuel and total renewable fuel, we are proposing a reduction from the statutory volumes for both advanced biofuel and total renewable fuel for 2019 using the full extent of the cellulosic waiver authority.
In this Section we discuss our proposed use of the discretion afforded by the cellulosic waiver authority at CAA 211(o)(7)(D)(i) to reduce volumes of advanced biofuel and total renewable fuel. We first discuss our assessment of advanced biofuel and the considerations which have led us to conclude that the advanced biofuel volume target in the statute should be reduced by the full amount permitted under the cellulosic waiver authority. We then address total renewable fuel in the context of our interpretation, articulated in previous annual rulemakings, that advanced biofuel and total renewable fuel should be reduced by the same amount under the cellulosic waiver authority.
To begin, we have evaluated the capabilities of the market and are proposing to find that the 13.0 billion gallons specified in the statute for advanced biofuel cannot be reached in 2019. This is primarily due to the expected continued shortfall in cellulosic biofuel; production of this fuel type has consistently fallen short of the statutory targets by 95 percent or more, and as described in Section III, we project that it will fall far short of the statutory target of 8.5 billion gallons in 2019. For this and other reasons described in this section we are proposing to reduce the advanced biofuel statutory target by the full amount of the shortfall in cellulosic biofuel for 2019.
In previous years when we have used the cellulosic waiver authority, we have determined the appropriate amount of the permissible waiver to apply to advanced biofuel by taking into account the availability of advanced biofuels, their energy security and GHG impacts, the availability of carryover RINs, the apparent intent of Congress as reflected in the statutory volumes tables to substantially increase the use of advanced biofuels over time, as well as factors such as increased costs associated with the use of advanced biofuels and the reduced benefits likely associated with use of advanced volumes achieved through diversion of foreign fuels or substitution of advanced feedstocks from other uses to biofuel production. Until the 2018 standards rule, the consideration of these factors led us to conclude that it was appropriate to set the advanced biofuel standard in a manner that would allow the partial backfilling of missing cellulosic volumes with non-cellulosic advanced biofuels.
Although we continue to believe that the factors earlier considered in exercising the cellulosic waiver authority are relevant and appropriate, we project that there will be insufficient reasonably attainable volumes of non-cellulosic biofuels in 2019 to allow any backfilling for missing volumes of cellulosic biofuel. As a result of this projection and our proposed consideration of carryover RINs, we are proposing to reduce the statutory volume target for advanced biofuel by the same amount as the reduction in cellulosic biofuel. This would result in the non-cellulosic component of the advanced biofuel volume requirement being equal to the implied statutory volume of 4.5 billion gallons in 2019.
We note that the predominant non-cellulosic advanced biofuels available in the near term are advanced biodiesel and renewable diesel.
Furthermore, two other factors have added uncertainty regarding the volume of advanced biofuels that we project to be attainable in 2019. The first is the fact that the tax credit for biodiesel has not been renewed for 2019. The second is the final determination by the Department of Commerce that tariffs should be imposed on biodiesel imports from Argentina and Indonesia, and the potential for those tariffs to increase.
We believe that the factors and considerations noted above are all appropriate to consider under the broad discretion provided under the cellulosic waiver authority, and that consideration of these factors supports our proposed use of this authority. Many of the considerations discussed in this proposed rule are related to the availability of non-cellulosic advanced biofuels (
The impact of our exercise of the cellulosic waiver authority is that after waiving the cellulosic biofuel volume down to the projected available level, and applying the same volume reduction to the statutory volume target for advanced biofuel, the resulting volume requirement for advanced biofuel for 2019 would be 590 million gallons more than the applicable volume used to derive the 2018 percentage standard. Furthermore, after applying the same reduction to the statutory volume target for total renewable fuel, the volume requirement for total renewable fuel would also be 590 million gallons more than the applicable volume used to derive the 2018 percentage standard.
As described in Section II.A, when making reductions in advanced biofuel and total renewable fuel under the cellulosic waiver authority, the statute limits those reductions to no more than the reduction in cellulosic biofuel. As described in Section III.D, we are proposing to establish a 2019 applicable volume for cellulosic biofuel of 381 million gallons, representing a reduction of 8,119 million gallons from the statutory target of 8,500 million gallons. As a result, 8,119 million gallons is the maximum volume reduction for advanced biofuel and total renewable fuel that is permissible using the cellulosic waiver authority. Use of the cellulosic waiver authority to this maximum extent would result in volumes of 4.88 and 19.88 billion gallons for advanced biofuel and total renewable fuel, respectively.
We are authorized under the cellulosic waiver authority to reduce the advanced biofuel and total renewable fuel volumes “by the same or a lesser” amount as the reduction in the cellulosic biofuel volume.
We have considered both reasonably attainable and attainable volumes of advanced biofuel to inform our exercise of the cellulosic waiver authority. Volumes described as “reasonably attainable” are those that can be reached without market disruptions and/or higher costs, such as those that could result from diverting advanced biofuels or advanced biofuel feedstocks from existing uses. We use this phrase in today's action in the same way that we
As in prior rulemakings, EPA has considered what volumes of advanced biofuels are reasonably attainable. As the Court noted in
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As noted above, a higher advanced biofuel volume requirement has a greater potential to increase the incentive for switching advanced biofuel feedstocks from existing uses to biofuel production. We are proposing to set the advanced biofuel volume requirement at a level that would seek to minimize such feedstock/fuel diversions. Our individual assessments of reasonably attainable volumes of each type of advanced biofuel reflects this approach. That is, while we refer to them as “reasonably attainable” volumes for convenience, they represent those volumes that are not likely to lead to feedstock/fuel diversions. Greater volumes could likely be made available if such diversions were not of concern.
EPA proposes to find that 100 million gallons of advanced ethanol, 60 million gallons of other advanced biofuels, and 2.65 billion gallons of advanced biodiesel and renewable diesel are reasonably attainable. Together with our projected volume of 381 million gallons of cellulosic biofuel, the sum of these volumes falls short of 4.88 billion gallons, which is the lowest advanced biofuel requirement that EPA can determine under the cellulosic waiver authority.
Therefore, we also have considered whether the market can nonetheless make available 4.88 billion gallons of advanced biofuel, notwithstanding likely feedstock/fuel diversions. In particular, we assess whether additional volumes of advanced biodiesel and renewable diesel are attainable. We conclude that 2.8 billion gallons of advanced biodiesel and renewable diesel is likely attainable notwithstanding likely feedstock/fuel diversions. This quantity of advanced biodiesel and renewable diesel, together with the cellulosic biofuel, sugarcane ethanol, and other advanced biofuels described above, would enable the market to make available 4.88 billion gallons of advanced biofuels.
The predominant available source of advanced biofuel other than cellulosic biofuel and BBD is imported sugarcane ethanol. In setting the 2018 standards, we estimated that 100 million gallons of imported sugarcane ethanol would be reasonably attainable.
During 2017 when we were developing the 2018 standards rulemaking, we used available data from a portion of 2017 to estimate that import volumes of sugarcane ethanol were likely to fall significantly below the 200 million gallons we had assumed when we set the 2017 standards. Import data for most of 2017 is now available, and indicates that imports of sugarcane ethanol reached just 77 million gallons.
While it is difficult to predict imports for 2019, we believe it would be reasonable not to increase the assumed volume above 100 million gallons for purposes of determining whether an advanced biofuel volume requirement of 4.88 billion gallons is reasonably attainable for 2019. Although imports of advanced ethanol have been below 100 million gallons for 2014-2017, our proposed advanced biofuel volume requirement for 2019 would be higher than that for 2018, creating some incentive for increases in imports. However, the E10 blendwall and the fact that imported sugarcane ethanol typically costs more than corn ethanol create disincentives for increasing imports above the levels in recent years. Taking all of these considerations into account, we propose using 100 million gallons of imported sugarcane ethanol for the purposes of projecting reasonably attainable volumes of advanced biofuel for 2019. This level reflects a balancing of the information available to EPA at this time; both the lower import volumes that have occurred more recently with the higher volumes that are possible based on earlier years and under the influence of the higher standards in 2019.
We note that the future projection of imports of sugarcane ethanol is inherently imprecise, and that actual imports in 2019 could be lower or higher than 100 million gallons. Factors that could result in import volumes below 100 million gallons include weather and harvests in Brazil, world ethanol demand and prices, constraints associated with the E10 blendwall in the U.S., and the cost relative to that of corn ethanol. Also, global sugar consumption has continued to increase steadily, while global production has decreased.
In addition to cellulosic biofuel, imported sugarcane ethanol, and advanced biodiesel and renewable diesel, there are other D5 advanced biofuels that can be counted in the determination of reasonably attainable volumes of advanced biofuel for 2019. These other D5 advanced biofuels include non-cellulosic CNG, naphtha, heating oil, and domestically-produced advanced ethanol. However, the supply of these fuels has been relatively low in the last several years.
The downward trend over time in CNG/LNG from biogas as advanced biofuel with a D code of 5 is due to the re-categorization in 2014 of landfill biogas from advanced (D code 5) to cellulosic (D code 3).
We recognize that the potential exists for additional volumes of advanced biofuel from sources such as jet fuel, liquefied petroleum gas (LPG), butanol, and liquefied natural gas (as distinct from compressed natural gas), as well as non-cellulosic CNG from biogas produced in digesters. However, since they have been produced, if at all, in only de minimis and sporadic amounts in the past, we do not have a basis for projecting substantial volumes from these sources in 2019.
Having projected the production volume of cellulosic biofuel, and the reasonably attainable volumes of imported sugarcane ethanol and “other” advanced biofuels, we next calculated the volume of advanced biodiesel and renewable diesel that would need to be supplied to meet the volume of advanced biofuel for 2019 after reducing the advanced biofuel volume by the same amount as the cellulosic biofuel volume. Based on our projections of other advanced biofuels presented in the preceding sections, the market would need to supply 2.8 billion gallons of biodiesel and renewable diesel, generating 4.34 billion RINs, to meet a total advanced biofuel volume of 4.88 billion gallons. This calculation is shown in Table IV.B.3-1 below.
Calculating the volume of advanced biodiesel and renewable diesel that would be needed to meet the volume of advanced biofuel for 2019 is an important benchmark to help inform EPA's consideration of our waiver authorities. In situations where the reasonably attainable volume of biodiesel and renewable diesel exceeds the volume of these fuels that would be needed to meet the volume of advanced biofuel after reducing the advanced biofuel volume by the same amount as the cellulosic biofuel volume, as was the case in 2017 and 2018, EPA may consider whether or not to allow additional volumes of these fuels to backfill for missing cellulosic biofuel volumes. In situations where the reasonably attainable volume of biodiesel and renewable diesel is less than the volume of these fuels that would be needed to meet the volume of advanced biofuel after reducing the advanced biofuel volume by the same amount as the cellulosic biofuel volume, EPA may consider whether or not to use additional waiver authorities, to the extent available, to make further reductions to the advanced biofuel volume.
Having calculated the volume of advanced biodiesel and renewable diesel that would need to be supplied to meet the volume of advanced biofuel for 2019 after reducing the advanced biofuel volume by the same amount as the cellulosic biofuel volume, EPA next projected the reasonably attainable volume of these fuels for 2019. With regard to advanced biodiesel and renewable diesel, there are many different factors that could potentially influence the reasonably attainable volume of these fuels used as transportation fuel or heating oil in the U.S. These factors could include the availability of qualifying biodiesel and renewable diesel feedstocks, the production capacity of biodiesel and renewable diesel facilities (both in the U.S. and internationally), and the availability of imported volumes of these fuels.
In addition to a review of the volumes of advanced biodiesel and renewable diesel used in previous years, we believe the likely growth in production of feedstocks used to produce these fuels, as well as the total projected available volumes of these feedstocks, are important factors to consider. This is because while there are many factors that could potentially limit the production and availability of these fuels, the impacts of increasing production of advanced biodiesel and renewable diesel on factors such as costs, energy security, and GHG emissions are expected to vary depending on whether the feedstocks used to produce these fuels are sourced from increased production of advanced feedstocks or alternatively from diverting these feedstocks from existing uses. The energy security and GHG reduction value associated with the growth in the use of advanced biofuels is greater when that growth is associated with an increase in advanced feedstock production, rather than a switching of existing advanced feedstocks from other uses to renewable fuel production or the diversion of advanced biodiesel and renewable diesel from foreign markets. This is especially true if the parties that previously used the advanced biofuel or feedstocks replace these oils with low cost palm or petroleum derived products, as we believe would likely be the case in 2019.
Before considering the projected growth in the production of qualifying feedstocks that could be used to produce advanced biodiesel and renewable diesel, as well as the total volume of feedstocks that could be used to produce these fuels, it is helpful to review the volumes of biodiesel and renewable diesel that have been used in the U.S. in recent years. While historic data and trends alone are insufficient to project the volumes of biodiesel and renewable diesel that could be provided in future years, historic data can serve as a useful reference in considering future volumes. Past experience suggests that a high percentage of the biodiesel and renewable diesel used in the U.S. (from both domestic production and imports) qualifies as advanced biofuel.
Since 2011 the year-over-year changes in the volume of advanced biodiesel and renewable diesel used in the U.S. have varied greatly, from a low of negative 127 million gallons from 2016 to 2017 to a high of 779 million gallons from 2015 to 2016. These changes were likely influenced by multiple factors such as the cost of biodiesel feedstocks and petroleum diesel, the status of the biodiesel blenders tax credit, growth in marketing of biodiesel at high volume truck stops and centrally fueled fleet locations, demand for biodiesel and renewable diesel in other countries, biofuel policies in both the U.S. and foreign countries, and the volumes of renewable fuels (particularly advanced biofuels) required by the RFS. This historical information does not indicate that the maximum previously observed increase of 779 million gallons of advanced biodiesel and renewable diesel would be reasonable to expect from 2018 to 2019, nor does it indicate that the low (or negative) growth rates observed in other years would recur in 2019. Rather, these data illustrate both the magnitude of the increases in advanced biodiesel and renewable diesel in previous years and the significant variability in these increases.
The historic data indicates that the biodiesel tax policy in the U.S. can have a significant impact on the volume of biodiesel and renewable diesel used in the U.S. in any given year. While the biodiesel blenders tax credit has applied in each year from 2010—2017, it has only been prospectively in effect during the calendar year in 2011, 2013 and 2016, while other years it has been applied retroactively. The biodiesel blenders tax credit expired at the end of 2009 and was re-instated in December 2010 to apply retroactively in 2010 and extend through the end of 2011. Similarly, after expiring at the end of 2011, 2013, and 2014 the tax credit was re-instated in January 2013 (for 2012 and 2013), December 2014 (for 2014), December 2015 (for 2015 and 2016), and February 2018 (for 2017). Each of the years in which the biodiesel blenders tax credit was in effect during the calendar year (2013 and 2016) resulted in significant increases in the volume of advanced biodiesel and renewable diesel used in the U.S. over the previous year (653 million gallons and 779 million gallons respectively). However, following these large increases in 2013 and 2016, there was little to no growth in the use of advanced biodiesel and renewable diesel in the following years, only 33 million gallons from 2013 to 2015 and negative 127 million gallons from 2016 to 2017. This decrease from 2016 to 2017 happened despite the fact that the required volume of advanced biofuel increased from 3.61 in 2016 to 4.28 billion gallons in 2017. This pattern is likely the result of both accelerated production and/or importation of biodiesel and renewable diesel in the final few months of years during which the tax credit was available to take advantage of the expiring tax credit, as well as relatively lower volumes of biodiesel and renewable diesel production and import in 2014, 2015, and 2017 than would have occurred if the tax credit had been in place.
The historical data suggests that the supply of advanced biodiesel and renewable diesel could potentially increase from 2.33 billion gallons in 2017 to 2.8 billion gallons in 2019 (the projected volume needed to meet the advanced biofuel volume for 2019 after reducing the statutory advanced biofuel volume by the same amount as the cellulosic biofuel reduction). This would represent an average annual rate of growth of approximately 235 million gallons per year, slightly higher than the average increase in the volume of advanced biodiesel and renewable diesel used in the U.S. from 2011 through 2017 (218 million gallons per year) and significantly less the highest annual increase during this time (779 million gallons from 2015 to 2016).
After reviewing the historical volume of advanced biodiesel and renewable diesel used in the U.S. and considering the possible impact of the expiration of the biodiesel tax credit (discussed above), EPA next considers other factors that may impact the production, import, and use of advanced biodiesel and renewable diesel in 2019. The production capacity of registered advanced biodiesel and renewable diesel production facilities is highly unlikely to limit the production of these fuels, as the total production capacity for biodiesel and renewable diesel at registered facilities in the U.S. (4.1 billion gallons) exceeds the volume of these fuels that are projected to be
Conversely, the availability of advanced feedstocks that can be used to produce advanced biodiesel and renewable diesel and the projected availability of imported advanced biodiesel and renewable diesel may limit the volume of these fuels available to the U.S. in 2019. We acknowledge that an increase in the required use of advanced biodiesel and renewable diesel could be realized through a diversion of advanced feedstocks from other uses, or a diversion of advanced biodiesel and renewable diesel from existing markets in other countries, and that volume of advanced biodiesel and renewable diesel and advanced feedstocks produced globally exceeds the volume projected to be required in 2019 (2.8 billion gallons of advanced biodiesel and renewable diesel and the corresponding volume of advanced feedstocks) by a significant margin.
This is both because of the potential disruption and associated cost impacts to other industries resulting from feedstock switching, and the potential adverse effect on lifecycle GHG emissions associated with feedstocks for biofuel production that would have been used for other purposes and which must then be backfilled with other feedstocks. Similarly, increasing the supply of biodiesel and renewable diesel to the U.S. by diverting fuel that would otherwise have been used in other countries results in higher lifecycle GHG emissions than if the supply of these fuels was increased through additional biofuel production, especially if this diversion results in increased consumption of petroleum fuels in the countries that would have otherwise consumed the biodiesel or renewable diesel. By focusing our assessment of the potential growth in the attainable volume of biodiesel and renewable diesel on the expected growth in the production of advanced feedstocks (rather than the total supply of these feedstocks in 2018, which would include feedstocks currently being used for non-biofuel purposes), we are attempting to minimize the incentives for the RFS program to increase the supply of advanced biodiesel and renewable diesel through feedstock switching or diverting biodiesel and renewable diesel from foreign market to the U.S.
Advanced biodiesel and renewable diesel feedstocks include both waste oils, fats, and greases; and oils from planted crops. While we believe a small increase in supply of waste oils, fats, and greases may be possible in 2019, we believe this increase is limited as most of these waste oils, fats, and greases that can be recovered economically are already being recovered and used in biodiesel and renewable diesel production or for other purposes. Most of the vegetable oil used to produce advanced biodiesel and renewable diesel that is sourced from planted crops comes from crops primarily grown for purposes other than providing feedstocks for biodiesel and renewable diesel, such as for livestock feed with the oil that is used as feedstock for renewable fuel production a co-product or by-product.
We believe the most reliable source for projecting the expected increase in vegetable oils in the U.S. is USDA's World Agricultural Supply and Demand Estimates (WASDE). At the time of our assessment for this proposed rule, the most current version of the WASDE report only projects domestic vegetable oil production through 2018. Based on domestic vegetable oil production from 2011-2017 as reported by WASDE, the average annual increase in vegetable oil production in the U.S. was 0.278 million metric tons per year.
In addition to virgin vegetable oils, we also expect increasing volumes of distillers corn oil
While the vast majority of the increase in advanced biodiesel and renewable diesel feedstocks produced in the U.S. from 2018 to 2019 is expected to come from virgin vegetable oils and distillers corn oil, increases in the supply of other sources of advanced biodiesel and renewable diesel feedstocks, such as biogenic waste oils, fats, and greases, may also occur. These increases, however, are expected to be modest, as many of these feedstocks that can be recovered economically are already being used to produce biodiesel or renewable diesel, or in other markets. In fact, the WAEES model projects a decrease of 3 million gallons in the volume of biodiesel produced from feedstocks other than soybean oil, canola oil, and distillers corn oil from 2018 to 2019.
EPA's projections of the growth of advanced feedstocks does not, however, suggest that the total supply of advanced biodiesel and renewable diesel to the U.S. in 2018 will be limited to 2.65 billion gallons. Rather, this is the volume of these fuels that we project could be supplied without diverting significant quantities of advanced feedstocks or biofuels from existing uses. The March 2018 WASDE reports that production of vegetable oil in the U.S. in the 2017/2018 market year (the latest year for which projections are available) will be sufficient to produce approximately 3.3 billion gallons of biodiesel and renewable diesel (including both advanced and conventional biofuels) if the entire volume of vegetable oil was used to produce these fuels. Additional advanced biodiesel and renewable diesel could be produced from waste fats, oils, and greases. The global production of vegetable oil projected in the 2017/2018 marketing year would be sufficient to produce approximately 56.5 billion gallons of biodiesel and renewable diesel (including both advanced and conventional biofuels).
Further, the supply of advanced biodiesel and renewable diesel to the U.S. in 2019 could be increased by approximately 150 million gallons if all of the exported volumes of these fuels were used domestically. Diverting this fuel to markets in the U.S. may be complicated, however, as doing so would likely require higher prices for these fuels in the U.S. (to divert the fuels from foreign markets that are presumably more profitable currently). It may also be more difficult and costly to distribute this additional volume of biodiesel and renewable diesel to domestic markets than the current foreign markets. Finally, reducing advanced biodiesel and renewable diesel exports may indirectly result in the decreased availability of imported volumes of these fuels, as other countries seek to replace volumes previously imported from the U.S.
EPA next considered potential changes in the imports of advanced biodiesel and renewable diesel produced in other countries. In previous years, significant volumes of foreign produced advanced biodiesel and renewable diesel have been supplied to markets in the U.S. (see Table IV.B.2-1 above). These significant imports were likely the result of a strong U.S. demand for advanced biodiesel and renewable diesel, supported by the RFS standards, the LCFS in California, the biodiesel blenders tax credit, and the opportunity for imported biodiesel and renewable diesel to realize these incentives.
The RFS requirements and California's LCFS are expected to continue to provide an incentive for imports of advanced biodiesel and renewable diesel in 2019. Several other factors, however, may negatively impact the volume of these fuels imported in 2019. In February 2018 the biodiesel blenders tax credit, which had expired at the end of 2016, was retroactively reinstated for biodiesel blended in 2017 but was not extended to apply to biodiesel blended in 2018 or 2019.
Domestic production of advanced biodiesel and renewable diesel in 2016 and 2017 was approximately 1.85 billion gallons. Of this total, approximately 150 million gallons of domestically produced biodiesel was exported in 2016 and 2017. An additional 100 to150 million gallons of these fuels were imported from countries unaffected by the recent tariffs. If, by 2019, alternative sources of imported biodiesel and renewable diesel are identified and the imported volume of advanced biodiesel and renewable diesel returns to the levels observed in 2016 and 2017 (approximately 700 million gallons per year) domestic production would need to increase by approximately 125 million gallons per year in both 2018 and 2019 to reach a total advanced biodiesel and renewable diesel supply of 2.8 billion gallons by 2019.
After a careful consideration of the factors discussed above, EPA has determined that 2.8 billion gallons of advanced biodiesel and renewable diesel projected needed to satisfy the implied statutory volume for non-cellulosic advanced biofuel in 2019 (4.5 billion gallons) are attainable. The total production capacity of registered biodiesel and renewable diesel producers is significantly higher than 2.8 billion gallons, even if only those facilities that generated RINs for advanced biodiesel and renewable diesel in 2017 are considered. This volume (2.8 billion gallons) is also not significantly higher than the total volume of biodiesel and renewable diesel supplied in 2016 (approximately 2.6 billion gallons), strongly suggesting that production capacity and the ability to distribute and use biodiesel and renewable diesel will not limit the supply of advanced biodiesel and renewable diesel to a volume below 2.8 billion gallons in 2018. Sufficient feedstocks are expected to be available to produce this volume of advanced biodiesel and renewable diesel in 2019, however doing so may result in some level of diversion of advanced feedstocks and/or advanced biodiesel and renewable diesel from existing uses. Achieving this level of advanced biodiesel and renewable diesel in 2019, however, will likely require finding alternative sources for biodiesel imports to replace the volume of biodiesel and renewable diesel that were supplied from Argentina and Indonesia in 2016 and 2017. Alternatively, obligated parties could rely on the significant volume of carryover advanced RINs projected to be available in 2019 (See Section II.B for a further discussion of carryover RINs).
In exercising the cellulosic waiver authority for 2017 and earlier, we determined it was appropriate to require a partial backfilling of missing cellulosic volumes with volumes of non-cellulosic advanced biofuel we determined to be reasonably attainable, notwithstanding the increase in costs associated with those decisions.
Based on the information presented above, we believe that 4.88 billion gallons of advanced biofuel is attainable in 2019. After a consideration of the projected volume of cellulosic biofuel and reasonably attainable volumes of imported sugarcane ethanol and other advanced biofuels, we determined that 2.8 billion gallons of advanced biodiesel and renewable diesel would be needed to reach 4.88 billion gallons of advanced biofuel. Based on a review of the factors relevant to the supply of advanced biodiesel and renewable diesel as discussed in Section IV.B.2 above, including historic production and import data, the production capacity of registered biodiesel and renewable diesel producers, and the availability of advanced feedstocks, we have determined that 2.8 billion gallons of BBD is attainable in 2019.
However, we also acknowledge that 2.8 billion gallons of BBD is
The carryover RIN bank has continued to grow over the past several years as described in Section II.B, and is currently at its largest historical level. It represents a source of RINs that could help obligated parties meet an advanced biofuel volume requirement of 4.88 billion gallons in 2019 if the market fails to supply sufficient advanced biofuels in 2019. If the market does choose to meet a volume requirement of 4.88 billion gallons in this way, it would be for the first time in the history of the RFS program. Although we did point to the carryover RIN bank in 2013, along with the potential for additional volumes of E85, as a means for meeting the statutory volume requirement of 16.55 billion gallons, in that case the concern was the portion of the standard that is not required to be advanced biofuel (
Although we believe that the 2.8 billion gallon volume is attainable, and any shortfalls could be met through the use of carryover RINs, we also solicit comment and supporting data and rationale on whether circumstances exist that would warrant further reductions in volumes through the exercise of the general waiver authority (
It should be noted that by exercising the full cellulosic waiver authority for advanced biofuel, the implied statutory volume target for non-cellulosic advanced biofuel of 4.5 billion gallons in 2019 would be maintained. This represents an increase of 0.5 billion gallons from the 2018 volume requirements.
As discussed in Section II.A.1, we believe that the cellulosic waiver provision is best interpreted to provide equal reductions in advanced biofuel and total renewable fuel. We have consistently articulated this interpretation.
This volume of total renewable fuel results in an implied volume of 15 billion gallons of conventional fuel, which is the same as in the 2018 final rule.
In this section, EPA presents its assessment of the illustrative costs of the proposed 2019 RFS rule. It is important to note that these illustrative costs do not attempt to capture the full impacts of this proposed rule. We frame the analyses we have performed for this proposed rule as “illustrative” so as not to give the impression of comprehensive estimates. These estimates are provided for the purpose of showing how the cost to produce a gallon of a “representative” renewable fuel compares to the cost of petroleum fuel. There are a significant number of caveats that must be considered when interpreting these illustrative cost estimates. For example, there are many different feedstocks that could be used to produce biofuels, and there is a significant amount of heterogeneity in the costs associated with these different feedstocks and fuels. Some renewable fuels may be cost competitive with the petroleum fuel they replace; however, we do not have cost data on every type of feedstock and every type of fuel. Therefore, we do not attempt to capture this range of potential costs in our illustrative estimates.
Illustrative cost estimates are provided below for the proposal discussed in Sections III and IV that reduces the cellulosic, advanced, and total renewable fuel volume requirements using the cellulosic waiver authority under CAA section 211(o)(7)(D)(i). For this proposal, we examine two different cases. In the first case, we provide illustrative cost estimates by comparing the proposed 2019 renewable fuel volumes to 2019 statutory volumes under CAA section 211(o)(7)(D)(i). In the second case, we examine the proposed 2019 renewable fuel volumes to the final 2018 renewable fuel volumes to estimate changes in the annual costs of the proposed 2019 RFS volumes in comparison to the 2018 volumes.
In this section, EPA provides illustrative cost estimates that compare
While there may be growth in other cellulosic renewable fuel sources, we believe it is appropriate to use cellulosic ethanol produced from corn kernel fiber as the representative cellulosic renewable fuel. The majority of liquid cellulosic biofuel in 2019 is expected to be produced using this technology, and application of this technology in the future could result in significant incremental volumes of cellulosic biofuel. In addition, as explained in Section III, we believe that production of the major alternative cellulosic biofuel—CNG/LNG derived from biogas—is limited to approximately 630 million gallons due to a limitation in the number of vehicles capable of using this form of fuel.
EPA uses a “bottom-up” engineering cost analysis to quantify the costs of producing a gallon of cellulosic ethanol derived from corn kernel fiber. There are multiple processes that could yield cellulosic ethanol from corn kernel fiber. EPA assumes a cellulosic ethanol production process that generates biofuel using distiller's grains, a co-product of generating corn starch ethanol that is commonly dried and sold into the feed market as distillers dried grains with solubles (DDGS), as the renewable biomass feedstock. We assume an enzymatic hydrolysis process with cellulosic enzymes to break down the cellulosic components of the distiller's grains. This process for generating cellulosic ethanol is similar to approaches currently used by industry to generate cellulosic ethanol at a commercial scale, and we believe these cost estimates are likely representative of the range of different technology options being developed to produce ethanol from corn kernel fiber. We then compare the per-gallon costs of the cellulosic ethanol to the petroleum fuels that would be replaced at the wholesale stage, since that is when the two are blended together.
These cost estimates do not consider taxes, retail margins, or other costs or transfers that occur at or after the point of blending (transfers are payments within society and are not additional costs). We do not attempt to estimate potential cost savings related to avoided infrastructure costs (
Table V.A-1 below presents the cellulosic fuel cost savings with this proposed rule that are estimated using this approach.
In
We anticipate that the increase in proposed 2019 cellulosic biofuel volumes would be composed of 10 million gallons of liquid cellulosic biofuel and 84 million gallons of CNG/LNG derived from landfill biogas.
For CNG/LNG-derived cellulosic biogas, we provide estimates of the cost of displacing natural gas with CNG/LNG derived from landfill biogas to produce 84 million ethanol-equivalent gallons of cellulosic fuel. To estimate the cost of production of CNG/LNG derived from landfill gas (LFG), EPA uses Version 3.2 of the Landfill Gas Energy Cost Model, or LFG cost-Web. EPA ran the financial cost calculator for projects with a design flow rate of 1,000 and 10,000 cubic feet per minute with the suggested default data and a project start year of 2019. The costs estimated for this analysis exclude any pipeline costs to transport the high BTU gas, as well as any costs associated with compressing the gas to CNG/LNG. These costs are not expected to differ significantly between LFG or natural gas. In addition, the cost estimates excluded the gas collection and control system infrastructure at the landfill, as EPA expects that landfills that begin producing high BTU gas in 2019 are very likely to already have this infrastructure in place.
To estimate the illustrative cost impacts of the change in CNG/LNG derived from LFG, we compared the cost of production of CNG/LNG derived from LFG in each case to the projected price for natural gas in 2019 in EIA's April 2018 STEO.
EPA provides a range of illustrative cost estimates for the increases in the advanced standard of 500 million ethanol-equivalent gallons using two different advanced biofuels. In the first scenario, we assume that all the increase in advanced biofuel volumes is comprised of soybean oil BBD. In the second scenario, we assume that all the increase in the advanced volume is comprised of sugarcane ethanol from Brazil.
Consistent with the analysis in previous annual RFS volume rules, a “bottom-up” engineering cost analysis is used that quantifies the costs of producing a gallon of soybean-based biodiesel and then compares that cost to the energy-equivalent gallon of petroleum-based diesel. We compare the cost of biodiesel and diesel fuel at the wholesale stage, since that is when the two are blended together and represents the approximate costs to society absent transfer payments and any additional infrastructure costs. On this basis, EPA estimates the costs of producing and transporting a gallon of biodiesel to the blender in the U.S.
To estimate the illustrative costs of sugarcane ethanol, we compare the cost of sugarcane ethanol and gasoline at the wholesale stage, since that is when the two are blended together and represents the approximate costs to society absent transfer payments and any additional infrastructure costs (
Table VI.B.2-1 below also presents estimates of per energy-equivalent gallon costs for producing: (1) Soybean biodiesel (in ethanol-equivalent gallons) and (2) Brazilian sugarcane ethanol, relative to the petroleum fuels they replace at the wholesale level. For each of the fuels, these per-gallon costs are then multiplied by the increase in the 2019 non-cellulosic advanced volume relative to the 2018 final advanced standard volume to obtain an overall cost increase of $380-$710 million. In addition, in Table V.B.2-1, we also present estimates of the total cost of this proposal relative to 2018 RFS fuel volumes. We add the increase in cost of the proposed 2019 cellulosic standard volume, $2.3-$32 million, with the additional costs of the increase in non-cellulosic advanced biofuel volumes resulting from the proposed 2019 advanced standard volume, $380-$710 million. The overall total costs of this proposal range from $380-$740 million.
The annual volume-setting process encourages consideration of the RFS program on a piecemeal (
In this section we discuss the proposed BBD applicable volume for 2020. We are proposing this volume in advance of those for other renewable fuel categories in light of the statutory requirement in CAA section 211(o)(2)(B)(ii) to establish the applicable volume of BBD for years after 2012 no later than 14 months before the applicable volume will apply. We are not at this time proposing the BBD percentage standards that would apply to obligated parties in 2020 but intend to do so in late 2019, after receiving EIA's estimate of gasoline and diesel consumption for 2020. Although the BBD applicable volume sets a floor for required BBD use, because the BBD volume requirement is nested within both the advanced biofuel and the total renewable fuel volume requirements, any BBD produced beyond the mandated 2020 BBD volume can be used to satisfy both of these other applicable volume requirements.
The statute establishes applicable volume targets for years through 2022 for cellulosic biofuel, advanced biofuel, and total renewable fuel. For BBD, applicable volume targets are specified in the statute only through 2012. For years after those for which volumes are specified in the statute, EPA is required under CAA section 211(o)(2)(B)(ii) to determine the applicable volume of BBD, in coordination with the Secretary of Energy and the Secretary of Agriculture, based on a review of the implementation of the program during calendar years for which the statute specifies the volumes and an analysis of the following factors:
1. The impact of the production and use of renewable fuels on the environment, including on air quality, climate change, conversion of wetlands, ecosystems, wildlife habitat, water quality, and water supply;
2. The impact of renewable fuels on the energy security of the United States;
3. The expected annual rate of future commercial production of renewable fuels, including advanced biofuels in each category (cellulosic biofuel and BBD);
4. The impact of renewable fuels on the infrastructure of the United States, including deliverability of materials, goods, and products other than renewable fuel, and the sufficiency of infrastructure to deliver and use renewable fuel;
5. The impact of the use of renewable fuels on the cost to consumers of transportation fuel and on the cost to transport goods; and
6. The impact of the use of renewable fuels on other factors, including job creation, the price and supply of agricultural commodities, rural economic development, and food prices.
The statute also specifies that the volume requirement for BBD cannot be less than the applicable volume specified in the statute for calendar year 2012, which is 1.0 billion gallons.
In establishing the BBD and cellulosic standards as nested within the advanced biofuel standard, Congress clearly intended to support development of BBD and especially cellulosic biofuels, while also providing an incentive for the growth of other non-specified types of advanced biofuels. In general, the advanced biofuel standard provides an opportunity for other advanced biofuels (advanced biofuels that do not qualify as cellulosic biofuel or BBD) to compete with cellulosic biofuel and BBD to satisfy the advanced biofuel standard after the cellulosic biofuel and BBD standards have been met.
One of the primary considerations in determining the BBD volume for 2020 is a review of the implementation of the program to date, as it affects BBD. This review is required by the CAA, and also provides insight into the capabilities of the industry to produce, import, export, and distribute BBD. It also helps us to understand what factors, beyond the BBD standard, may incentivize the production and import of BBD. Table VI.B.1-1 below shows, for 2011-2017, the number of BBD RINs generated, the number of RINs retired due to export, the number of RINs retired for reasons other than compliance with the annual BBD standards, the consequent number of available BBD RINs, and the BBD and
In
The prices paid for advanced biofuel and BBD RINs beginning in early 2013 through the March 2018 also support the conclusion that advanced biofuel and/or total renewable fuel standards provide a sufficient incentive for additional biodiesel volume beyond what is required by the BBD standard. Because the BBD standard is nested within the advanced biofuel and total renewable fuel standards, and therefore can help to satisfy three RVOs, we would expect the price of BBD RINs to exceed that of advanced and conventional renewable RINs.
When examining RIN price data from 2012 through March 2018, shown in Figure VI.B.2-1 below, we see that beginning in early 2013 and through March 2018 (the last month for which data are available) the advanced RIN price and BBD RIN prices were approximately equal. Similarly, from early 2013 through late 2016 the conventional renewable fuel and BBD RIN prices were approximately equal. This suggests that the advanced biofuel standard and/or total renewable fuel standard are capable of incentivizing increased BBD volumes beyond the BBD
In raising the 2013 BBD volume above the 1 billion gallon minimum mandated by Congress, the EPA sought to “create greater certainty for both producers of BBD and obligated parties” while also acknowledging that, “the potential for somewhat increased costs is appropriate in light of the additional certainty of GHG reductions and enhanced energy security provided by the advanced biofuel volume requirement of 2.75 billion gallons.”
The only advanced biofuel other than BBD available in appreciable quantities in 2012 and 2013 was advanced ethanol, the vast majority of which was imported sugarcane ethanol. EPA had significant concerns as to whether or not the supply of advanced ethanol could increase this significantly (750 million gallons) in a single year. These concerns were heightened by the approaching E10 blendwall, which had the potential to increase the challenges associated with supplying increasing volumes of ethanol to the U.S. If neither BBD volumes nor advanced ethanol volumes increased sufficiently, EPA was concerned that some obligated parties
In 2014 and 2015, EPA set the BBD and advanced standards at actual RIN generation, and thus the space between the advanced biofuel standard and the biodiesel standard was unlikely to provide an incentive for “other” advanced biofuels. EPA now has data on the amount of “other” advanced biofuels produced in 2016 and 2017 as shown in the table above. For 2016 and 2017, the gap between the BBD standard and the advanced biofuel provided an opportunity for “other” advanced biofuels to be generated to satisfy the advanced biofuel standard. While EPA allowed for up to 530 million and 969 million gallons of “other” advanced for 2016 and 2017 respectively, only 97 million and 144 million gallons of “other” advanced biofuels were generated. This is significantly less than the volumes of “other” advanced available in 2012-2013. Despite creating space within the advanced biofuel standard for “other” advanced, in recent years, that space has not been filled with significant volumes of “other” advanced and BBD continues to fill most of the gap between the BBD standard and the advanced standard.
Thus, while the advanced biofuel standard is sufficient to drive biodiesel volume separate and apart from the BBD standard, there would not appear to be a compelling reason to increase the “space” maintained for “other” advanced biofuel volumes. The overall volume of non-cellulosic advanced biofuel volume is proposed to increase by 500 million gallons for 2019. Increasing the BBD volume by the same amount would preserve the space already available for other advanced biofuels to compete.
At the same time, the rationale for preserving the “space” for “other” advanced biofuels remains. We note that the BBD industry in the U.S. and abroad has matured since EPA first increased the required volume of BBD beyond the statutory minimum in 2013. To assess the maturity of the biodiesel industry, EPA compared information on BBD RIN generation by company in 2012 and 2017 (the most recent year for which complete RIN generation by company is available). In 2012, the annual average RIN generation per company producing BBD was about 11 million RINs (about 7.3 million gallons) with approximately 50 percent of companies producing less the 1 million gallons of BBD a year.
We are conscious of public comments claiming that BBD volume requirements that are a significant portion of the advanced volume requirements effectively disincentivize the future development of other promising advanced biofuel pathways.
With the considerations discussed above in mind, as well as our analysis of the factors specified in the statute, we are proposing to set the applicable volume of BBD at 2.43 billion gallons for 2020. This increase, in conjunction with the statutory increase of 500 million gallons of non-cellulosic advanced biofuel in 2019, would continue to preserve a gap between the advanced biofuel volume and the sum of the cellulosic biofuel and BBD volumes. This would allow other advanced biofuels to continue to compete with excess volumes of BBD for market share under the advanced biofuel standard. We believe this volume sets the appropriate floor for BBD, and that the volume of advanced biodiesel and renewable diesel actually used in 2020 will be driven by the level of the advanced biofuel and total renewable fuel standards that the Agency will establish for 2020. It also recognizes that while maintaining an opportunity for other advanced biofuels is important, the vast majority of the advanced biofuel used to comply with the advanced biofuel standard in recent years has been BBD. Based on information now available from 2016 and 2017, despite providing a significant degree of space for “other” advanced biofuels, smaller volumes of “other” advanced have been utilized to meet the advanced standard. EPA believes that the BBD standard we are proposing to set today still provides sufficient incentive to producers of “other” advanced biofuels, while also acknowledging that the advanced standard has been met predominantly with biomass-based diesel. Our assessment of the required statutory factors, summarized in the next section and detailed in a memorandum to the docket (the “2020 BBD docket memorandum”), supports our proposal.
We believe this approach strikes the appropriate balance between providing a market environment where the development of other advanced biofuels is incentivized, while also maintaining support for the BBD industry. Based on our review of the data, and the nested nature of the BBD standard within the advanced standard, we conclude that the advanced standard continues to drive the ultimate volume of BBD supplied. However, given that BBD has been the predominant source of advanced biofuel in recent years and the 500 million gallon increase in non-cellulosic advanced biofuel we are proposing in this rule, we are proposing a volume of 2.43 billion gallons of BBD for 2020. Setting the BBD standard in this manner would preserve a considerable portion of the advanced biofuel volume that could be satisfied by either additional gallons of BBD or by other unspecified and potentially less costly types of qualifying advanced biofuels.
The BBD volume requirement is nested within the advanced biofuel requirement, and the advanced biofuel requirement is, in turn, nested within the total renewable fuel volume requirement.
Consistent with our approach in setting the final BBD volume requirement for 2019, EPA's primary assessment of the statutory factors for the 2020 BBD applicable volume is that because the BBD requirement is nested within the advanced biofuel volume requirement, we expect that the 2020 advanced volume requirement, when set next year, will determine the level of BBD production and imports that occur in 2020.
As an additional supplementary assessment, we have considered the potential impacts of selecting an applicable volume of BBD other than 2.43 billion gallons in 2020. Even if BBD volumes were to be impacted by the 2020 BBD standard (which as noted above we do not currently expect), setting a requirement higher or lower than 2.43 billion gallons in 2020 would only be expected to affect BBD volumes minimally, protecting to a greater or lesser degree BBD from competition with other potential advanced biofuels. In this supplementary assessment we have considered all of the statutory factors found in CAA section 211(o)(2)(B)(ii), and as described in the 2020 BBD docket memorandum, our assessment does not, based on available information, lead us to conclude that a higher or lower volume requirement for BBD than 2.43 billion gallons is more appropriate for 2020.
Overall and as described in the 2020 BBD docket memorandum, we have determined that both the primary assessment and the supplemental
The renewable fuel standards are expressed as volume percentages and are used by each obligated party to determine their Renewable Volume Obligations (RVOs). Since there are four separate standards under the RFS program, there are likewise four separate RVOs applicable to each obligated party. Each standard applies to the sum of all non-renewable gasoline and diesel produced or imported. The percentage standards are set so that if every obligated party meets the percentages by acquiring and retiring an appropriate number of RINs, then the amount of renewable fuel, cellulosic biofuel, BBD, and advanced biofuel used will meet the applicable volume requirements on a nationwide basis.
Sections II through V provide our rationale and basis for the proposed volume requirements for 2019.
For the purposes of converting these volumes into percentage standards, we generally use two decimal places to be consistent with the volume targets as given in the statute, and similarly two decimal places in the percentage standards. However, for cellulosic biofuel we use three decimal places in both the volume requirement and percentage standards to more precisely capture the smaller volume projections and the unique methodology that in some cases results in estimates of only a few million gallons for a single producer.
To calculate the percentage standards, we are following the same methodology for 2019 as we have in all prior years. The formulas used to calculate the percentage standards applicable to producers and importers of gasoline and diesel are provided in 40 CFR 80.1405. The formulas rely on estimates of the volumes of gasoline and diesel fuel, for both highway and nonroad uses, which are projected to be used in the year in which the standards will apply. The projected gasoline and diesel volumes are provided by EIA, and include projections of ethanol and biodiesel used in transportation fuel. Since the percentage standards apply only to the non-renewable gasoline and diesel produced or imported, the volumes of renewable fuel are subtracted out of the EIA projections of gasoline and diesel.
Transportation fuels other than gasoline or diesel, such as natural gas, propane, and electricity from fossil fuels, are not currently subject to the standards, and volumes of such fuels are not used in calculating the annual percentage standards. Since under the regulations the standards apply only to producers and importers of gasoline and diesel, these are the transportation fuels used to set the percentage standards, as well as to determine the annual volume obligations of an individual gasoline or diesel producer or importer under § 80.1407.
As specified in the RFS2 final rule,
In CAA section 211(o)(9), enacted as part of the Energy Policy Act of 2005, and amended by the Energy Independence and Security Act of 2007, Congress provided a temporary exemption to small refineries
EPA has granted exemptions pursuant to this process in the past. However, at this time no exemptions have been approved for 2019, and therefore we have calculated the percentage standards for 2019 without any adjustment for exempted volumes. EPA is maintaining its approach that any exemptions for 2019 that are granted after the final rule is released will not be reflected in the percentage standards that apply to all gasoline and diesel produced or imported in 2019. EPA is not soliciting comments on how small refinery exemptions are accounted for in the percentage standards formulas in 40 CFR 80.1405, and any such comments will be deemed beyond the scope of this rulemaking.
The formulas in 40 CFR 80.1405 for the calculation of the percentage standards require the specification of a total of 14 variables covering factors such as the renewable fuel volume requirements, projected gasoline and diesel demand for all states and territories where the RFS program applies, renewable fuels projected by EIA to be included in the gasoline and diesel demand, and exemptions for small refineries. The values of all the variables used for this final rule are shown in Table VII.C-1.
Projected
Using the volumes shown in Table VII.C-1, we have calculated the proposed percentage standards for 2019 as shown in Table VII.C-2.
We request comment on all aspects of this proposal. This section describes how you can participate in this process.
We are opening a formal comment period by publishing this document. We will accept comments during the period indicated under the
Your comments will be most useful if you include appropriate and detailed supporting rationale, data, and analysis. Commenters are especially encouraged to provide specific suggestions for any changes that they believe need to be made. You should send all comments, except those containing proprietary information, to our Docket (see
You may submit comments electronically through the electronic public docket,
EPA will also hold a public hearing on this proposed rule. We will announce the public hearing date and location for this proposal in a supplemental
Do not submit information that you consider to be CBI electronically through the electronic public docket,
In addition to one complete version of the comments that include any information claimed as CBI, a copy of the comments that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. This non-CBI version of your comments may be submitted electronically, by mail, or through hand delivery/courier. If you submit the copy that does not contain CBI on disk or CD ROM, mark the outside of the disk or CD ROM clearly that it does not contain CBI. Information not marked as CBI will be included in the public docket without prior notice. If you have any questions about CBI or the procedures for claiming CBI, please consult the person identified in the
This action is an economically significant regulatory action that was submitted to the Office of Management and Budget (OMB) for review. Any changes made in response to OMB recommendations have been documented in the docket. The EPA prepared an analysis of illustrative costs associated with this action. This analysis is presented in Section V of this preamble.
This action is expected to be an Executive Order 13771 regulatory action. Details on the estimated costs of this proposed rule can be found in EPA's analysis of the illustrative costs associated with this action. This analysis is presented in Section V of this preamble.
This action does not impose any new information collection burden under the PRA. OMB has previously approved the information collection activities contained in the existing regulations and has assigned OMB control numbers 2060-0637 and 2060-0640. The proposed standards will not impose new or different reporting requirements on regulated parties than already exist for the RFS program.
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. In making this determination, the impact of concern is any significant adverse economic impact on small entities. An agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, has no net burden, or otherwise has a positive economic effect on the small entities subject to the rule.
The small entities directly regulated by the RFS program are small refiners, which are defined at 13 CFR 121.201. We have evaluated the impacts of this proposed rule on small entities from two perspectives: As if the 2019 standards were a standalone action or if they are a part of the overall impacts of the RFS program as a whole.
When evaluating the standards as if they were a standalone action separate and apart from the original rulemaking which established the RFS2 program, then the standards could be viewed as increasing the cellulosic biofuel volume by 93 million gallons and the advanced and total renewable fuel volumes required of obligated parties by 590 million gallons between 2018 and 2019. To evaluate the impacts of the volume requirements on small entities relative to 2018, EPA has conducted a screening analysis
While the screening analysis described above supports a certification that this rule would not have a significant economic impact on small refiners, we continue to believe that it is more appropriate to consider the standards as a part of ongoing implementation of the overall RFS program. When considered this way, the impacts of the RFS program as a whole on small entities were addressed in the RFS2 final rule (75 FR 14670, March 26, 2010), which was the rule that implemented the entire program as required by EISA 2007. As such, the Small Business Regulatory Enforcement Fairness Act (SBREFA) panel process that took place prior to the 2010 rule was also for the entire RFS program and looked at impacts on small refiners through 2022.
For the SBREFA process for the RFS2 final rule, EPA conducted outreach, fact-finding, and analysis of the potential impacts of the program on small refiners, which are all described in the Final Regulatory Flexibility Analysis, located in the rulemaking docket (EPA-HQ-OAR-2005-0161). This analysis looked at impacts to all refiners, including small refiners, through the year 2022 and found that the program would not have a significant economic impact on a substantial number of small entities, and that this impact was expected to decrease over time, even as the standards increased. For gasoline and/or diesel small refiners subject to the standards, the analysis included a cost-to-sales ratio test, a ratio of the estimated annualized compliance costs to the value of sales per company. From this test, it was estimated that all directly regulated small entities would have compliance costs that are less than one percent of their sales over the life of the program (75 FR 14862, March 26, 2010).
We have determined that this proposed rule would not impose any additional requirements on small entities beyond those already analyzed, since the impacts of this rule are not
While the rule will not have a significant economic impact on a substantial number of small entities, there are compliance flexibilities in the program that can help to reduce impacts on small entities. These flexibilities include being able to comply through RIN trading rather than renewable fuel blending, 20 percent RIN rollover allowance (up to 20 percent of an obligated party's RVO can be met using previous-year RINs), and deficit carry-forward (the ability to carry over a deficit from a given year into the following year, providing that the deficit is satisfied together with the next year's RVO). In the RFS2 final rule, we discussed other potential small entity flexibilities that had been suggested by the SBREFA panel or through comments, but we did not adopt them, in part because we had serious concerns regarding our authority to do so.
Additionally, we realize that there may be cases in which a small entity may be in a difficult financial situation and the level of assistance afforded by the program flexibilities is insufficient. For such circumstances, the program provides hardship relief provisions for small entities (small refiners), as well as for small refineries.
EPA evaluates these petitions on a case-by-case basis and may approve such petitions if it finds that a disproportionate economic hardship exists. In evaluating such petitions, EPA consults with the U.S. Department of Energy, and takes the findings of DOE's 2011 Small Refinery Study and other economic factors into consideration. EPA successfully implemented these provisions by evaluating petitions for exemption from 20 small refineries for the 2016 RFS standards (3 of which were owned by a small refiner) and 29 small refineries for the 2017 RFS standards (8 of which were owned by a small refiner).
Given that this proposed rule would not impose additional requirements on small entities, would decrease burden via a reduction in required volumes as compared to statutory volume targets, would not change the compliance flexibilities currently offered to small entities under the RFS program (including the small refinery hardship provisions we continue to implement), and available information shows that the impact on small entities from implementation of this rule would not be significant viewed either from the perspective of it being a standalone action or a part of the overall RFS program, we have therefore concluded that this action would have no net regulatory burden for directly regulated small entities.
This action does not contain an unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. This action implements mandates specifically and explicitly set forth in CAA section 211(o) and we believe that this action represents the least costly, most cost-effective approach to achieve the statutory requirements.
This action 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.
This action does not have tribal implications as specified in Executive Order 13175. This proposed rule will be implemented at the Federal level and affects transportation fuel refiners, blenders, marketers, distributors, importers, exporters, and renewable fuel producers and importers. Tribal governments would be affected only to the extent they produce, purchase, and use regulated fuels. Thus, Executive Order 13175 does not apply to this action.
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it implements specific standards established by Congress in statutes (CAA section 211(o)) and does not concern an environmental health risk or safety risk.
This action is not a “significant energy action” because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This action proposes the required renewable fuel content of the transportation fuel supply for 2019, consistent with the CAA and waiver authorities provided therein. The RFS program and this rule are designed to
This rulemaking does not involve technical standards.
The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, low income populations, and/or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994). This proposed rule does not affect the level of protection provided to human health or the environment by applicable air quality standards. This action does not relax the control measures on sources regulated by the RFS regulations and therefore will not cause emissions increases from these sources.
Statutory authority for this action comes from section 211 of the Clean Air Act, 42 U.S.C. 7545. Additional support for the procedural and compliance related aspects of this proposed rule comes from sections 114, 208, and 301(a) of the Clean Air Act, 42 U.S.C. 7414, 7542, and 7601(a).
Environmental protection, Administrative practice and procedure, Air pollution control, Diesel fuel, Fuel additives, Gasoline, Imports, Oil imports, Petroleum, Renewable fuel.
For the reasons set forth in the preamble, EPA proposes to amend 40 CFR part 80 as follows:
42 U.S.C. 7414, 7521, 7542, 7545, and 7601(a).
(a) * * *
(10)
(i) The value of the cellulosic biofuel standard for 2019 shall be 0.209 percent.
(ii) The value of the biomass-based diesel standard for 2019 shall be 1.72 percent.
(iii) The value of the advanced biofuel standard for 2019 shall be 2.67 percent.
(iv) The value of the renewable fuel standard for 2019 shall be 10.88 percent.
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 |